UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ALABAMA
KENNETH TINNEY, JOE CROSSWELL, * NANCY CHAMPION, AND * CAROL CLEVELAND, * * AMENDED COMPLAINT Plaintiffs, * v. * Case No. CV-02-C-2062-M * ANNE VENNEMAN, in her official capacity as * Secretary of the United States Department of * Agriculture, RIVERSIDE COVES APARTMENTS, * a partnership, Charles A Martin, general partner, * Lawrence Olshan, general partner, David Bunkin, * general partner, Robert W. Grimes, general partner * and John Doe 1-100; and THE GUARDIAN * COMPANY, L.L.C., an Alabama limited liability * company * * Defendants. *
INTRODUCTION
1. Plaintiffs bring this action to challenge Defendants’ Riverside Coves Apartments,
Ltd., its partners - Charles A. Martin, Lawrence Olshan, David Bunkin, Robert W.
Grimes, and John Doe 1-100, and The Guardian Company, LLC (“OWNERS”)
efforts to circumvent the rental rate provisions, Section 515 of the Housing Act of
1949 (established by the Senior Citizen’s Housing Act of 1962, Pub. L. No. 87-723,
4(b), 76 Stat. 670). Plaintiffs Kenneth Tinney, Joe Crosswell, Nancy Champion and
Carol Cleveland (“TINNEY, et al.”) are all low-income individuals with disabilities
who reside in River Bend Apartments (“River Bend”) in Riverside, Alabama. In
1978 and 1979, Defendant OWNERS utilized two federally subsidized loan
1 programs to fund construction of River Bend, receiving over $2.4 million in low-
interest loans in exchange for assuring tenants affordable housing for 50 years.
2. Defendant VENNEMAN approved Defendant OWNERS original request to prepay
their mortgages on River Bend with restrictions which would maintain the property as
affordable housing. Defendant OWNERS appealed this decision. On appeal
Defendant OWNERS request to prepay without restrictions was approved. After a
remanded appeal hearing Defendant OWNERS were again granted the right to prepay
without restrictions and Defendant VENNEMAN approved this determination. If
Defendant GUARDIAN COMPANYOWNERS prepayss its mortgages this
affordable rent program with terminate in violation of Section 515 of the Housing Act
of 1949. Plaintiffs bring this action to enforce federal law and to assure affordable
housing to River Bend’s low-income tenants.
PARTIES
3. Plaintiff KENNETH TINNEY has resided in a two bedroom apartment at River Bend
since 1995. Plaintiff TINNEY is an individual with quadriplegia. Due to Defendant
VENNEMAN’s determination to allow Defendant OWNERS to prepay its mortgages
on River Bend and withdraw from the 515 program Plaintiff TINNEY’s Rental
Assistance will terminate when Defendant OWNERS prepay its mortgages and he
faces a rent increase from $42.00 to $412.00 per month, a 1005 % increase.
2 4. Plaintiff JOE CROSSWELL has resided in a one-bedroom apartment at River Bend
since 1982. Due to Defendant VENNEMAN’s determination to allow Defendant
OWNERS to prepay its mortgages on River Bend and withdraw from the 515
program Plaintiff CROSSWELL’s Rental Assistance will terminate when Defendant
OWNERS prepay its mortgages, and he faces a rent increase from $86.00 to $412.00
per month, a 479% increase.
5. Plaintiff NANCY CHAMPION has resided in a two bedroom apartment at River
Bend since February 2001. Due to Defendant VENNEMAN’s determination to allow
Defendant OWNERS to prepay its mortgages on River Bend and withdraw from the
515 program Plaintiff CHAMPION’s Rental Assistance will terminate when
Defendant OWNERS prepay its mortgages, and she faces a rent increase from
$184.00 to $412.00 per month, a 224% increase.
6. Plaintiff CAROL CLEVELAND has resided in a two bedroom apartment at River
Bend since 2001. Due to Defendant VENNEMAN’s determination to allow
Defendant OWNERS to prepay its mortgages on River Bend and withdraw from the
515 program Plaintiff CLEVELAND’s Rental Assistance will terminate when
Defendant OWNERS prepay its mortgages, and she faces a rent increase from
$127.00 to $412.00 per month, a 324% increase.
