Investors bought a rundown Sacramento apartment complex, then pressured Afghans to leave
An Oakland-based real estate company that says it is “able to achieve top rents within months” pressured at least six Afghan families to move out of a property, pursuing them for rent they paid to the previous building manager.
The families, all of whom fled Afghanistan for their lives and resettled in the Sacramento area, are the type of tenants their current building manager said the company would not normally rent to: Low-income, with no credit histories.
The Bee spoke to six current tenants who said the previous building manager collected February rent in cash and money orders from each of them by Feb. 2 — the day before an LLC affiliated with Oakland-based Redwood Property Investors assumed ownership. The tenants produced receipts confirming the payment, but a Redwood executive said they never received the rent payments from the previous manager.
The new owner has not pursued evictions through Sacramento’s court system. Instead, the real estate investment company repeatedly asked the residents to pay the rent they’d already paid or leave their homes in three days — potentially an informal eviction that happens without court oversight.
The tenants’ story reveals the stark power imbalance between low-income renters and landlords in the midst of a California homelessness crisis. With their lack of credit history and limited English skills that stymie their job searches, these tenants were in danger of becoming homeless and weren’t sure how to advocate for themselves. Surrounded by thousands of unhoused people on Sacramento’s streets, they were terrified of risking a documented eviction record if Redwood pursued legal action. And Sacramento County, they found, has a stunning lack of legal resources for renters who want to fight for their homes before a landlord takes them to court.
One tenant who spoke with The Bee, an English learner who helped organize a conversation with five of his neighbors, explained the tenuous position they were in. “Nobody speak English, and nobody know about the culture in America,” the organizer said. “If it’s Afghanistan, we solve our problem in there, where we know culture. … But right now, we don’t know what (we should) do.”
Over a two-month period, the new owners posted multiple three-day pay-or-quit notices, demanding that the tenants pay another full month’s rent within three days or move out. The most recent notices were sent out April 7, telling tenants that if they did not pay or leave the premises, “your Landlord declares a forfeiture of the agreement under which you hold possession of the Premises and will institute legal proceedings.” That same day, Redwood’s chief financial officer, Cliff Jackson, wrote to The Bee, “Our initial findings reveal that a number of residents were defrauded by prior ownership.”
The Bee reached out by email and phone to the lawyer representing the previous owner, Richard Cohen, in a habitability and harassment lawsuit; his attorney, Denise Serra, never responded to an inquiry for this story.
After both telling The Bee the rent had been paid to previous management and giving the tenants another three-day notice April 7, Redwood asked residents to sign a document, described as an effort to “start off on the right foot.” In the document, management wrote that the February payments were stolen by an employee of the previous owner. Then, they asked tenants to agree to pay rent by the first of the month every month from April to September. Under the terms of the agreement, if a tenant paid any later than the first of the month, they would owe their February rent money again.
Many tenants signed the agreement, out of fear that Redwood would pursue the “debt.”
According to the law, “The landlord’s outta luck,” said Andrew Wolff, a housing attorney based in Oakland. “Given those are the facts, and they have evidence like that, I think there is very little risk of (the families) owing that money. … The rent was due, they paid it.”
The families believed they shouldn’t have to pay the rent a second time, but they knew their housing was on the line. One tenant, the organizer, told The Bee that when he received the first three-day notice in February, he was immediately terrified — of losing the place he, his wife and their children call home and of having an eviction on his record.
He was worried that the fragile life he was building in the U.S. could be destroyed if his already meager credit and rental history were marred. The organizer emphasized that he and his neighbors — all of whom were forced to flee the Taliban for their lives and cannot return to Afghanistan now that the U.S. withdrawal has left Islamic fundamentalists in control of their home country — were newcomers without resources or a robust social network.
The organizer said he and his family are scraping by on payments from Sacramento County like their Afghan neighbors, as they search in vain for employment. If the families were evicted from their rundown apartment complex in suburban Sacramento County, “I don’t know where we go,” he said. “We just came here.”
When the rent went missing, the new landlords blamed the tenants
The organizer recalled the previous manager urgently collecting rent in cash on Feb. 1 and 2, even though rent was usually due by the fifth of the month. (Because he, his neighbors and their relatives still in Afghanistan fear retribution from the Taliban, The Bee is not naming them.)
