Davenport's 'problem' houses illustrate loophole

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By Ann McGlynn | Monday, August 18, 2008 1:21 PM CDT | () comments

Some say city should get serious on contract sales

QUAD-CITY TIMES

The pale green house sits boarded and empty in central Davenport, with dirt for a yard and a 10-year history of problems.

Rental inspectors informed the owner on Jan. 4, 2007, they were coming for a visit because of “several complaints about the property,” records show.

The next piece of paperwork in the city’s file of 818 W. 14th St.? A contract sale between Bessie Brown and Berthyl Holdings, with John Fahs as registered agent.

The contract — at $600 a month, 12 percent interest that shifted responsibility for the property’s upkeep, taxes and insurance from Fahs to Brown — meant inspectors would not be knocking on the door of Bessie Brown’s home to inspect. A contract sale, filed with the Scott County recorder, means no more regularly scheduled inspections. The properties move to complaint-only checks by city officials.

Twenty months later, early on Aug. 1, police came knocking instead. They were there to serve a search warrant. They found more than 20 people inside, 15 of them children, and conditions one detective described as some of the worst he’s seen. City inspectors came, too. They shuttered the house after discovering a problem that forced the disconnection of the electricity.

The $39,000 house, Fahs

said, will be returning to his ownership.

“We weren’t trying to avoid the city folks,” Fahs said, referring to the contract sale that stopped regular inspections. The house, he said, was up to code. “I wanted to give her a chance … it all blew up.”

Three other properties Berthyl Holdings owns in the City of Davenport have similar histories: houses with files thick with problems sold on contract. The contracts allow him to remain as deed holder of the property while the “buyer” pays it off.

Of the four contract properties he owns, three have failed. The one contract that appears to be heading toward fulfillment also is heading toward the city’s demolish list.

818 W. 14th St.

The problems for 818 W. 14th began in 1997, according to records at the Community Services Division for the city of Davenport.

That first notice, addressed to Fahs in November 1997, notes problems with smoke detectors, the electrical system, screens, a door, debris in the yard and missing wall covering.

More notices followed in 1999, 2000, 2001 and 2004. Problems cited included leaking faucets, growing mold, bad floor covering, a leaking roof, defective toilet and vermin infestation.

The property was declared a nuisance in August 2005 because of debris and inoperable vehicles on the property.

A notice generated from the property’s last inspection, in March 2006, listed a host of problems: missing wall socket, broken window pane, bug and vermin infestation, bad floor coverings, missing heat ducts or registers, deteriorated gutters and downspouts, missing screens, inoperable smoke detectors and debris in the basement.

The next notice for inspection in January 2007 was countered with the contract sale. The Aug. 1 raid at the house left it boarded and abandoned.

Fahs hired an electrician to fix the problems at the house, he said. He plans to begin cleaning it up soon.

A city inspection is set for Sept. 2.

2029 Pershing

The first notice for 2029 Pershing was issued in January 1995 for problems with smoke detectors and window locks. Fahs owned the property.

More letters followed citing problem after problem: two in 1997, then in 1999, 2000, 2001, 2003, 2005 and 2006, when inspectors noted no electrical, gas or water service to the property.

On April 10, 2007, the city sent Fahs a letter, informing him of a scheduled inspection. Angie Valtine and Gilbert Taylor signed a contract two days later to purchase the property.

“That was just as bad a choice as Bessie,” Fahs said. “People kept moving in.” And unlike a rental, Fahs said, he has little control over who lives there.

He added: “I know it looks bad. I never meant to be sidestepping the inspections.”

Six months later, the house was vacant. The city tagged it as unfit for occupancy because “violations were of such a severe nature.” They included issues with the roof, paint, screens, electrical system, gas appliances, plumbing, shed at the rear of property and foundation deterioration.

The city issued an order in March 2008 to repair it or have it demolished.

“Please be advised, a sale of this property will not negate the order to repair or demolish,” the letter says.