7. Defendant ANNE VENNEMAN is Secretary of the United States Department of
Agriculture (USDA) and is sued in her official capacity. Defendant VENNEMAN is
responsible for ensuring USDA's compliance with the laws of the United States,
including the Rural Housing Service (RHS) administration of the Section 515
program preservations statute.
3 8.
9.
10.
11. Defendant RIVERSIDE COVES APARTMENTS, Ltd., is a partnership in the State
of Alabama and the current owner of River Bend Apartments.
12. Defendant Charles A. Martin, is a partner in the general partnership in RIVERSIDE
COVES APARTMENTS, Ltd.
13. Defendant Lawrence Olshan is a partner in the general partnership in RIVERSIDE
COVES APARTMENTS, Ltd.
14. Defendant David Bunkin is a partner in the general partnership in RIVERSIDE
COVES APARTMENTS, Ltd.
15. Defendant Robert W. Grimes is a partner in the general partnership in RIVERSIDE
COVES APARTMENTS, Ltd.
16. Defendant John Doe 1-100 is a partner in the general partnership in RIVERSIDE
COVES APARTMENTS, Ltd.
17. Defendant THE GUARDIAN COMPANY, L.L.C., THE GUARDIAN
COMPANYOWNERS iis a limited liability company in the State of Alabama and the
current owner of River Bend.
FEDERAL JURISDICTON
18. This court has jurisdiction over plaintiffs' claims pursuant to 28 USC §§ 1331 and
1346. This action is authorized against the federal defendants by 5 USC § 702. To the
4 extent sovereign immunity is applicable to defendant USDA, it has been waived by
virtue of 5 USC § 702. Declaratory relief is authorized by 28 USC §§ 2201 and 2202.
VENUE
19. Venue is proper in the Northern District of Alabama pursuant to 28 USC 1391(b)(2),
because a substantial part of the events or omissions giving rise to the claim occurred,
and the property River Bend Apartments is the subject of the action is situated in
Riverside, Alabama.
STATUTORY FRAMEWORK
Section 515 of the Housing Act of 1949, 42 U.S.C. § 1485
20. Section 515 of the Housing Act of 1949, 42 U.S.C. § 1485, was established by a 1962
Act of Congress (Senior Citizens Housing Act of 1962, Pub.L. No. 87-723, 4(b), 76
Stat. 670 (1962)) which authorizes the Farmers Home Administration ("FmHA") to
make loans for the Rural Rental Housing Program.
21. The Rural Housing Service (RHS), formerly known as the Farmer's Home
Administration (FmHA), is a division of the Department of Agriculture (USDA), and
is presently responsible for the administration of the Section 515 Multifamily
Housing Program (Section 515). 42 USC § 1485.
22. RHS is obligated to administer programs such as the Section 515 program “consistent
with program goals and objectives, so that the involuntary displacement of families
and businesses is avoided.” 42 USC § 1471 (g).
5 23. Pursuant to the Section 515 program, RHS provides mortgage loans for terms up to
50 years to facilitate and encourage the development of rental housing for low and
moderate income households. 42 USC § 1485. Projects financed with a Section 515
loan "should expand the supply of decent, safe, and sanitary housing for very low-,
low- and moderate-income elderly persons, persons with disabilities, and families in a
nondiscriminatory way . . . [and] should promote a greater choice of housing
opportunities in the housing market area." 7 C.F.R. 1944.215(r).
24. Borrowers are responsible for "meeting the objectives for which the loan and/or grant
was made.” 7 C.F.R. 1930, Subpt. C, Exhibit B, III A2.
25. Owners of Section 515 projects are able to take advantage of other subsidies which
benefit their project. Two such programs are the Interest Credit Plan II Program and
the Rental Assistance Program. 42 USC § 1490(a)(1)B.
26. Under the Interest Credit Plan II Program, the private owners of the Section 515
projects receive subsidies that reduce the effective interest rate on their mortgages to
1%. 42 USC § 1490(a)(1)B. In return, the owner must maintain rents at levels no
higher than necessary to cover the cost of debt service, a limited return, and the
monthly operations of the project. 7 CFR 1944.215. Also, the owner must limit
occupancy to low and moderate income households. 7 CFR 1930, Subpt. C, ¶ IV (2)
(a).