When the new management showed up after assuming ownership Feb. 3, it was the first time any tenants had heard about the sale of the complex. Redwood’s property manager quickly asked the Afghan families to pay February rent. The organizer was indignant. He told the manager they already paid.
The families immediately produced their receipts. The previous manager gave handwritten receipts for the cash payments he had insisted on for months, which the tenants, new to the country, did not know was unusual. Multiple tenants who paid cash showed The Bee — and Redwood management — receipts for several months.
In response, the new managers told them that they should make police reports because the tenants were the victims of a theft. Five families from the building reported the thefts to the Sacramento County Sheriff, the sheriff’s records department confirmed.
Management quickly began handing out three-day pay-or-quit notices in February. The new building manager, Eravan Bell, told The Bee that the multiple three-day notices — which are often the prelude to a formal eviction — were not actually meaningful.
“No one has threatened anybody to leave,” Bell said. “Three-day notices, that’s customary.”
Bell insisted that they weren’t actually asking the tenants to leave, although the notices literally ask them to pay or leave, saying explicitly that the tenants had three days to pay the missing rent “or quit and deliver up possession of the premises.”
In a March 11 email to tenants which was viewed by The Bee, Bell wrote that there was “a discrepancy with February rent payments during the transfer of ownership” and told the tenants, who speak limited English, to send receipts by email or text “in order to avoid further action.”
“People are being a little dramatic,” Bell said on the phone. “I think we’ve been more than kind and more than gracious.”
Redwood Property Investors’ CFO, Jackson, has wavered about acknowledging that the rent was paid. Jackson said in a phone interview on April 5 that Redwood was “just trying to gather the facts” during the two months that the company continued to demand money from the Afghan families. He said he considered the receipts to be “no proof whatsoever” that the families had already paid. Then, on April 7, he wrote an email to The Bee saying the rent had been “paid in cash to the former employee of the ex-owner.” In a follow-up email, he backtracked, saying, “We will never get to the facts.”
After more than two months of pressure from management and overwhelming fear that their housing prospects would be even worse with an eviction case on their records, most of the tenants signed the agreement to pay rent no later than the first or else incur what amounts to a late fee worth a full month’s rent — more than $1,000 for each of them. The real estate company had taken 63 days to offer this agreement on April 7, and told the tenants they had to sign it by April 9.
Laughing, the organizer explained that he could barely afford household bills, let alone a rent payment that he already made. “If I have more money, I give him,” he said, “but I don’t have more money.” The organizer believes around 22 families in the complex were in the same situation as his family and the families of five other men who spoke with The Bee.
An Afghan family was turned away at the door
Additionally, a seventh man had a lease agreement signed by former building management. The lease confirms that he paid $2,900 — first month’s rent plus a $1,450 deposit — for a two-bedroom unit; he, his wife and their seven children were to move in on Feb. 10, according to the written agreement, which he allowed The Bee to inspect. He said that the building manager stole his deposit as well and that the current owners are refusing to honor the contract. (Cohen, the former owner, did not respond to a request for a comment, and The Bee was unable to reach the former manager.)
The would-be tenant said he has since had to temporarily move to a dangerous area in Sacramento County because that was the only housing a resettlement agency could find for his large family. Wolff, the housing attorney, was surprised by the man’s story. “The new owner stands in the shoes of the old owner,” he said, pointing out that the prospective tenant could sue them.
Bell, the current property manager, said on the phone that four or five families had shown up on or around Feb. 3 saying they had leases and were set to move in. He said the previous property manager had not had the authority to execute leases, and so the prospective tenants’ leases were illegitimate. The lease obtained by The Bee did not appear to have the same signature as the manager Bell said was not authorized to execute leases, although it was unclear who had signed it and the owner/agent’s signature was dated in July.
Bell also said that the leases he described as illegitimate were handwritten and looked like receipts. The lease inspected by The Bee was a typical, formal lease, but Bell said he hadn’t seen anything like that. Furthermore, Bell said he didn’t know anything about the man who spoke with The Bee, and that he thought he had moved in all the families who had signed leases with the previous manager.
