Berkeley homeowner facing major code repair debt gets new day in court
After eight years of what few would dispute has been a tense limbo for landlords, the case of a South Berkeley home in receivership since 2017 returns to court in a bid to end the legal system’s grip on the property.
In a series of Alameda County Court hearings scheduled over the next two months, a judge is expected to decide several unresolved issues regarding the court-ordered receivership of 1911 Harmon Street, Leonard’s longtime residence. Powell, 80 years old.
The new hearings will consider the scope and costs of the repair work and whether the project was mishandled by the receiver or the city, according to an interim ruling issued Wednesday by Judge Jeffery Brand, who has presided over the case since 2018.
Powell’s attorneys allege mishandling of the receivership, which cost Powell about $700,000: $500,000 for renovations and $200,000 for receivership and legal fees.
Also at issue is an unpaid bill of $290.00 from Gerard Keena, the house’s court-appointed receiver for administrative and legal costs.
“This receivership has had a huge impact on me and my family,” Powell said through his attorneys recently. “I am 80 years old. It is painful and exhausting to continue to endure this ordeal. . . I just hope for a fair and quick end to this receivership so my family and I can get on with our lives.
Powell, a U.S. postal veteran and retiree, has owned the two-story Victorian for 48 years, raising his six children there. Today, he lives in one of the two newly renovated units in the house and rents out the other.
The home went into court-ordered receivership in 2017, at the request of the city of Berkeley because the home had numerous health and safety code violations that Powell failed to correct, even after receiving a interest-free loan of $100,000. The city said it had worked with Powell to resolve issues for years, but deadlines had not been met and projects had not been completed.
Receivership is a mechanism that cities and counties can use to deal with non-building code properties that potentially risk the safety of residents or the community. It is often seen as drastic or a last choice for “problematic” properties with absentee or irresponsible landlords, or landlords who for some reason simply cannot find a way to fix their home.
A court-appointed real estate receiver is essentially given legal authority over all matters relating to the property to bring it into compliance with the building code. Receivers are required to notify the court of progress reports and accounting.
The receivership is legally terminated by the courts when the code issues are resolved – known as the receivership release. This usually happens when the landlord, the jurisdiction such as the city, and the receiver come to a court-approved agreement.
Keena ordered major repairs to 1911 Harmon St., including a new foundation, granite countertops and stainless steel kitchen appliances, and new plumbing and electrical work. The house was also to be converted into a duplex. Powell had converted the house at some point to a single-family home but without a permit.
Disagreements between Powell, the receiver and the city over the legality and fairness of the case have lingered, taking time to sort out, with much still up in the air.
How did an elderly person end up with hundreds of thousands of dollars in debt?
The roughly $700,000 price tag for the process, nearly a third of which is receivership administrative costs, has many following the situation wondering how one senior citizen ended up with hundreds thousands of dollars in debt trying to keep his beloved if she deteriorates. , old house.
Powell largely blames the city for its handling of his situation.
These are some of the issues Judge Jeffery Brand will attempt to address in upcoming hearings.
In 2019, Judge Brand partially discharged the receiver when Powell returned to his restored home. But Powell refused to sign Keena’s full release. In court documents, he said he had questions about the honesty and accuracy of the receiver’s actions.
Keena, meanwhile, said he would not charge for any of his personal time on the case if the receiver was released at the time – which did not happen. The $290,000 outstanding includes that, plus the last three years of receivership costs, mostly for legal fees.
A new team of lawyers questions aspects of Powell’s treatment
In 2020, a new team of attorneys took over representing Powell from the San Francisco law firm Gibson Dunn. This work is pro bono, said André Guiulfo, the team’s lead attorney.
The team filed briefs questioning many aspects of Powell’s treatment, including the legality of the city’s code enforcement process, the accounting of receivership expenses, the extent of work completed, and liability for the city to help pay for the receivership.
Judge Brand’s interim ruling covered most of these issues, which was emailed to all attorneys, basically saying, here’s my thought, here’s why, now you have the opportunity to convince the court otherwise if you don’t don’t agree.
While not final, Brand weighed in on a few key points, including saying that previous court orders stand and cannot be reconsidered, but the hearing can consider the extent of the receiver’s constriction and compensation by compared to current regulatory standards.
The judge also tentatively granted a motion filed by Berkeley that it cannot be held responsible for paying the escrow costs. But he also said that if the city or the receiver ordered or requested work beyond what was legally required, they could be held liable for a remedy.
Brand also suggested that the outstanding escrow bills of $290,000 be settled after the work draft is reviewed.
The first hearing in the case is Friday. Two additional hearings are scheduled for May 13 and 27.
Keena and her attorney, Nathaniel Marston, would not comment on the case.
The Berkeley City Attorney’s Office also said it does not comment on litigation cases.
Powell’s attorney said he believed the receivership system had failed in many ways for his client and his home could have come up to code for a lot less money.
The Leonard Powell case has stirred up strong emotions in Berkeley and beyond, as a longtime elderly African-American homeowner had to sell his home or incur hundreds of thousands in debt to cover an extensive renovation.
The receiver maintains that he followed a schedule of conditions presented by the city; a document that the city claims not to have issued, but which is nevertheless included with the city’s documents with “approved” initialed by a planner.
In the previous report from Berkeleyside. Powell did not argue that the house had fallen into disrepair. He said he was confused by the city code repair process and took steps to get the job done.
In addition to taking out a loan from Veterans Affairs for and receiving donations and help from his family, Powell secured a $100,000 interest-free loan from the city. Home improvement program for the elderly and disabled, who does not need to be repaid until he dies or the house is sold, whichever comes first.
But the Berkeley City Council has asked city staff to further examine what happened with Powell’s case, including how this kind of situation can be avoided in the future.
Cities must legally enforce building codes; a process that is generally complaint-driven. Someone complains about a building and the city inspects. But legal redress appears to be rare for the city.
Berkeleyside sent a public records request to the city on Feb. 2 requesting all records on the city’s use of receivership dating back 50 years, and has received none to date.
In 2020, council unanimously approved a series of recommendations for staff, including that the City Manager hold a briefing for council on how residential code enforcement issues are handled , timing and mechanisms for compliance, assistance programs for owners with code issues, and specific lessons learned from the Powell case. The council also asked for information on the number of complaints and breaches of the code, and how many have gone into receivership. He also asked the city manager to help plan a public meeting on the subject.
“This referral took place in February 2020, a month before the shutdown,” Matthai Chakko, the city’s public information officer, said this week. “This project has been put on hold to prioritize the pandemic response.”
Bay Area native Kate Rauch has been contributing to Berkeleyside for nearly 10 years and journalism for many more, with a few other great gigs along the way.