27.
28. Although the rents produced by the Interest Credit Program typically run substantially
below market, these rents are often still too high to be affordable for the lowest
6 income households in rural communities. Therefore, many Section 515 developments
also receive project-based rent subsidies through the RHS Rental Assistance Program.
29. Under the Rental Assistance Program, low-income households are not to pay more
than 30% of their income in rent. Rental Assistance ceases upon prepayment of RHS
loans. Rental Assistance ceases when the mortgages are terminated.
Emergency Low Income Housing Preservation Act, 42 U.S.C. § 1472(c)
30.
31. Congress passed the Emergency Low Income Housing Preservation Act of 1987
("ELIHPA"), 42 U.S.C. § 1472(c), out of concern that a large portion of the housing
stock constructed under the Section 515 program was vulnerable to mortgage
prepayment and removal from the stock of low-income housing in rural areas, thus
thwarting the basic purpose of the program.
32. Subsequent to the enactment of ELIHPA, an owner of a project funded by a Section
515 loan who wishes to prepay its outstanding indebtedness must submit a request to
prepay a RHS loan. 7 CFR 1965.205.
33. Within 30 days of a submitted request, RHS must notify each tenant of the housing
development as well as interested nonprofit organizations and appropriate state and
local agencies that the owner has submitted a request to prepay the Section 515 loan.
42 U.S.C. § 1472(c)(3).
34. RHS must not grant a prepayment request until the requirements specified in ELIHPA
are met. 42 U.S.C. § 1472 (c)(1)(A). To that end, RHS must attempt to enter into an
7 agreement under which the owner of the project commits to extend the low-income
use of the project for 20 years from the date of the agreement. 42 U.S.C. § 1472(c)(4)
(A).
35. Before an owner may prepay the mortgage and exit the Section 515 program, RHS
must determine if the project is still needed as low income housing, and if
prepayment would materially affect housing opportunities for minorities. 7 CFR
1965.215. Depending on its findings, RHS must then advise the owner of the
restrictions it will place on the owner's prepayment of the mortgage. 7 CFR 1965.213.
36. If RHS determines low-income housing is still needed, but minority housing
opportunities will not be affected by prepayment, the owner may prepay but must
agree to use restrictions. 7 CFR 1965, Subpt. E, Exh. A-4. These restrictions require
the owner to protect all current tenants from displacement. 7 CFR 1965, Subpt. E,
Exh. A-4. This protection is accomplished by retaining the same rent limitations and
other tenants' rights that exist under the Section 515 program until the tenants choose
to leave their current residence. 7 CFR 1965.215(c)(1)(ii), RD AN No. 3633 (4-10-
01).
37. If RHS determines low-income housing is needed and minority-housing opportunities
will be affected by prepayment, more elaborate protections are required. 7 CFR
1965.215(c)(1)(i), RD AN No. 3633 (4-10-01). The owner has the option to either:
(1) continue to protect current and future tenants according to the law under the
Section 515 program; or (2) offer the project for sale to a non-profit or public agency,
which would protect current and future tenants according to the law under the Section
515 program. 7 CFR 1965.204.
8 38. In order to implement these restrictions, owners must agree to the filing of restrictive
use covenants against the property and the execution of a restrictive-use agreement.
See exhibits to Subpart E following § 1965.250. Rents, other charges, and conditions
of occupying will be set so that the effects will not differ from what they would have
been had the project remained in the Section 515 program. See Exhibit A-4 to Subpt.
E.
39. Other Section 515 program requirements are to remain in effect to protect tenants as
well, such as monetary limits set for security deposits, 7 CFR Pt. 1930, Subpt. C, Exh.
B, VIII., H, and the substantial noncompliance and good cause requirements
necessary for a termination and eviction. 7 CFR Pt. 1930, Subpt. C, Exh. B, XIV, A.
40.
41.
42.
