Tempers flare as Phoenix apartment renters beg for answers

Hundreds of apartment residents being forced out of their homes because of an unpaid water bill may have new hope.

ABC15 learned Friday afternoon that a company called 707 Management out of Las Vegas was at the property handing out fliers and telling residents they have bought Granite Bay and that they will pay the water bill.

That overdue bill totals $64,000. This has not yet been confirmed with the City of Phoenix.

A 707 Management spokesperson, Kurt Jacobson, said in a statement that there will be no utility interruptions and that managers and maintenance people are in place to serve the residents.

Jacobson said the new company hopes to hire as many of the employees as possible following the normal screening process.

Besides Granite Bay, Jacobson said 707 Management will also manage Valencia Park and Madera Court in Phoenix, Scottsdale Springs in Scottsdale and the Coves at Newport in Glendale.

Restless residents rushed the leasing office of the Granite Bay Friday morning looking for answers, but finding few.

"Where has the rent money been going," asked resident Todd Schmitt. "I hope the city realized there are 400 families here."

Earlier this week, the hundreds living there came home to a shocking notice.

On each door handle, a flyer from the Water Department explained that their water would be cut off in five days.

It explained the property hasn't paid the bill, and the water will be shut off next week.

Trouble started brewing at the complex months ago.

Granite Bay is one of 13 Valley complexes owned by The Bethany Group, now on the brink of bankruptcy.

Things began happening like late paychecks, repairs unresolved and trash piling sky high.

But most residents didn't know how bad the trouble was until the city notice.

"Upper management told us 'you're on your own,'" said Ben Graham who is part of a small management team.

He said he feels all but abandoned by the owners, but is still showing up to work, even with no paycheck for the past five weeks.

He said he is now reduced to begging for help from anyone.

"Help us, help us," Graham said. "Even though we are doing what we can do, we don't know the legalities of what we can't do."

"I thought there was a law that says you can't turn off water of residences with babies" said Anthoney DeGregoris, father of two. "My wife and I and the kids went looking for a place yesterday."

Once residents got inside the management office, tempers started to flare when they didn't hear what they were hoping for.

At the same time, apartment-finder personnel swarmed the crowd handing out fliers, hoping to lure tenants into new leases at other apartments.

"They'll give us March rent back if we're going to leave" said DeGregoris. "We've got two small kids. We can't live without water."

But ABC15 News is learning that if they leave, the tenants could be held liable for not finishing out their lease, assuming a new company takes over the property.

That's according to Ken Volk, President of Arizona Tenants Advocates, who said, "This is absolutely the worst, but I don't think it's absolutely the worst case."

Volk said this bankruptcy could snowball to effect a dozen other Valley properties totaling 5,500 units.

But his biggest concern is, "If it's Bethany Group, who's next?"

By law, Volk said tenants have a right to work out a deal with the city of Phoenix to keep the utilities on, but it's a catch 22 because the city said it doesn't have to work out a deal with the tenants because the agreement was made with the Bethany Group.

"The utility provider can be jerks about it if they want," said Volk, "The law doesn't require them to do it."

The city refused an on-camera interview but said it's unfortunate the Bethany Group did not make the tenants aware of the six months worth of unpaid water and trash bills.

Therefore, the city said it has no choice but to turn-off the utilities.

"Where does some sense of compassion come into this," asked Volk, "We are in a crisis."

Volk said the tenants have two options.

One is to go to court and try to pay off the mortgage.

The other is to try and form a co-op to take over the property.

Volk said he will hold meetings with affected tenants starting this Sunday at 11 a.m. at The Coves at Newport apartment complex in Phoenix.

The address is 5205 W. Thunderbird in Glendale.

For more information or to talk with Ken Volk, just log onto arizonatenants.com.

Meanwhile, the following cities tell ABC15 Bethany Group owes them:

Chandler: $20,000 on several properties.
Phoenix: $64,000 on Granite Bay
Phoenix: $22,918 on Valencia
Phoenix: $18,942 on Madera Court
Mesa: $30,000 at Tuscany Palms
Glendale: $7,300 at The Coves at Newport

ABC 15 left messages with two members of Bethany Group's executive team in California. So far, we have not heard back from them. Calls into the Bethany Group's home office were met with a full voicemail system.

Statement from Arizona Tenants Advocates

Arizona Tenants Advocates will be conducting meetings with residents of apartment complexes formerly managed by The Bethany Group.

The first meeting is set for 11:00 a.m. on Sunday, March 8, at the front parking lot of THE COVES AT NEWPORT Apartments, 5205 W. Thunderbird Rd., Glendale.

Tenants of Tela Verde Apartments will also be in attendance.

The Bethany Group is a nationwide owner and manager of multi-family rental real estate. Thirteen apartment communities are located in the Phoenix metropolitan area.

According to recent media reports, essential services at many of the communities either have been discontinued, or are at imminent risk of shutoff, and that the company has filed for bankruptcy protection.

Apartment offices have been closed, and Bethany Group representatives have been unavailable for comment. Upon information and belief, many of the local properties have been placed in receivership, and may be heading for foreclosure.

It is widely interpreted that this turn of event represents a disturbing expansion of the foreclosure dilemmas plaguing single-family housing.

The meetings will present and discuss options tenants have in regard to their tenancies.

Topics to be addressed include: how to prevent utility shutoffs; what to do about rent payments; preventing foreclosure of the apartment communities; preventing evictions; fulfilling the lease terms; termination of lease terms; forming cooperatives to purchase the apartment communities; and applicable statutes relative to the matters. Strategies will be outlined and initiated.

Ken Volk, president of Arizona Tenants Advocates, has been a tenants’ activist active since 1993. He is an expert on the foreclosure crisis racking rental properties. Mr. Volk has been in contact with attorneys familiar with The Bethany Group developments, and whose services may be available to work with tenants in implementing legal steps to protect them.

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