The Indiana Attorney General’s office has sued a New York real estate financier for the condition of a Merrillville apartment complex in which two buildings were closed for extreme disrepair, it announced Friday.
The office filed a suit against New York real estate financier ROCO Chetrit Entities LLC for “allegedly allowing Hickory Ridge Apartments in Merrillville to fall into such disrepair that elderly and vulnerable tenants were unlawfully forced out of their homes,” the release said. The Merrillville Fire and Rescue Department evacuated 12 families out of the two worst buildings — one of which had a bowing outside brick wall — in June 2023.
The lawsuit alleges “that companies related to the real estate financiers of the Chetrit Group defaulted on a nearly half-billion-dollar loan backed by Freddie Mac that financed a multitude of multifamily properties across the country, including several properties in Indiana containing nearly 1,500 units.” According to the release, ROCO Chetrit Entities “failed to properly fund necessary maintenance and repairs from 2019 to 2023 at Hickory Ridge Apartments, resulting in multiple incidents of flooding, sewage backups into occupied units, and unsafe and illegal fire code violations.”
A sign posted by the Merrillville Building Department warning against occupancy of a building in the Hickory Ridge apartment complex in the 5600 block of Hayes Street, is pictured on Thursday, June 15, 2023. (Michelle L. Quinn/Post-Tribune)
“It has long been a bedrock of Indiana law that landlords at the very least owe their tenants the most basic standards of habitability, including maintaining major systems and ensuring that the properties that they lease are fit for human habitation,” Attorney General Todd Rokita said in the release. “Our state welcomes investments from anyone who cares enough to meet these basic obligations, but we will not tolerate those who grind their heels on the poor and play a game of Monopoly with the lives of hard-working Hoosiers.”
The lawsuit demands a jury trial, costs of prosecution and other damages against the defendants for multiple violations of the Deceptive Consumer Sales Act and Home Loan Practices Act, the release said. Consumers can file a complaint by visiting indianaconsumer.com or calling 1-800-382-5516.
Hickory Ridge management’s “lack of cooperation” directly contributed to the closing of and displacement of 12 families from two of its buildings, according to the town of Merrillville, the Post-Tribune reported last year.
The town’s fire marshal, Robert Pillman, inspects the town’s apartments, hotels and motels yearly, and those inspections, per the Indiana Fire Code, are limited to common areas and include “additional structural concerns, appearance of mold in occupied and unoccupied units, electrical hazards, inaccessible fire extinguishers, missing or inoperable smoke detectors, inoperable fire alarms, and a large accumulation of trash in buildings. Pillman did inspect Hickory Ridge in March 2023, and his report explicitly laid out the numerous violations the complex racked up and how dangerous it is for those living there.
Egress doors, for example, were broken and “would allow fresh oxygen into the building if a fire were to occur, which would increase the intensity and spread of the fire, this includes exterior windows that are broken and covered by cardboard,” Pillman said in the report.
Discarded cigarette butts were found in maintenance areas despite posted “No Smoking” signs, and rags and other trash were found near the boilers and water heaters.
Pillman also found multiple holes in various walls, which would also hasten fire spreading through the building.
Further, a majority of the buildings’ exit signs and emergency lights are “broken or inoperable,” to which Pillman recommended “replacing the current exit signs with an exit sign/emergency light combination unit to limit future maintenance” and putting security devices on them to protect them from “careless tenants.”
Pillman then outlined the repairs the maintenance staff were required to make by the end of March 2023 and warned of the consequences if they didn’t.
“Many of the requirements by 3/31/2023 should not be difficult to achieve. You may have to have your alarm company respond for an emergency visit and repairs but everything else is something your staff should be able to complete,” Pillman said. “With the concerns in your buildings, it is not a question of IF a fire happens, it is WHEN a fire happens.”
On-site property management, however, didn’t cooperate with Pillman and wouldn’t allow him to inspect vacant units, thus Pillman couldn’t list mold in his March report. The town later sent a report to Hickory Ridge’s operator, Southfield, Michigan-based Friedman Management Company, requiring it to test the buildings for mold and air quality, the Post-Tribune reported.
The Fire Department had the authority to evacuate the residents from the buildings because they were unsafe, Merrillville Town Council President Rick Bella, D-5, said at the time.
Friedman pulled a permit for a restoration company to remove the brick on the buildings, one of which is buckling outward, Planning and Building Director Sheila Shine told the Merrillville Town Council in August. The building couldn’t be assessed in its current condition without removing the brick, she said, and the work would start “as soon as possible.”
Friedman was supposed to pay for the assessment, Shine said. While there are new owners interested in purchasing the complex who have made some improvements, the deal with them wasn’t finalized, at the time.
Michelle L. Quinn is a freelance reporter for the Post-Tribune.