43. With Congress’ intent to preserve and extend the use of Section 515 developments as
low-income housing as its guiding principle, RHS must offer financial incentives to
an owner requesting to pre-pay its Section 515 loan. 42 U.S.C. § 1472(c)(4)(B). If,
despite these incentives, the owner refuses to enter into an agreement to extend the
low-income use of the project, then the owner must offer to sell the project to a
9 qualified nonprofit organization or public agency at fair market value. 42 U.S.C. §
1472 (c)(5)(A).
44. During the pendency of the prepayment request, the owner must continue to operate
the Section 515 development as low-income rental housing and offer vacant units to
eligible households subject to a lease addendum notifying new tenants of the
pendency of the prepayment request. 7 C.F.R. § 1965.206(b)(5).
45. If no bona fide purchase offer is made and RHS accepts the prepayment, tenants have
the right to remain in their units and pay the higher rents, with or without federal,
state, or other subsidy, unless evicted for cause unrelated to payment. 7 C.F.R. §
1965.206(b)(2)(x).
STATEMENT OF THE FACTS
Defendant Owner's Attempt to Prepay the Mortgages and Defendant VENNEMAN’s Violation of Regulations in Approving Prepayment
Defendant Riverside Coves Apartments, Ltd. owns River Bend Apartments (“River Bend”), formerly named the Riverside Coves Apartments Phase I and II, a 144 unit apartment complex in
Riverside, Alabama.
46. Defendant Riverside Coves Apartments, Ltd. by and through its partners executed a
50 year loan agreement with Farmers Home Administration (FmHA) for $1,139,000
on August 23, 1978. This loan enabled Defendant OWNERS to build the 68-unit
apartment complex known as Riverside Coves Apartments Phase I.
47. Defendant Riverside Coves Apartments, Ltd. by and through its partners executed a
50-year loan agreement with FmHA for $1,333,000 on June 28, 1979. This loan
10 enabled Defendant OWNERS to build the 76-unit apartment complex known as
Riverside Coves Apartments Phase II.
48. Defendant OWNERS entered the RHS Interest Credit Plan II program with respect to
both FmHA mortgages on the River Bend Apartment Complex. As a consequence,
Defendant OWNERS received a subsidy that made its mortgages interest equal to an
effective rate of 1% despite the prevalence of market interest rates of approximately
10% at that time.
49. Defendant OWNERS agreed to maintain affordable rents for very-low, and low-
income individuals and families for the full 50-year term of the mortgages as a
condition of participation in this government subsidized program.
50. With more than 27 years left on Defendant OWNERS’ mortgage agreements with
RHS, Defendant OWNERS asked RHS for permission to prepay the Section 515
mortgages on River Bend and remove River Bend from the 515 program.
51. Plaintiffs learned about Defendant OWNERS’ intention to prepay its Section 515
loan on or about December 14, 2000, when they received a letter from the
management at River Bend.
52. Plaintiffs were informed by said letter that if Defendant VENNEMAN approved
prepayment by Defendant OWNERS they could still receive their rental assistance at
other subsidized housing.
53. On February 6, 2001, Defendant VENNEMAN notified Plaintiffs, River Bend
tenants, that Defendant OWNERS had requested permission to prepay its loans under
the Section 515 and circumvent its responsibilities under the program.
11 54. On March 19, 2001, Defendant VENNEMAN informed Defendant OWNERS their
request to prepay was approved conditioned on acceptance of a "Restrictive Use
Agreement." Defendant OWNERS refused to accept a "Restrictive Use Agreement."
55. As of April 2001, there were 73 tenants at River Bend receiving Rental Assistance
under the Section 515 program who faced displacement if RHS approved Defendant
OWNERS’ request to prepay without restrictions.
56. On July 20, 2001, Defendant VENNEMAN , denied Defendant OWNERS’
prepayment request because there was inadequate housing for low-income tenants
within “a reasonable commuting area.”
57. On October 31, 2001, Plaintiffs were notified by Defendant VENNEMAN that
Defendant OWNERS filed an appeal of the agency’s decision to allow prepayment
with restrictions. This letter further states that, “[t]hese appeal hearings are generally
only open to the two parties and their witnesses. This is not an open forum.”
