Small Claims Spat Reflects Big Changes

Rising rents drove Honorio Ramirez and Francisco Mendez Perez out of their apartments on Huntington Street.

A year and a half later, their erstwhile landlord is looking to collect a portion of the debts she claims they owe for months and months of rent-free living in a house she upgraded during the pandemic.

That ongoing legal debate centers on 264 Huntington St., a three-family house that sits across the street from Albertus Magnus College on a sloping, tree-lined block connecting Prospect Hill and Newhallville.

The company that owns that property, 264 Huntington LLC — which is controlled by local landlord, state economic development official and city zoning commissioner Alexandra Daum — is pursuing two small-claims lawsuits in state court against its former tenants, seeking $5,000 from Ramirez and $3,845 from Mendez Perez.

The small-claims lawsuit against Ramirez alleges that he failed to pay rent while he and his family lived in an apartment at 264 Huntington St. between April and November 2020. 

The lawsuit against Mendez Perez alleges that he failed to pay rent while he and his family lived in a different apartment at 264 Huntington St. between April and August 2020. 

Daum’s company initially filed both small-claims cases in late May 2021. 

After nearly a year’s worth of court delays, both cases are now scheduled to have their next remote hearings in state court on Wednesday afternoon. 

Click here and here to read the public documents in both cases.

City land records show that Daum’s company bought 264 Huntington St. for $350,000 in February 2020. Her company also bought the adjacent three-family house at 270 Huntington St. for another $350,000 at that same time. 

These two particular small-claims lawsuits — and their underlying landlord-tenant disputes — reveal conflicts exacerbated by Covid’s impacts on the court system and by rapidly rising home prices in New Haven’s hot real estate market.

They also show how the state’s then-in-place eviction moratorium may have discouraged tenants from paying rent owed at a time when housing court was largely closed to landlords. They raise questions about how building-improvement-induced rent increases may displace tenants from their long-time homes, even as they make properties safer, cleaner, and more convenient to live in.

On the one hand, the tenants in this case argue that a new landlord looking to renovate their apartments and raise their rents left them feeling compelled to move during a pandemic. They felt like they never had a good opportunity to negotiate better terms that would have allowed them to stay, and now they feel like they’re being shaken down by a wealthy individual for money owed from nearly two years ago. 

On the other hand, the landlord argues that she gave these tenants plenty of opportunities to stay or to move out and have their rental arrears forgiven, offers that she also successfully made to other of the building’s tenants. But these two renters in particular, she argues, chose instead to not pay what they owed, and then moved out without her company getting fairly compensated for the services it provided. 

“It was two years ago,” Mendez Perez told the Independent about the rental debts he accrued while living at 264 Huntington St. ​“We don’t understand why this situation is happening?”

Given the time that has passed and the economic hardships of the pandemic, he asked, why won’t their former landlord just ​“pardon the debt?”

Ramirez agreed. ​“They wanted to renovate and increase the rents really, really high,” from around $1,000 per month to $1,400 per month. 

He said he and his former housemate Mendez Perez found it ​“impossible” to stay at those higher rents. 

He argued they should not be hounded now for debts that date back so long and that piled up during the early months of the pandemic.

Daum disagreed with their takes on what happened, and plans on continuing to prosecute both small-claims cases. 

As for the timing of Wednesday’s court hearings, Daum said via an email comment sent to the Independent, the initial small-claims lawsuits ​“were made at the time Mr. Ramirez and Mr. Mendez Perez moved out of the building at the end of 2020.” She added that she filed them with the court in May 2021 because that’s how long it took her company to find out where her former tenants had moved to.

These lawsuits and hearings ​“are coming up again now not because of some new action on the part of myself or my attorney, but simply because that’s how long it took for them to get through the court system,” she continued.

“In the case of Mr. Ramirez, he lived in the building April-December 2020 without paying any rent. If Mr. Ramirez had ever reached out to us to explain why he wasn’t paying the rent -– loss of income, health issues, or similar — we would have been happy to work with him. In fact, we offered him multiple times in writing the opportunity … to move out, cancel all back rent and even offer an additional cash payment. Rather than explain his situation, take the offers at hand or ask for additional consideration due to extenuating circumstances, he completely stonewalled my property manager.” She said she made similar offers to Mendez Perez, all of which fell through.

These two tenants then moved out, she argued, without paying her company rent that was rightfully the landlord’s due.

Tenants: "Pardon?"

Ramirez, a 58-year-old house painter, and Mendez Perez, a 34-year-old food cart operator, spoke with the Independent about these small-claims cases during an interview at the People’s Center on Howe Street. Both are immigrants from Mexico and speak little English. Local immigrant rights activist John Lugo translated their responses from Spanish to English during the interview.

Ramirez said he, his wife, and his six kids had lived in their 264 Huntington St. apartment for six years before Daum’s company bought the building from its previous owner, Mercedes Maldonado. He said his rent under the former landlord was $1,050 per month.

