James R. Haynes, a former chairman of the city-funded agency that finances housing and commercial development, has been ordered to refund more than $200,000 to tenants of a Southeast Washington apartment complex and reduce their rents because he illegally raised the payments twice in the last two years.
In one of the largest awards ever made to a tenant's association, the city's Rental Accommodations Office ordered Haynes, a real estate lawyer, to pay triple damages to residents at the 132-unit Finsbury Square Apartments, at 1508-60 Butler St. SE. The city rent control agency said he violated the District's rent control law by increasing rents before registering the apartment buildings with the city.
The order will take effect after the tenants' lawyer, Christopher Young, negotiates with Haynes a plan for distributing the refunds among the current and former tenants. The plan is due by Oct. 24, by Haynes has appealed the refund and rent rollback order to the city's Rental Accommodations Commission.
Under the Sept. 24 ruling, Haynes was also ordered to pay each tenant $20 because the development's laundry facilities were closed for nearly a year and an additional $20 because air conditioners were not repaired.
Haynes refused to comment on the award or the deteriorating conditions at Finsbury, where tenants working as nurses, Metrobus drivers, secretaries, janitors and cooks live in one- to three-bedroom garden apartments and pay rents ranging from $194 to $293 a month. It was not immediately known how many tenants are entitled to the refunds. But most of the tenants paid $14 a month too much for one year and $34 extra for another year.
Varnie Archer, the tenants' association president at Finsbury Square, said she is gleeful about the residents' victory.
"I'm very happy that we won, that we stood up and decided to fight," she said, seated in front of her living room picture window that looks out onto the once-attractive complex that now is marred by missing windows, little grass, a pockmarked parking lot and multilated mailboxes.
"All the evidence showed he had overcharged us," she said.
Exactly three weeks before the rental office ordered the refund, Haynes resigned from the chairmanship and board of the D.C. Delvelopment Corp., the quasipublic agency that helps finance private housing and business ventures throughtout the city.
Haynes was appointed to the 15-member board in September 1979 by Mayor Marion Barry, who then supported his election as chairman. Haynes, who is gruff and feisty, had sharp differences with other board members and some of the top staff after he ordered all public inquiries about D.C. Development Corp. be referred to him. Three board members resigned as did longtime president Joseph D. Jackson.
After Haynes' Sept. 3 resignation, attorney Frederick B. Abramson, one of those who resigned, returned to the presidency.
Finsbury Square tenants discovered the overcharging accidentally when Haynes angered a longtime tenant, Mildred Merrill.
Last February, Haynes filed suit against Merrill for nonpayment of rent. He refused to acknowledge her payment after she traveled from Southeast Washington to his downtown office to show him her receipt, she said.
"I was furious," said Merrill, recalling the incident. "He said there was nothing he could do and he was so arrogant and very rude." She and her cousin, Archer, who had accompanied her, immediately went to the Rental Accommodations Office.
There, a staff member pulled the registration form for the apartments. As the women complained about their 9 percent rent increases on both May 1, 1978, and June 1, 1979, and reductions in services, the city rental accommodations worker noted that Haynes had failed to register the apartments until March 20, 1979, Archer said. Haynes had purchased the six three-story, sandy-colored brick buildings in January 1978 and was required by city law to register them immediately.
At the hearing on the tenants' request for a refund and rollback, Haynes admitted that he had registered late. According to records filed in the case, the rental office first offically ordered him to register on Nov. 22, 1978.
He argued at the hearing on the tenant's refund request that since he had applied for a certificate of occupancy before imposing the rent increase, the rent increases were legal "notwithstanding a technical violation of the law."
He also argued that most of the complaints of nonfunctioning air conditioners existed before he became the owner.
The repayment order comes when Haynes is in serious financial difficulty with Finsbury Square, which he bought for $1.3 million.
According to records he filed with the rental office and at D.C. Superior Court, he owes his mortgage company $5,761 in overdue loan payments, the Washington Gas Light Co. $14,489 and the District government more than $70,000 in unpaid water bills.
He has offered to sell the apartments to the tenants for $2.3 million.
The rental office also rejected Haynes' last bid last August for a 21 percent rent increase at Finsbury Square when he claimed that he was not making the 8 percent profit allowed by city law.
Although Haynes claimed a profit of only 2 percent, the rental office ruled it was closer to 22 percent after disallowing more than $88,000 in unjustified expenses. Haynes has appealed the ruling to the Rental Accommodations Commission.
With Haynes' financial difficulties, Archer said she hopes the tenants can buy the apartments for less than the $2.3-million asking price.
"We want to become homeowners," she said simply. "Rents are so high for people making small amounts of money there is no place for us to go."