58. The appeal hearing was held by the National Appeals Division (NAD) of the USDA
on December 3, 2001. The hearing officer was Mr. Pat Skaggs.
59. Defendant OWNERS asserted on December 3, 2001 in the NAD evidentiary hearing
that the market area for River Bend Apartments included regions that tenants had left-
some more than a decade earlier, regions that tenants mention in a survey they might
like to move to, and the entire circulation area of the Birmingham News and the
Anniston Star, in which River Bend advertised. Thus in Defendant OWNERS’ view,
the Riverside, Alabama market area included, inter alia, Birmingham, Sylacauga,
Prattville, Bessemer, and portions of Florida, and Georgia.
12 60. This expansive definition of market area does not comply with the definition 58 CFR
38913-01 and 7 CFR § 1965.202 ("The market area is the community in which the
project is located and those outlying rural areas which are impacted by the project
(excluding all other established communities)").
61. On December 7, 2001, the hearing officer released his opinion in this case. He
determined that Defendant OWNERS established by a preponderance of the evidence
that RHS erred in its decision to require Defendant OWNERS to prepay with
restrictions instead of prepaying without restrictions.
62. On December 7, 2001, Defendant VENNEMAN, by and through the NAD hearing
officer’s decision, eschewed the definition set out in the federal rules, and adopted the
expansive definition of market area asserted by Defendant OWNERS. This decision
allowed Defendant OWNERS to avoid the requirement that it must execute a
restrictive use agreement to protect current tenants. Defendant OWNERS were also
able to diminish the number of tenants in the project by relocating tenants to housing
far from Riverside, Alabama during the appeal process.
63. On January 4, 2002, Rural Development requested a Director's Review of NAD’s
December 7, 2001, decision.
64. On January 7, 2002, Ms. Nancy Smith, the Acting Director of USDA, vacated and
remanded the NAD decision due to the inadequate notification tenants received
regarding the hearing as well as their inability to attend or participate in the hearing
process. The remand stipulated that the hearing officer must allow tenant participation
in the appeal.
13 65. The original hearing officer was set to preside over the remanded appeal. In a letter
dated, January 25, 2002, from Hearing Officer Mr. Pat Skaggs to Assistant Director
of NAD Southern Region, Duane Sinclair, Mr. Skaggs asked “to be excused from re-
hearing the appeal because I do not feel that I can render an unbiased adjudication.”
66. By notation on January 30, 2002, Mr. Skaggs states, “[m]y request to recuse is not
approved, no provision to cover recusal on a remand decision. Instructed to schedule
a remand pre-hearing and remand hearing to comply with Director’s review
determination.”
67. During the pendency of the remanded appeal review, Plaintiff CHAMPION, along
with another River Bend tenants, attempted to inform other residents about the
situation in a letter dated February 7, 2002. This letter assured fellow tenants no final
determination had been made with regard to Defendant OWNERS’ request to prepay
its mortgages under Section 515.
68. On February 12, 2002, Defendant MARTIN, a partner in Defendant OWNERS, sent a
memo to all tenants stating that the letter from Plaintiff CHAMPION contained false
information. Although, Defendant OWNERS’ request to prepay was still under
review, Defendant MARTIN stated, “I would urge each and everyone that would like
to stay at River Bend Apartments to apply for a Section 8 Voucher.”
69. Further, Defendant OWNERS provided transportation for River Bend tenants to the
HUD office to apply for Section 8 vouchers.
70. The pre-hearing meeting for the remand hearing were the agenda for the hearing was
set was held without a tenant representative despite the fact that the purpose for the
rehearing was to allow for tenant participation.
14 71. On April 25, 2002, despite his own admitted bias, Mr. Skaggs held the remanded
appeals hearing of Defendant OWNERS' request for prepayment via teleconference.
72. On May 2, 2002, the hearing officer released his opinion in this case. He determined
that Defendant OWNERS established, by a preponderance of the evidence, that RHS
erred in its decision to require Defendant OWNERS to prepay with restrictions
instead of without restrictions.