Mendez Perez said he, his wife, and his three kids lived in their 264 Huntington St. apartment for 11 years, and that their rent was $1,000 per month.

They both said they loved where they lived, and would have liked to stay even longer. They said the apartment building’s location right next to Albertus Magnus College made it a safe and quiet block. They said many other Central and South American immigrants lived on the block. And they praised the building for its affordable rents.

After Daum’s company bought the 264 Huntington St. in late February 2020, they said, her company sought to renovate all of the apartments — and to raise the rents in conjunction with those improvements.

Their new rents in the renovated apartments would have been $1,400 per month.

Daum also gave them the opportunity to rent larger three-bedroom apartments at a property she owned around the corner on Sheffield Avenue for $1,600 per month.

Both Ramirez and Mendez Perez said they couldn’t afford that much of a rent hike, especially in the early months of the pandemic.

They and their families both subsequently left — with Ramirez moving out in November 2020, and Mendez Perez in August 2020.

Ramirez and his family now rent an apartment on West Hazel Street in Newhallville. Mendez Perez and his family now rent an apartment on Rosette Street in the Hill.

“It was a difficult time,” Mendez Perez recalled about moving out of his long-time Huntington Street home in the summer of 2020 and looking for a new place to live during a pandemic. 

He said that his new apartment on Rosette Street is ​“a little bit more expensive, and my street is rough.” He said there are frequent shootings and assaults on the block. ​“Huntington Street was peaceful.”

Ramirez said that the high-speed traffic on nearby Dixwell Avenue makes him and his family feel less safe at their new home on West Hazel Street. 

Ramirez and Mendez Perez both acknowledged that they did not pay rent during the time in question at 264 Huntington. They argued that money was tight in those early months of the pandemic.

In legal answers filed with state court in Ramirez’s small-claims case, both Ramirez and his wife wrote, ​“This happened during the pandemic lockdown and we did not have money to pay.”

Ramirez and Mendez Perez also made the case to the Independent that their rental arrears should be forgiven because they haven’t lived at 264 Huntington St. since 2020 — and because the amounts sought by their former landlord pale in comparison to the profits she has made buying, fixing up, and flipping houses during the pandemic. 

According to the city land records database, some of those recent flips by various Daum-controlled holding companies include the six-unit apartment house at 146 Cottage St. (bought in February 2021 for $704,438, sold in March 2022 for $1.15 million), the seven-unit apartment building at 212 Sheffield Ave. (bought in February 2020 for $820,000, sold in February 2022 for $1,028,880), the nine apartments at 66 and 70 William St. (bought in July 2019 for $890,000, sold in February 2021 for $1.35 million), the three-family house at 479 Orange St. (bought in May 2019 for $539,000, sold in June 2021 for $675,000), the three-family house at 109 East Pearl St. (bought in November 2019 for $289,000, sold in February 2022 for $380,000), and the three-family house at 68 Sheldon Ter. (bought in May 2019 for $390,000, sold in May 2021 for $520,000).

​“If she has so much money,” Mendez Perez asked the Independent, ​“why is she going after us for so little money? She’s not going to get richer or poorer” based on these particular small-claims cases. But $5,000 and $3,845 mean a lot to them, Mendez Perez and Ramirez claimed.

“We would be willing to pay more if we had stayed in the house,” added Ramirez.

Lugo, who leads the local immigrant rights organization Unidad Latina en Accion and who also lives on Huntington Street, said that these two aren’t the only tenants he knows getting priced out of this part of the city.

“We have this community here,” he said. It’s ​“painful” to see. ​“The price of the rent in New Haven is so high. … The people who are gonna pay the price is the poor people.”

Landlord: "Gentrification Not The Goal"

Daum, meanwhile, responded in a recent set of email comments sent to the Independent that her company tried and tried to strike a deal with these tenants that would have let them stay in fixed-up apartments at a higher rent of $1,400 per month — or that at least would have forgiven their rental debts if they moved out of the building by July 1, 2020. 

She pointed out how she was able to reach such a deal with one other long-time tenant of the adjacent property at 270 Huntington St., which her company bought at the same time that it bought 264 Huntington. 

She and the tenant, who declined to share his name for this article, said that Daum’s company helped move that tenant into another apartment in the same building while they renovated his unit. He ultimately chose to stay at the higher rent in the highly fixed-up apartment. 

“She renovated the restroom, the kitchen. She put in a washer and dryer,” said that tenant, who is also an immigrant from Mexico. He praised his new landlord as ​“a nice person,” and said he decided to stay at the higher rent of $1,400 per month because of how much the apartment has been improved by Daum’s renovations, and ​“because it’s a good area.” 

In the cases of Ramirez and Mendez Perez, however, Daum said both tenants failed to take her company up on any new leases or debt-forgiveness-and-move-out offers, and ultimately left after living at 264 Huntington St. for free for months and months. 