Complaints from the neighbors continued. So did the debate with city leaders about what to do with the property. Fahs appealed the city’s order. Glenn Hobart, who manages Community Services Division, recommended last month the property demolished because hardly any work was done.

“For nine months the owner has had the opportunity to repair the building. The fact that the owner is gutting the building to the studs demonstrates a notice and order to repair or demolish was justified. It has taken the owner nine months to get this far with the project and the neighbors should not be expected to wait months or years for completion,” he wrote.

The Property Maintenance Board of Appeals gave Fahs until the middle of November to bring the house up to code.

“The guys are working on it,” Fahs said. “That’s on schedule (and) will be all done by the deadline.”

1409 Christie

The first letter in the file of 1409 Christie St. was from August 1993. Roy Scott owned the property, which had a significant number of problems, from electrical to floor coverings, to paint and chimney.

A May 2001 letter cites problems with the electrical service, deterioration of the roof overhang and wall covering. “No progress, conditions have worsened.”

In May 2004, Fahs now owned the property and sold it on contract to Candice Vernon and Michael Walker. The contract failed.

He again sold it on contract to Gwendolyn Skipper in October 2007.

But the utilities were off in November 2007. The property is now vacant and still with no utilities.

924 W. 6th St.

Two doors down from Café on Vine, which serves free meals to the poor, and next to a blooming community garden is 924 W. 6th St. The paint is peeling. There are no steps to the front door. It is empty.

Back in 1990, inspectors cited problems with the electrical system, the chimney, the gutters, the roof and debris in the yard. Through the years, problems with debris, roaches, the chimney, unsanitary conditions and a deteriorated porch plagued the property.

In August 2004, John Fahs is listed as the owner as the problems continued. He received a letter in November 2004, giving him a “final notice and order” and setting an inspection for January 2005.

Fahs called in January and said he needed more time. By March, nothing was done. At the end of March, Fahs told the city the property was sold.

In July 2005, Kathy Hunley signed papers to buy the house on contract. Three years later, the property languishes.

Hunley, Fahs said, has about six months worth of payments left on the contract. Then, she’s “going to get ready to start working on it.”

“I would say in a year that house will look different than now,” he said. Hunley could not be reached for comment.

Fixing the loophole

A solution is not clear-cut. But as leaders anticipate the declining economy will equal an increasing number of rental property and contract sales, the need for an answer might be more pressing than ever.

Chief Mark Frese, who oversees the Community Services Division, would like to ban contract sales in the city. Noting that is unlikely, he said that without additional staff he does not support routine inspections for all properties being sold on contract.

For now, inspectors respond to complaints on contract properties, he said.

Frese offered one change he would like to see made to city practice: He wants to make it easier for landlords to lose their license.

The most recent City Council debate focused on an ordinance that required a 3 percent down payment before removal from the inspection list. It was repealed, however, last year after complications with enforcing the ordinance.

Already-strapped inspectors spent considerable time at the Scott County Recorder’s office trying to determine if there were differences between rent-to-own agreements — those with a 3 percent down payment and contract purchases, Frese said.

Alderman Bill Lynn championed the ordinance. He would like to revisit the issue and reconsider how to have a down-payment requirement and possibly a required paid inspection before a rent-to-contract house drops from the routine inspection list.

Loxi Hopkins of Quad-City Interfaith said it is clear landlords are getting around the rental inspection ordinance by filing so-called contract sales with the Scott County Recorder.

“I am seeing some situations that are horrendous where people are taken advantage of,” she said. “People go in believing they had a fixer upper.”

But the deed holders “get all the benefits. They get the tax deduction. They get everything. The contract holder has all of the responsibility for taking care of the property.”

She added: “The city needs to get serious about the contract sales.”

Meanwhile, Richard Vesole, who is representing Fahs on the forfeitures of 818 W. 14th and 2029 Pershing, said Fahs will not be selling those properties on contract again.

Ann McGlynn can be contacted at (563) 383-2336 or amcglynn@qctimes.com.