73. On May 21, 2002, Mr. Arthur Garcia, Administrator for RHS, requested a Director's
Review of the NAD decision on May 2, 2002. In his request, Mr. Garcia identifies
several areas where the hearing officer’s determination is in conflict with the
agencies’ own regulations. He further states that, “the intent of the Agency
regulations is to protect the remaining tenants in the prepaying facility, not to help
them move.”
74. On June 6, 2002, the USDA Acting Director, Mr. Duane Sinclair, who previously
denied Hearing Officer Skaggs request for recusal, upheld the USDA National
Appeals' decision approving Defendant OWNERS prepayment of their Section 515
mortgages without restrictions.
75. The only action taken by Defendant VENNEMAN to protect the tenants of River
Bend since approving Defendant OWNERS’ request to prepay its loans with RHS
and remove River Bend from the 515 program, was the issuance of Letters of Priority
Entitlement (LOPE) for admission to other RHS projects.
76.
15 77.
78.
Defendant VENNEMAN’s Failure to Address Needs of Minority Groups
79. In neither the Remanded Appeal Determination, nor the Director's Review of the
Remanded Appeal Determination, was the impact upon minorities addressed by either
Defendant OWNERS or Defendant VENNEMAN. Only the tenant representative
addressed the issue of impact upon minority tenants in the Remanded Appeal
Determination.
80. In a letter dated May 21, 2002, Mr. Arthur Garcia, an Administrator for RHS
identifies that the Civil Rights Impact Analysis (CRIA) produced by RHS indicated
that the area housing market around River Bend is a “very tight market with very few
vacant units.”
81. Mr. Garcia further states that, “by removing the subject property from the stock of
affordable rental housing, minorities would clearly be affected by a loss of housing
opportunity in a tight market.”
82. Had Defendant VENNEMAN complied with the law, she would also have had to
make a determination about whether the Defendant OWNERS’ prepayment in this
instance would have had a material effect on minority housing opportunities. If
Defendant VENNEMAN had made the determination that minority housing
16 opportunities would be affected by prepayment, Defendant OWNERS would be
required to offer the project for sale to a nonprofit or public agency interested in
retaining the project as affordable housing for the long term.
83.
84. Defendant VENNEMAN failed to make statutory findings with respect to minority
housing opportunities, and failed to consider the implications of her actions or
inactions in addressing this prepayment with respect to impact upon minorities in the
market area of River Bend.
85.
CAUSES OF ACTION
FIRST CAUSE OF ACTION – VIOLATION OF APA
86. Plaintiffs reallege and incorporate by reference the allegations in Paragraphs 1
through 73, inclusive, of this complaint.
87. Defendant VENNEMAN violated the Section 515 prepayment preservation statute,
42 USC 1472(c), by permitting owners, Defendant OWNERS to prepay the Section
515 mortgage and not requiring maintenance of the restrictive covenants protecting
the tenants, entitling Plaintiffs to relief under the Administrative Procedures Act, 5
USC § 706.
17 SECOND CAUSE OF ACTION- VIOLATION OF APA
88. Plaintiffs reallege and incorporate by reference the allegations in Paragraphs 1
through 73, inclusive, of this complaint
89. Defendant VENNEMAN, violated her statutory obligation to administer the Section
515 program to avoid displacement of families, pursuant to 42 USC §1471(g), by
permitting Defendant OWNERS to prepay its Section 515 mortgages without
requiring the maintenance of the restrictive covenants protecting the tenants, entitling
Plaintiffs to relief under the Administrative Procedures Act, 5 USC § 706.
90.
THIRD CAUSE OF ACTION- VIOLATION OF THE APA
91. Plaintiffs reallege and incorporate by reference the allegations in Paragraphs 1
through 73, inclusive, of this Complaint.
92.
18 93. Defendant VENNEMAN, violated her duty to administer the Section 515 program to
affirmatively further fair housing pursuant to 42 USC § 3608(d), by not considering
the effect of its actions or inactions on minorities in the town of Riverside, Alabama
and its market area, when it permitted Defendant OWNERS to prepay its mortgages
and circumvent the Section 515 program. Such a violation entitles Plaintiffs to relief
under the Administrative Procedures Act, 5 USC § 706.
94.
FOURTH CAUSE OF ACTION- VIOLATION OF DUE PROCESS
95.
