Tenants who formed an association to scrutinize the condominium conversion of their high-rise and town house complex in Bethesda have filed a complaint with Montgomery County Landlord Tenant Commission, charging that the new owners are retaliating against them with rent increases to force them to leave.
Last April, after several legal actions by the tenants organization, county attorneys instructed the converters -- Gary and Scott Nordheimer and Myer Feldman, partners of Whitehall Associates, which had a contract to buy the Whitehall complex -- to tell prospective buyers about fire- and building-code infractions that had not been disclosed in the original property condition reports released in January 1981. After that notice, many previously interested parties, who would have had to pay for their own building repairs, backed out.
When Whitehall Associates formally assumed ownership of the 300-unit complex two months later, the Nordheimer brothers and Feldman "instituted an insidious scheme to cause [current] tenants to terminate their tenant status," Donald M. Weinroth, the tenant association president, stated in a March 3 complaint. "They did this by deliberately changing their rental practices so that existing tenants would pay more rent for remaining in their units than a new tenant would pay to move into those units."
The new owners also turned down requests from current tenants for term leases, keeping them instead on a month-to-month basis, Weinroth said, "while offering and granting one- and two-year leases to new prospective tenants. The practical effect was to intimidate and harass the existing tenants by keeping them continuously subject to eviction."
Bruce W. Warren, project manager for Whitehall Associates, said rents and lease terms were never intended to discriminate against members of the tenant association, and the tenants "have no basis for their complaints."
"We've put millions of dollars into the buildings and the rents have been very low. So we raised them to market level," Warren said. "We didn't do it to retaliate against anybody."
The charges follwed a survey by the tenants association of rent increases and leasing practice at Whitehall, according to the complaint.
As an example, the association cited an earlier complaint, filed last October, by one of its members, Sophie Fabis, an 18-year tenant of Whitehall who said her rent was raised to $655 from $489, or 34 percent, effective in December last year.
In the group complaint, Weinroth stated that new tenants of unrenovated apartments similar to Fabis' were charged less that $600 and given two-year leases, while she was refused anything other than a month-by-month contract. They also were given free garage space, he stated, while Fabis must pay $30 monthly. Others were offered freshly renovated apartments at the same price Fabis was charged.
The complaint also said Feldman and the Nordheimers were charging elderly tenants increased rents during a two-year freeze period that ended this month.
Warrent said he would limit his comments while the case was before county officials, and responded by making available documents he gave county officials in November in response to Fabis' case. He said he has filed no further response to the new complaint, and doesn't plan to. He said the commission had not asked for one and that he felt the earlier response was adequate.
In the documents, Warren said that rent increases of up to 60 percent would be imposed, beginning this month, for elderly and handicapped residents. But, he said, "It has never been our intent to harm the tenants living at Whitehall. ... Under the current laws protecting the elderly and handicapped, the developer has absorbed the large operating cost to allow an abnormally high percentage of [such] individuals...living at Whitehall at below market rates and a frozen rent for two years."
He told officials that the owners were "economically forced" to raise rents.
He also said that "for over a year, we have been renting apartments to new tenants at rates equal to or above what we are requiring current tenants to pay."
In an interview, Warren added that after Whitehall Associates took full ownership, it faced a high vacancy rate and offered such enticements as free garage space and one- and two-year leases to attract new tenants. He said that program was successful, so that later in the year, as older leases expired those tenants were put on month-to-month leases so that the units would be available for sale.
"If you give everybody a two-year lease, then how are you going to sell any units?" he said.
He also said that many established tenants were occupying "prime," easy-to-sell units, and that he had offered to give them two-year leases if they would move to other apartments that the company did not plan to sell immediately.
The March 3 complaint, filed on behalf of all tenants living at The Whitehall, asks landlord-tenant offials to interview tenants, compare rent prices and leases, inspect apartments and to order Whitehall Associates to offer three-year leases to those tenants now on month-to-month leases.
It also asks that rents be adjusted according to whether apartments have been renovated. Further, the complaint asks that, in instances where tenants were forced to pay increased rent when the new owners took over last year, those rental rates be reduced and the differences refunded. Weinroth also asked that the owners be ordered to pay the tenants association's legal fees.
Weinroth himself received an eviction notice when Whitehall Associates became landlords last June. The landlord-tenant commision ruled that eviction was illegal and retaliatory, and later ordered it to be rescinded, according to Nikki McCausland, the county division chief for landlord-tenant relations. Weinroth remained in his town house at 5009 Battery Lane, headquarters of the Whitehall Tenant Association.
Residents who were living at Whitehall Apartments before it began selling condominium units and who joined in the tenants' organization during the conversion, according to the complaint, were issued rent increases beginning last October and November that made their unrenovated apartments more expensive than refurbished apartments rented to new tenants this year.
In an interview, Weinroth said the rent increases to long-running tenants were 40 percent and 50 percent higher than what they had been paying.
Warren said that under Montgomery County law, only the length of the leases, and not the rent price, was regulated, yet his company still did not raise the rent for nearly two years. "That alone speaks well for us," he said.
He acknowledged, though, that until last June, his company was in charge of condominium sales only, and didn't handle rentals there. One month after Whitehall Associates officially took ownership of the buildings, it began issuing rent increases, according to records filed in the case.
Of the 300 tenants at Whitehall before the condominium conversion, 20 have bought condominiums, 90 stayed on as tenants and the rest have left, according to Weinroth.
Warren said Whitehall Associates paid to relocate 80 displaced tenants to new apartments -- before Montgomery laws required condominium converters to do that.
One long-time tenant, Benjamin Dean, who bought his unit and is now on the condominium board of directors, said he supported the tenants assocation, of which he was a member. He said he thought its actions were "proper and legitimate." Although he disagreed with some of their policies before he purchased, Dean said he has found Whitehall Associates has been responsive in subsequent dealings as a condominium owner.
"I'm very satisfied. I didn't have any complaints before, and I don't have any now." said Mary Ellen Enyart, a unit owner. She said she thought Weinroth "stopped all conversation by asking for too much" from the owners. "He was just too negative about it. It's a good location, near a subway stop. He just couldn't say anything good about it."
She said she hasn't been following tenant issues since she bought her place last June.
"I feel sorry for those older people, but not it seems to me the rents are more in line with what other places are charging, given the property...."
"We just want to sell real estate," Warren said. "We aren't out to hurt anybody. But they keep trying to hurt us and tell everybody that the owners are crooks and the buildings are falling apart. It's turned into a personal thing."
Weinroth said he thinks the management company has taken it personally.
"They felt that we had delayed the project," Weinroth said. "We disclosed that they had not revealed to the buying public the existence of the fire-code violations. As a result, a number of people canceled their contracts to buy. As it was, they laid their problems at our door. Apparently, we were the ones who got in front of the bullet."
Weinroth said the tenants association, which was formed in January 1981 shortly after tenants received notice that the building would go condo, was not set up to combat the conversion itself.
"Most members were unopposed, some for it, and some against it, but all wanted it to be a protected buy," Weinroth said. "We were fighting the converter's proposal...as being contrary to law. We were fighting very strenuously on these points -- but not the conversion."
Warren said he considered the tenants to be working against themselves.
"The major thrust here is they don't want to move. And I can understand that," he said. "But they are really hurting themselves."
"For us to bring the rents up to the market level, that's the best thing that can happen to the renter," Warren said. That way, he said, "we'll be able attract investors who would be willing to keep a renter."
He said if current rents were too low, few people would be inclined to buy and rent out a condominium.
Landlord-tenant officials said they could not discuss the case until it was decided, and declined to estimate how long it would take.