Class Action Complaint over Rental Fees in Hammond, IN
On July 18, nwitimes.com published an article titled Class Action Complaint Filed over Rental Fees.
Class action complaint filed over rental fees
HAMMOND | A class action complaint has been filed against the city and Board of Public Works and Safety regarding rental property late fees.
According to the lawsuit, the Board of Works has been operating in a quasi-judicial capacity by conducting rental registration hearings and assessing fines and penalties against landlords and property owners for violations of a city ordinance.
Hammond has an ordinance requiring landlords to pay an $80 rental registration fee for each rental unit to be paid annually by April 15. Those who miss the deadline are brought before the Board of Works for a hearing to determine if they will pay a $500 per unit late fee.
The complaint says those hearings are in direct violation of an Indiana code that affords City Courts exclusive jurisdiction over all city ordinances.
“The statute says if you are going to have this rental registration that if you are going to fine someone in violation of the fee then you have to bring it into City Court,” said attorney Carla Pyle, of Rubino, Ruman, Crosmer & Polen LLC, in Dyer.
Pyle, who is counsel for plaintiffs Randy Chariton and Paul Malarik and “others similarly situated,” said the Board of Works is also not an impartial board because it is funding itself.
The three Board of Works members named as defendants in the lawsuit are Stan Dostatni, Ed Krusa and Jeffery Smith.
Hammond city attorney Kris Kantar said the city gets sued all the time and there is “nothing special or magical about this case.”
“All you need to sue the city is an idea and a filing fee and sometimes the filing fee gets waived,” she said. “The whole complaint is based on a false premise.”
Kantar said there is no fine or fee imposed by the Board of Works, that it’s only the grant or denial of an appeal.
“The city of Hammond’s rental registration ordinance states if you don’t register your units by April 15, there is a late fee added on,” she said. “If you don’t register, then the fee is applied to the cost. The city can – and does – take you to City Court. City Court can – and does – impose a fine.”
Kantar said late fees can be large – one manager of a multi-unit property was facing $40,000 in late fees this year alone – so the city allows an appeal of that late fee imposed by the ordinance and not by the Board of Works. The board grants the appeal and says to register at the normal rate or denies it.
“It does not create anything that didn’t previously exist,” Kantar said. “The appeal can be for various reasons, such as the property is not a rental, it was vacant, you have the wrong owner, the owner was in the hospital or dead when the deadline passed.”
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