Foreclosure Order Against Apartment Complex in Little Rock

Despite the mortgage holder’s claim that they have no intention of selling the property or evicting tenants, a Little Rock apartment complex is facing not only a foreclosure order but also some legal actions from the city and state. This follows an announcement by Assistant City Attorney Alan Jones in the city’s environmental court.

The mortgage holder in question is Freddie Mac, and the apartment complex is Big Country Chateau, owned by Apex Big Chateau AR LLC, Oron Zarum, and Carpet Tech Inc.

The foreclosure action began when a Pulaski County circuit judge ordered the foreclosure of the complex, a process that allowed the mortgage lender time to evaluate the property and contact city officials requesting assistance to relocate tenants, City Attorney Alan Jones reported to Little Rock District Judge Mark Leverett.

Although Freddie Mac currently has no plans to sell the property, the problems are even worse for Big Country Chateau, as the city has also filed a case against it for ongoing violations, including trash, exposed electrical wiring, mold, non-functional smoke detectors, plumbing and HVAC issues, and broken windows, among others. It’s important to note that the complex only has 20 occupied units out of the 15 it owns.

In recent months, Attorney General Tim Griffin appointed Sal Thomas, a senior official from a Houston-based real estate firm, as an external receiver to collect rent, pay utility bills, and make repairs at Big Country Chateau. Thomas and his attorney, Cody Kees, were absent from Thursday’s court hearing.

In a recent filing with the circuit court, Freddie Mac accepted Thomas as the trustee rather than appointing one of their own. Thomas will not initiate eviction proceedings against any tenant, Jones said, and the city is exploring ways to help tenants move out. Meanwhile, Thomas is working to keep the complex operational and continues to respond to all maintenance requests, as everyone awaits the court hearing for the foreclosure process to begin.

The Complex’s Legal Troubles

Big Country Chateau and its New Jersey-based parent company, Apex Equity Group, are accused in an ongoing consumer protection lawsuit. Former Attorney General Leslie Rutledge filed the lawsuit in August 2022, and Tim Griffin took over the case this past January upon taking office.

According to the Pulaski County Circuit Court lawsuit, the problems began when the complex’s management started defaulting on utility payments, leading Entergy Arkansas and Central Arkansas Water to plan to cut off service to the complex. Tim Griffin stated that despite the foreclosure order against Big Country Chateau, the lawsuit will continue as the owners must be held accountable for their violations of the Arkansas Deceptive Trade Practices Act.

Even though Big Country Chateau’s management settled its $70,000 debt with Entergy Arkansas and made some arrangements with Central Arkansas Water last year, allowing both utility companies to continue providing services, both companies issued another notice to cut service again due to new payment defaults.

Addressing tenants and supporters at Little Rock City Hall, Griffin stated that he had asked Entergy and Central Arkansas Water to delay the shutoffs while his office sought legal remedies. This came as residents voiced their complaints about the insecurity, poor living conditions, and lack of management oversight, which continuously ignored their maintenance requests.

The apartment complex accumulated several code violations after the city’s last inspection, which found at least 10 units were inaccessible due to a lack of maintenance and repairs. Management did not contest the violations in a hearing held last October.

Another more recent inspection revealed further code violations at Big Country Chateau, prompting Leverett to impose $31,950 in court fines on the property owners. Each of the 30 violations received the maximum fine of $1,000.

A month later, Leverett, Jones, and Thomas agreed that the court should address all pending cases and fines against the property simultaneously, as the foreclosure is awaited.

Foreclosures Available:

Little Rock: 15 homes available.

By Elias DaSilva | September 30, 2024