Members of a D.C. tenants association won a major victory last week in their battle to rehabilitate four buildings and form a cooperative when a D.C. Superior Court judge ruled that they were the legal owners of the buildings.
Judge John D. Fauntleroy ruled that the members of the 1901-07 15th Street NW Tenants Association did not default on their contract to purchase the apartments last March. Under the ruling, the tenants now are free to use a $450,000 loan from the Department of Housing and Community Development to pay for rehabilitation work.
The work must be completed before the association can form a cooperative and get permanent financing from the Department of Housing and Urban Development.
The association had a contract with the original owners to buy the 50-apartment complex of four brick buildings at the corner of 15th and T streets NW for $550,000. The association was to buy the buildings with the help of MUSCLE -- Ministries United to Support Community Life Endeavors -- and the settlement date was March 24.
The association and MUSCLE negotiated a loan with D.C. National Bank about a week before the deadline. The money was disbursed from escrow on April 11.
On that day Thomas Borger, a realty agent who had contracted to buy the apartments if the association failed to make the purchase by March 24 -- the original settlement deadline -- filed suit against the tenants and the previous owners to block the sale. Borger charged that the tenants' contract with the original owners should have been declared in default because the settlement money was not disbursed until after the deadline had passed.
At the trial, which was attended by about 50 tenants and their supporters, Judge Fauntleroy ruled against Borger, finding that the tenants had not defaulted on their contract with the original owners even though they purchased the property after the original deadline, because Hammond and Crespi had agreed to give them the extra time they needed to close the deal.
Borger said he does not plan to appeal the court decision. "The tenants and their counsel (University Legal Services) put up a good fight," he added.
After the trial, Burnette Johnson, president of the tenants association, said, "We are truly overjoyed that we've finally defeated Borger's nuisance suit," but, she added, the new owners' struggle has not ended. Because recent bids for rehabilitation work on the association's property have increased considerably over the bids that contractors made last March, the association now needs additional money from the DHCD if it is to comply fully with the HUD regulations.
Bill Hobbs, coordinator of the DHCD Home Purchase Assistance Program, said, "The tenants need about $300,000 to add to the $450,000 we've already committed to them. We have now got to reevaluate the situation." It is uncertain how long it will take to determine the association's financial need, but Hobbs said no money will be disbursed for rehabilitation work until that assessment is completed.