Montgomery County filed three lawsuits yesterday challenging what officials called the illegal sales of houses built under an innovative affordable housing program.
In the suits filed in Montgomery County Circuit Court, the county alleged that the former owners of housing built under the moderately priced housing program sold the houses at prices much higher than the program allows.
The lawsuits, the first time the county has gone to court to challenge the resale of the units, alleges fraud, breach of contract and unjust enrichment and seeks $345,297 in penalties and punitive damages.
Named in the suits were Somsak and Nijaporn Soodsamai of Silver Spring, Angela I. Hughes of Beltsville and Jose and Linda Rivera, now living in El Paso.
The program, started in 1974, is Montgomery's Moderately Priced Dwelling Units program, which requires developers of subdivisions and buildings of 50 or more units to make up to 15 percent of the units available to moderate-income buyers or renters. In return, developers are allowed to build up to 22 percent more housing on their sites.
A new town house sold to a family in the program sells for $65,000 to $75,000, compared with market rates of $115,000 to $125,000 for comparable units, according to county officials.
Under the program, buyers of the houses must agree to sell the units only to program participants at county-approved prices. The county alleged that in the each of the three cases, the former owners sold their houses for more than the law allows and in violation of the restrictions on their properties.
None of the former owners could be reached for comment.
"With affordable housing in such short supply in the county, we must make sure that the program continues to serve the population for which it was designed," Richard J. Ferrara, director of the county's department of Housing and Community Development, said in a statement. "The defendants attempted to illegally remove these units from the affordable housing market for their own personal gain, and the county will not stand for that."
The county alleged that Somsak and Nijaporn Soodsamai bought a unit in the Cloverly area of the county on Nov. 6, 1983, for $58,805 and in 1987 sold it for $85,000 to a buyer not certified by the county. Officials said the resale price was $11,950 more than legally permitted.
In the case against Hughes, the county alleged that a unit in White Oak, bought for $57,039 in 1984, was sold in 1988 to a non-participating buyer for $84,000, $17,000 more than permitted.
Officials said that in the third case, Jose and Linda Rivera told the county they intended to sell the unit and were told they could resell for $70,418 if they pay all of the buyers' closing costs. The county's suit alleges that the Riveras altered the county's letter to indicate that the buyer pay all the closing costs.
Staff writer Beth Kaiman contributed to this report.