96. Plaintiffs reallege and incorporate by reference the allegations in Paragraphs 1
through 73, inclusive, of this Complaint.
97. Defendant VENNEMAN violated Plaintiffs’ Due Process rights under the 5th and 14th
Amendments to the United States Constitution and the Preservation Act regulation
by not adhering to its own administrative policies, located in 58 CFR 38913-01 and 7
CFR 1965.202.
FIFTH CAUSE OF ACTION- VIOLATION OF ELIPHA
98. Plaintiffs reallege and incorporate by reference the allegations in Paragraphs 1
through 73, inclusive, of this Complaintstate ¶¶ 1-61.
99.
19 100. Defendant OWNERS violated Plaintiffs’ rights under the Emergency Low Income
Housing Preservation Act, 42 USC § 1472(c), and its implementing regulations, by
not offering to sell River Bend Apartments to qualified nonprofit organizations and
public agencies which would maintain the complex as low-income housing.
SIXTH CAUSE OF ACTION- VIOLATION OF ELIPHA
101. Plaintiffs reallege and incorporate by reference the allegations in Paragraphs 1
through 73, inclusive of this Complaint.
102. Defendant OWNERS violated Plaintiffs’ rights under the Emergency Low Income
Housing Preservation Act, 42 USC § 1472(c), and it implementing regulation by not
executing restrictive use agreements to protect current tenants.
SEVENTH CAUSE OF ACTION- VIOLATION OF SECTION 515
103. Plaintiffs reallege and incorporate by reference the allegations in Paragraphs 1
through 73, inclusive of this Complaint.
104. Defendant OWNERS violated its duties under Section 515 of the Housing Act of
1949 and its implementing regulations by relocating tenants and not renting vacant
units as Section 515 units prior to prepaying its mortgages on River Bend.
105.
106.
107.
108.
20 RELIEF
109. Therefore, plaintiffs seek the following relief:
A. A declaratory judgment, issued pursuant to 28 USC § 2201, that :
1. By permitting Defendant OWNERS to prepay the section 515 mortgages without the
imposition of restrictive covenants protecting the tenants, Defendants VENNEMAN
and RHS have violated the Section 515 prepayment preservation statute, 42 USC
§1472(c), entitling plaintiffs to relief under the Administrative Procedures Act (APA),
5 USC § 706;
2.
3. By choosing to permit Defendant OWNERS to prepay the section 515 mortgages
without the imposition of restrictive covenants protecting the tenants, Defendant
VENNEMAN has violated her statutory obligation to administer the section 515
21 program so as to avoid displacement of families, pursuant to 42 USC § 1471(g),
entitling plaintiffs to relief under the APA, 5 USC § 706;
4.
5. By failing to consider the implications of its actions or inactions in permitting this
prepayment with respect to minorities in the market area of Riverside, Alabama,
Defendant VENNEMAN therefore violated her duty to administer her programs so as
to affirmatively further fair housing pursuant to 42 USC § 3608 (d), entitling
plaintiffs to relief under the APA, 5 USC § 706.
6.
7. By seeking to benefit from both a mortgage prepayment which did not comply with
federal law, and from the actions of federal defendants in permitting such
prepayment, defendant owners violated 42 USC § 1472 (c);
B. Preliminary and permanent injunctive relief:
1. Enjoining Defendant VENNEMAN from allowing prepayment of the mortgages on
River Bend Apartments, until the agency makes the proper findings and determines
what restrictions to impose as a result of those findings.
2. Enjoining Defendant OWNERS from inducing or encouraging any residents to move
out of River Bend Apartments;
C.
D.
22 E. Award costs, disbursements, and attorney’s fees pursuant to 28 USC § 2412;
F.
G. Such relief as the court may deem just and equitable, including any relief available
pursuant to 28 USC § 2201 and 2202.
110.
111.
a.
Respectfully submitted,
Dated: ______Signed: ______
LAURA E. McNALLY JAMES A. TUCKER Alabama Disabilities Advocacy Program 526 Martha Parham West Box 870395 Tuscaloosa, Alabama 35487 (205) 348-4928 telephone (205) 348-3909 facsimile
Attorneys for Plaintiffs
23