November 2nd 2024.
In recent months, the owners of some rundown apartment buildings in Aurora and Denver have been facing a new challenge. The Colorado Attorney General's Office has launched an investigation into their practices, suspecting possible violations of the state's safe-housing and consumer-protection laws. According to records obtained by The Denver Post, the state office served subpoenas to CBZ Management, one of the main representatives, and several of its subordinate companies in September. These subpoenas seek answers and records related to various aspects of CBZ's operations, including how they advertise their properties, how they handle maintenance requests and health code violations, and how they screen tenants.
CBZ Management's buildings in Aurora have been the subject of numerous complaints from tenants and local authorities. The properties have also received attention on an international level due to allegations that gangs have taken over. The attorney general's office has indicated that they believe CBZ and its associated companies may have engaged in misrepresentations, omissions, or unfair practices that could harm consumers, public health, or public safety. The companies were given a deadline of October 25th to respond to the subpoenas.
One key aspect of the investigation is the state's Warranty of Habitability statute, which regulates housing conditions. In May, the law was amended to allow the attorney general to investigate cases where there is a pattern or practice of violating this statute, or when a violation is of public importance. This portion of the investigation is likely the first of its kind in Colorado. The subpoenas show that the probe is not limited to CBZ's troubled properties in Aurora, as demands were also sent to companies that own properties in Denver, Edgewater, and Colorado Springs.
The attorney general's office declined to comment on the investigation, and representatives for CBZ, including Zev Baumgarten, the Colorado-based representative, did not respond to requests for interviews. In an email to a deputy attorney general, CBZ's attorney, Walter Slatkin, noted recent media reports about the company's properties and the gang allegations. He expressed frustration with the response from Aurora officials.
It is not clear what prompted the investigation or how long it has been ongoing. However, two former tenants who lived at one of CBZ's properties in Denver between 2021 and 2023, Peter Svaldi and Victor Kurtz, stated that they had filed complaints and spoke with officials from the attorney general's office in the past year. Their complaints alleged that CBZ had engaged in insurance fraud related to security deposits. Both men moved out of the property before their leases were up due to issues such as no hot water and habitability concerns. Colorado law allows tenants to break a lease under certain conditions, such as housing conditions being unacceptable.
Instead of a traditional security deposit, Svaldi and Kurtz said they were required to obtain insurance from a third-party company when they moved in. When they moved out in 2023, CBZ filed claims with the insurance company for lost rent and then pursued the men for the money. They were also pursued by debt collectors hired by CBZ for the lost rent. Kurtz stated that another tenant who filed a complaint listed him as a witness.
Svaldi sued the CBZ-controlled company that owns the property in 1399 Vine St. for the condition of the property and also sued credit reporting agencies to have the debt removed from his credit report. The case has been mostly resolved, except for the claims against CBZ, as the company has not responded to the suit. Svaldi believes he will need to refile his lawsuit but cannot afford to do so. He expressed frustration with the response to CBZ's practices and stated that his faith in the justice system has been shaken. Svaldi even protested outside the attorney general's office in September. He now wonders if he should have just paid the company and moved on, stating that he is exhausted and cannot afford to keep paying his attorney.
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