“My property manager visited his apartment at least 2 times with the printed lease for he and his wife to sign, but he decided to go in another direction without much explanation,” she said about Mendez Perez. ​“To my knowledge, he never said there was an issue with the price or term or anything else in the lease. If he had, we might have been able to negotiate further, but he stopped responding around the end of June and moved out at the end of the summer. If there had been something more I could have done to encourage him to stay, I would have done it.”

She said she made similar offers to Ramirez. She showed the Independent screenshots of text messages between her and her property manager, showing the extent of outreach her company did to try to negotiate with these tenants to get them to stay. She also showed the Independent a Spanish-language write-up her company provided its Huntington Street tenants, letting them know that rental arrears would be forgiven if they moved out by July 1, 2020. 

Daum argued that she shouldn’t have to eat all of the costs of her former tenants’ rent-free living just because the pandemic-delayed court system has taken a long time to process lawsuits that were initially filed in a timely manner. She also said that the $5,000 sought from Ramirez is just a small portion of the debt he owes in back rent. (Connecticut caps small claims lawsuits at no more than $5,000.)

“[D]uring the time that Mr. Ramirez was living at 264 Huntington and not paying rent, my company paid for the property’s mortgage, taxes, utilities, landscaping and maintenance,” she wrote. ​“While incurring those costs, the company received $0 of income for his unit. In fact, by the time Mr. Ramirez moved out, $17,267 in rent was unpaid across his unit and the other two tenants in the building who were also not paying rent – I believe because of his advice. That is $17,267 out of the $27,900 that was owed under the leases at that time – or a 61% loss in income. I would ask any business owner this hypothetical – if someone used your products or services and your business had to pay the costs of those products and services, but that ​‘customer’ never paid the amount they had previously agreed to pay for what they used, would you try to collect the money you believed they owed you? I’m confident that almost every business owner out there would answer ​‘yes’ especially after a 61% drop in revenue and a 0% drop in expenses. Now add to that the fact that I believe the ​‘customer’ in this case was purposely trying to take advantage of a public health law in order to not pay and leave my company holding the bag.” (Ramirez and Mendez Perez told the Independent that they didn’t pay rent at this time not because of the eviction moratorium, but because of a loss of work during the early months of the pandemic. Daum disputed that Ramirez had actually lost any work at this time, based on comments made by her property manager about his work truck traveling to and from home frequently during these months.)

She also argued that her company does much more than just buy and flip properties — instead investing much time, money and resources into fixing up buildings in need of serious repair and then renting them out or selling them at new prices commensurate to their boosted value. 

She said these improvements involve not only fixes to roofs and mechanicals, which would show up in building permits, but also to involve ​“floors, tile, landscaping, lighting, cabinets, appliances and paint. If you swap everything on this list out in every apartment in a building you will incur a huge bill, but none of that may show up in building permit data.”

The ​“purchase and sale numbers really tell very little of the story of these sales and whatever profit there was was commensurate with improvement in value and quality at the buildings and not the result of a ​“do nothing and flip” strategy,” she argued.

And she questioned the very premise that a company should not be able to collect money it’s due just because that company is profitable.

“If a company makes a profit -– whether large or small -– do they not still have the right to ask to be paid for the services and products they provide?” Daum asked.

“If companies that made a profit were inherently unable to charge for their services, then customers would be allowed to take items from stores, get their car fixed for free and their windows washed for no fee all because the companies providing those services were profitable in the past. Some people may desire to live in a society set up like that and I can’t tell them that desire is wrong. I can just say it’s not the way our society is set up currently.”

“Of course,” she continued, ​“there is always room for compromise and consideration in any business transaction. My company was entirely open to compromise with Mr. Ramirez at many points along the way. We transmitted multiple offers to forgive all back rents if he moved out and enabled my company to re-lease the apartment and begin collecting rent to help cover the cost of that apartment. He never took advantage of these offers nor did he reach out to explain a hardship in his life or extenuating circumstances causing him not to be able to pay rent. I believe he overestimated his ability to ​‘game the system’ and was therefore uninterested in compromise. He dug in and lived there 8 months without paying rent. I believe he owed that rent at the time of his vacating and still owes that rent today.”

In response to the tenants’ concerns about gentrification of the Huntington Street block, Daum replied, ​“Gentrification was not the goal of remodeling the building nor has it been the outcome.” 

She said several of the units she fixed up on Huntington Street are now rented out to tenants receiving some kind of rental subsidy. She also referred back to the tenant who who decided to stay on at 270 Huntington after Daum purchased and fixed up the property.

“Gentrification can be a term that is hard to define,” she wrote, ​“but I don’t think anyone’s definition of a gentrified building would be a building where a majority of the tenants qualify for and receive rental assistance. Gentrification was never and is never my goal, but improving buildings is! 

“When I toured 264 Huntington in January/February of 2020 the building was in bad shape. The units had fallen into disrepair with water stains on the ceilings, peeling paint in the units and only semi-functional kitchens and bathrooms. The building has not been renovated into a ​‘luxury’ building by any stretch, but it has been improved to a level of cleanliness, comfort and safety that I think we would all like to see in any neighborhood in New Haven.”