Monday, June 12, 2017

Wisconsin AG Belts Nationwide 'Rent-To-Own' Racket Operator With Civil Suit Seeking Consumer Refunds, Penalties, Shutdown; Outfit Accused Of Using Business Model That "Purposely & Systematically" Targets Unsophisticated, Low-Income Homebuyers w/ Crappy Credit To Peddle Dilapidated Foreclosed Money Pits Under Terms & Conditions Designed To Fail

In Milwaukee, Wisconsin, the Milwaukee Journal Sentinel reports:
  • The state Department of Justice is asking that a South Carolina property company be banned from operating its controversial rent-to-own operation in Wisconsin and be ordered to refund money collected through the "illegal rental, leasing and sale" of its properties, according to a suit filed Monday [June 5].

    The target of the action filed in Milwaukee County Circuit Court is Vision Property Management LLC, which has been the subject of lawsuits, criticism by politicians — including U.S. Rep. Elijah Cummings — and media reports examining its practices. Founded in 2004, the company owns about 5,700 properties in 40 states, according to a December letter to DOJ from attorneys representing Vision Property.

    "Companies in Wisconsin whose business model relies on deceiving consumers have no place in our state,” Attorney General Brad Schimel said in a statement issued after the suit was filed.

    A Vision Property statement said the firm will "vigorously" contest the suit and that the claims of "harm' will surprise the many new Vision homeowners."

    The company has purchased about 200 properties throughout Wisconsin, the lawsuit states. At issue is Vision's practice of offering consumers rent-to-own deals on homes, without disclosing the decrepit conditions of some of the properties or telling the renters that they are responsible for making the repairs and paying back taxes and other bills, the state charged in the suit.

    If the tenant fails to do any of these things during the time allowed, Vision Property "evicts the tenant and repeats the cycle by renting the uninhabitable property to yet another Wisconsin consumer," according to the Department of Justice statement.

    The suit charges Vision Property, its affiliates and Alex Szkaradek — the company's chief executive officer and a key owner — of violating Wisconsin rental and other laws through a "false, misleading and (a) deceptive business scheme to induce Wisconsin consumers to lease, rent or purchase uninhabitable properties."

    The suit alleged that Vision's "scheme includes the leasing, renting and selling of properties with mold, sewage in the basement, without electricity and running water, to name but a few examples. Defendants purposely and systematically target low-income consumers and consumers with compromised credit, who lack the means to secure housing from more conventional routes."

    Some of the company's business practices were highlighted in Journal Sentinel stories about how a firm linked to Vision attempted to evict a man from a property it did not own. The Vision affiliate ultimately backed off and paid the legal fees of the man it tried to evict.

    The man, Jesse White, had been paying rent, maintaining and fixing up the house since March 2015. That's when he entered into an agreement to pay $570 a month rent, with about $41 of that going toward the $40,000 purchase price for the house, which had been bought by the property owner at a sheriff's sale for about $8,000.

    White told Milwaukee aldermen this year that he spent about $20,000 of his own money repairing the house on N. 26th St.

    Just last month Fannie Mae, the government-controlled mortgage finance agency, stopped selling properties to Vision, The New York Times reported.

    A spokeswoman for the Department of Justice did not provide an estimate of how much money the state is seeking be refunded to customers of Vision Property affiliates. The suit also is asking that the company be fined between $50 and $10,000 for each violation of state law.

    [...]
For more, see State DOJ asking court to shut down Vision Property's controversial rent-to-own operation.

For the lawsuit, see State of Wisconsin v. Vision Property Management LLC, et al.

For links to other relevant court documents, go here or go here.   land contract for deed

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