March 7, 2019 – Kenisha Mathis, a Philadelphia medical assistant, lived with her two young children in a home with a collapsing ceiling, broken doors, faulty wiring, and no assurance of lead safety. She asked her property manager to fix these problems for more than six months as conditions continued to deteriorate, and received nothing but threats of eviction in response.
Represented by the Public Interest Law Center, Ms. Mathis sued her landlord ABC Capital on March 14, 2018 in the Court of Common Pleas for violation of the Philadelphia Lead Ordinance and Pennsylvania’s Landlord and Tenant Act, as well as breach of contract for failing to provide a habitable property. On July 30, 2018, the Court entered a default judgement against ABC Capital. Despite this, ABC Capital went on to argue in a contested damages hearing that it caused Ms. Mathis no harm, and that she should therefore be awarded no damages. The Court disagreed, granting Ms. Mathis $22,400 in damages on February 28, 2019. This amount exceeds her total payments in purported rent, fees, and water bills to ABC Capital during her tenancy.
ABC Capital is one of Philadelphia’s largest landlords. The company advertises “10% ROI passive income with turn-key rental investments” and holds more than 1,300 Philadelphia properties in its portfolio, located almost exclusively in low-income neighborhoods. It sells homes to investors, and in 2015, ABC Capital sent more than $5 million in rent to its clients. It was featured in a November 28 Philadelphia Inquirer article, “Who’s your rent money going to? Philly bill would unmask LLCs,” highlighting the company’s common practice of helping investors establish limited liability corporations (LLCs) to allow them to remain anonymous. Ms. Mathis’s home was owned by Jeff and Janice LLC, a Pennsylvania LLC with the same registered address as ABC Capital’s primary place of business.
“We are thrilled that this judgment ensures that this unscrupulous landlord won’t see a dime of the money they unlawfully collected from her.”
“Turn-key rental investment and property management companies like ABC Capital promise their clients high returns, zero involvement, and very little risk,” George Donnelly, a Law Center attorney who is representing Ms. Mathis, said. “This whole enterprise is paid for by low-income families like Ms. Mathis’s, who send thousands of dollars to ABC Capital in exchange for substandard and unsafe housing. We are thrilled that this judgment ensures that this unscrupulous landlord won’t see a dime of the money they unlawfully collected from her.”
Ms. Mathis was also represented by pro bono counsel Sara Richman, Leah Greenberg Katz, and Connie Lee of Pepper Hamilton LLP.
In October 2015, Ms. Mathis moved into a house on the 3800 block of North 7th Street with her 7-year-old daughter. At the time, she was visibly pregnant with her son, and signed his name on the lease. He was born on December 2, 2015. By Philadelphia law, the owners of all properties in the city built before 1978 must provide a lead-safe or lead-free certificate to all renters with children under the age of six, certifying that the property is safe. This is a requirement to collect rent in Philadelphia. Ms. Mathis never received such a certificate. Later, a blood test revealed that her son has lead in his bloodstream.
After an assessment of damages hearing, the Court of Common Pleas entered a judgment against Jeff and Janice LLC, the anonymous property owners, for violation of the Philadelphia Lead Paint Disclosure and Certification Law. The Court assessed $17,000 as a refund of all rent that Ms. Mathis paid while living in the home, as well as $2,000 in exemplary damages—the largest punitive penalty specified under the law.
“Despite everything we know about the terrible effects of lead exposure on learning and development, thousands of kids in Philadelphia are poisoned every year,” Mr. Donnelly said. “The least we can do as a city is require property owners to provide safe housing to children. We hope that this judgment will send a strong message to other Philadelphia landlords who shirk this crucial responsibility.”
“Philadelphia’s Lead Ordinance is one of the city’s most significant pieces of landlord-tenant legislation, as it directly affects the health of children,” said Ms. Lee. “We are pleased that the Court reinforced how important it is for landlords to ensure the safety of their most vulnerable tenants.”
“We are pleased that the Court reinforced how important it is for landlords to ensure the safety of their most vulnerable tenants.”
The lack of assurance of lead safety was not the only issue with the home. In November 2016, Ms. Mathis asked ABC Capital to fix several major problems with the house, including water leaking through her kitchen ceiling. Ms. Mathis went to ABC Capital’s office, sent letters, and used its online system. ABC Capital did nothing, and the kitchen ceiling collapsed a few months later. Finally, in September 2017, the Philadelphia Department of Licenses and Inspections cited Jeff and Janice LLC for eight violations, including the collapsed ceiling, a back door that would not lock, no smoke detectors, and electrical hazards in the bathroom.
Two weeks after L&I filed these violations—rather than addressing these serious issues—ABC Capital brought suit to evict Ms. Mathis and her children. It eventually withdrew the case. Ms. Mathis and her children finally left the property in November 2017.
In its assessment of damages, the Court also brought a judgment against Jeff and Janice LLC for breaching the implied warranty of habitability on the property, and found that Ms. Mathis was entitled to a return of all the rent she paid while ABC Capital ignored her repeated repair requests, from November 2016 to July 2017. The Court had already called for a refund of this rent due to the violation of Philadelphia’s lead paint ordinance.
ABC Capital, after allowing the property to deteriorate for a year, held on to Ms. Mathis’s $1,700 security deposit with no explanation, in violation of Pennsylvania’s Landlord and Tenant Act. The Court issued a judgment against ABC Capital and Jeff and Janice LLC for this violation, granting Ms. Mathis her deposit back plus $1,700 in damages.
“Given the stark power imbalance between landlords and tenants in the city, far too many property owners and management companies think they can get away with exploitation and neglect,” Mr. Donnelly said. “This judgment sends a strong message to all Philadelphia landlords who flout the law and their responsibility to provide safe housing.”