A document released by the sheriff’s office confirms that Bell did let at least one couple move into the building when they showed up with a handwritten receipt. After moving in, that couple was in the same predicament as many of their neighbors. The pair reported to the police that on Jan. 24, they paid $3,750 to the previous manager and were given a receipt and keys to their unit; they moved in Feb. 4. After they paid March rent, Redwood served them with a three-day notice and tried to collect February rent from them again.
“We looked out for a lot of those people,” Bell said. He explained that the people who arrived around Feb. 3 had little to no income and bad credit or no credit, which does not fit with Redwood’s model, but he let them move in anyway “out of the kindness of our hearts.”
When pressed about the family that had a standard lease and had not received the two-bedroom unit, Bell said he was “actually super busy trying to turn a terribly-ran property around” and ended the call. Similarly, Jackson said he had not heard anything about this prospective tenant, and shortly thereafter, he said he had “a call that I’m 10 minutes late for” and ended his 12-minute call with The Bee.
Trying to get higher-income tenants into the building moving forward would fit with Redwood’s strategy. The company says on its website that it “is able to achieve top rents within months for properties which were previously severely underperforming financially. Redwood leverages its experienced Property Management team’s expertise with each new acquisition.” Bell described this new complex as badly managed — it was one of the county’s worst offenders for health and safety violations, and lawsuits against the previous owner describe unchecked leaks, roach infestations and bedbugs, among other complaints.
This is in keeping with Redwood’s modus operandi: Redwood Property Investors says it focuses on buying apartment buildings that are “poorly managed or require a renovation.” Since acquiring the Arden Arcade complex, the company began advertising it as “a rapidly improving community.”
Newcomers, without credit history, were stuck
The organizer said the apartment complex is home to a lot of people who fled Afghanistan because management under the previous owner, Cohen, was unconcerned with credit checks.
That management style was key: Refugees and Special Immigrant Visa holders are generally unemployed when they first arrive, with no credit history.
“They didn’t check the background,” the organizer said. “Anyone give them money first, they give apartment for him.”
The new Sacramentans’ were in a bind, essentially forced to live in any place that would accept them. “We all have kids,” the organizer said. “We don’t have other option.”
Repulsive conditions at the complex are documented in lawsuits against Cohen: While two lawsuits filed by four residents in 2016 described defective electrical systems, leaks, mold, bedbugs and cockroach infestations, another case filed in 2020 by two more residents describes rodent infestations, defective plumbing, mold, mildew and open holes in the walls. Management did not fix the problems, the plaintiffs said. Cohen’s attorney, in one court document from April 2021, partly denied Cohen’s residents’ claims by arguing the tenants didn’t notify management of the habitability issues, and that someone else caused the habitability issues, and that the tenants themselves caused the habitability issues.
Despite the conditions of the place, the Afghan families felt they were stuck there.
The tenants thought they wouldn’t be able to find better housing, but they also weren’t sure how to advocate for themselves in the housing they already had. Julie Caspersen Schultz, a neighbor who teaches English as a second language and organized a grassroots mutual aid network for Afghan refugees, has been helping the families respond to Redwood. She encouraged the men to speak with The Bee.
Caspersen Schultz tried to find the families some kind of legal assistance. “I called a few places and didn’t get anywhere, and I am a native speaker,” she said. “They are in survival mode with many young kids and don’t have time to try to figure it all out. … I can’t imagine navigating all of this and being new to the country.”
The state has a yawning gap in services, said Wolff, the housing attorney. “Even when there are nonprofits, because of the volume of the abuse that goes on, (some tenants) don’t get served,” he said. “The system that we currently have appears to be incredibly skewed toward landlords.”
The organizer felt the same way. He repeatedly said that none of them could afford a private lawyer to defend them, and they had been unable to access free legal services. He laughed grimly with one of his neighbors about fleeing death in Afghanistan to face a new kind of menace in the U.S.
In their home country, “Our lives is in danger in there. We prefer our life in (America),” he said. “Some people, just only they make problem for us. … If (newcomers) don’t know about American culture, why there is some people who do the wrong thing for these people?”
This story was originally published April 26, 2022 at 5:00 AM.
