published Friday, August 5th, 2011

Pennrose accused of rent overcharge

Residents of the Villages at Alton Park no longer can pay rent with money orders.
Residents of the Villages at Alton Park no longer can pay rent with money orders.
Photo by Tim Barber.
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A former employee of the company that manages the Chattanooga Housing Authority's Oaks at Camden and Villages at Alton Park developments claims residents may have been overcharged as much as $170,000 in rent.

The accusation comes in a lawsuit filed in July by former Pennrose property manager Julie G. Bucholtz.

In the suit, Bucholtz accuses Pennrose of firing her because she reported the alleged overcharges to the U.S. Department of Housing and Urban Development and CHA. HUD told the housing authority to complete a "100 percent" audit, including rental recalculations, for all public housing tenants who live in the Villages at Alton Park and the Oaks at Camden, CHA's two mixed-finance developments that are privately managed.

"At HUD's direction, Chattanooga Housing Authority is working with Pennrose to correct the rental overpayments made by the public housing residents at Chattanooga Housing Authority's mixed finance and Hope VI sites," according to a written response by Gloria Shanahan, Southeast regional spokeswoman for the U.S. Department of Housing and Urban Development. "We expect to verify in a couple of months that the overpayment of tenant rents has been corrected."

Both current and former residents at the Pennrose managed properties should be eligible for refunds if they were overcharged for their rents, HUD officials said.

CHA officials say they already have begun the audit, but don't know when it will be complete.

James M. Johnson, Bucholtz's attorney, said he has no complaint filed against CHA, only Pennrose.

Shirley Collins, president of the Villages at Alton Park Resident Association, said she has seen her rent fluctuate from month to month even though her income -- which determines the amount of rent she pays -- has remained the same.

"One month I paid $175, then I paid $151, now it's $166. Which one is it?" she asked.

"Everybody is confused about their rent and, when you go in there (to the housing office) they don't want to talk with you about it," Collins said.

Collins said several residents had rent changes in July after Pennrose switched from allowing residents to pay with money orders to only accepting moneygrams. And if residents had been overcharged for rent, they were given credit for future rent payments instead of a cash refund, she said.

Arlene Tuschl, vice president at the Philadelphia-based Pennrose Management Co., said that the complaint is a human resources issue and she could not comment on it.

According to Bucholtz's complaint, the overcharge is a result of "not reimbursing excess utility allowances to tenants."

Pennrose receives money for utility allowances from HUD, which sends the money to Pennrose in the tenant's name. Pennrose uses a formula to calculate the rent and, if the utility allowance is more than the calculated rent, the company must pay the difference to the tenant, HUD officials said.

She said she also found records showing that the same type of rent calculations happened in 2008, but were corrected while Carol Newton, now district manager at Pennrose Management, was property manager. But the "illegal practices had later resumed again" under Newton's watch, according to the complaint.

Newton fired Bucholtz on Nov. 3, 2010, the same day Newton returned from a meeting with the CHA official that Bucholtz had told about the alleged overcharging, according to the complaint.

Bucholtz had worked for Pennrose since February 2010.

Newton could not be reached for comment.

Pennrose must respond to the lawsuit within 30 days of July 18, the date the company was served with the suit, according to the court records.

about Yolanda Putman...

Yolanda Putman has been a reporter at the Times Free Press for 11 years. She covers housing and previously covered education and crime. Yolanda is a Chattanooga native who has a master’s degree in communication from the University of Tennessee and a bachelor’s degree in journalism from Alabama State University. She previously worked at the Lima (Ohio) News. She enjoys running, reading and writing and is the mother of one son, Tyreese. She has also ...

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WEBMAN said...

WOW !!!!!!!!!!!!!!!!!!!

August 5, 2011 at 1:13 p.m.
dao1980 said...

Well, since the requirement in my escrow account changes each year, my overall payment changes with it... and my overall payment sure as he11 isn't a measly little $175 a month!

Those houses look nice with the little garages and what not. Maybe I should quit my job and move in.

August 5, 2011 at 1:30 p.m.
NoMyth said...

These houses appear nicer than the average house in Chattanooga. What a scam! Your tax dollars at work, for people that simply do not want to work. No wonder our country just lost our AAA credit rating!

August 5, 2011 at 9:19 p.m.

NoMyth, trust me it's not because of this that the US's credit rating was dropped. By the way have you read any intelligent/reliable information about what the entire debt issue really is? You don't seem like the brightest bulb in the socket.

August 5, 2011 at 9:23 p.m.
macropetala8 said...

NoMyth, the picture of the homes above in Alton Park Village are not the same as the Alton Park Village Apartments. Those homes are actually purchased by people who pay mortgages the same as you and I do. I don't know why Ms. Putman always write articles in a way she should know will incite anger. She seems to always purposely mix a little bit truth and leave the rest to the imagination. I and others honestly don't understand why she does that.

August 5, 2011 at 10:44 p.m.
futballmom said...

I know for a fact that some people were evicted for non-payment of rent only to find out that they were over charged on rent and should never have been evicted and are owed a refund. Because of this their credit is ruined. Thousands are owed to people. They should be given the choice of getting the cash back or if they want credit applied. This lawsuit is long overdue and I hope the residents sue as well. Especially those that were evicted.

August 12, 2011 at 7:42 p.m.
Yep_I_Said_It said...

Oh please, they were overcharged less than $20 a month. Do you really think they would have paid their rent if it were $20 less? No. They were evicted for NON-PAYMENT. Don't give these people another excuse to get something for nothing.

August 16, 2011 at 11:54 a.m.
futballmom said...

Some of them where overcharged a lot more than that. Some residents are owed thousands of dollars. How would you feel if you were over charged $20 month for. It doesn't matter who it is, it is still wrong. Many of those "people" are hard working and don't want something for nothing. Maybe you need to walk a few steps in their shoes. Don't just assume that because somebody is living in low income housing they are criminals looking for a free ride. And, yes, I do think that some of those people would have paid their rent if it was $20 less. Some of those people were paying what they could on their rent but could never get it caught up. If they were being charged the actual amount they may have never gotten behind.

August 16, 2011 at 2:14 p.m.
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