Former Latitude Five25 tenants to split $1.5 million in settlement

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COLUMBUS, Ohio (WCMH) — Former tenants of a 400-unit apartment complex rendered uninhabitable by failing heating systems, burst water pipes, repeated bug infestations and asbestos will be compensated through a $1.5 million settlement fund.

City Attorney Zach Klein announced Wednesday that the lender financing the owners of the Latitude Five25 apartments has entered into a $1.5 million settlement with the city — in exchange for foregoing the $2.5 million the owners were previously court-ordered to pay. The settlement will be used to create a tenant fund to reimburse former residents who were forced out of the complex in December 2022 due to poor living conditions.

“This agreement is a major next step to seeing money put back in the pockets of tenants and sends a clear message that bad landlords operating unsafe, unsanitary properties in the City of Columbus will be held accountable for deplorable living conditions,” Klein said in a news release.

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The pair of towers on Sawyer Boulevard, visible from Interstate 670, had been under city scrutiny since early 2022, when the city took owners Paxe Latitude to environmental court over bug infestations, stairwells contaminated with feces, and general unsanitary conditions. In October 2022, the city announced Paxe Latitude would enter into an agreement to sell the property after letting conditions at the complex further deteriorate into extended periods without power, water or garbage removal.

Then, on Christmas that year, hundreds of residents were ordered to vacate the property due to burst water pipes and a lack of heat. The city quickly followed the evacuation by filing a motion to hold Paxe Latitude in contempt of court for failing to abide by its agreement with the city.

Last February, a judge ordered Paxe Latitude to pay nearly $4.4 million in fines and outstanding utility fees, including $2.5 million to compensate the former tenants. The also court found that in trying to rehabilitate the building, the owners hired contractors who didn’t comply with law or industry standards when handling asbestos, leaving many residents’ belongings contaminated with the cancerous fibers.

Paxe Latitude then filed for bankruptcy in New Jersey, where the company is based, but that claim was later dismissed. It never paid the $2.5 million contempt fee, the settlement notes.

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Lument, the lender that financed Paxe Latitude’s purchase of Latitude Five25 to the tune of $15.8 million, will pay the $1.5 million settlement out of the money it received from the insurance claim on the property.

The Legal Aid of Southeast and Central Ohio, which represented nearly 130 former tenants in court proceedings, will maintain the tenant fund and disburse it to former residents. Each former resident is entitled to at least $1,000, per the terms of the settlement.

“We’re grateful to the city, county and Lument for their commitment to ensuring that families who were evacuated on Christmas Day will receive some compensation for what they’ve been through,” Melissa Benson, senior managing attorney of the housing team at Legal Aid, said. “While this certainly doesn’t undo the harm done, it is a step towards making things right for tenants who lost their homes and all of their possessions due to a bad-acting landlord.”

This past fall, the city named New Perspective Asset Management as the receiver for Latitude Five25. The company, which has been appointed receivership of over 100 properties in environmental court, has taken over daily operations with plans to rehabilitate the complex into livable apartments.

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