Sunday, January 20, 2008

Affordable Housing of Lawrence County faces potential lawsuits

September 13, 2006

By Pat Litowitz
New Castle News

Legal action is looming against a failed nonprofit housing group.

The threat of lawsuits comes as Affordable Housing of Lawrence County auctioned seven properties for $56,200 over the weekend.

The group purchased the structures last year for $295,000.

An eighth building, located on Dewey Avenue and bought in 2005 for $45,000, was sold prior to the auction. Details of the transaction were not disclosed.

Deno DeLorenzo, Affordable Housing’s secretary and treasurer, said yesterday he plans to obtain legal counsel to investigate the original purchases. He wants to determine if either the group’s former board members, its consultant Robert Ratkovich, the appraisal company or the properties’ previous owners are liable for damages.

“What role did the board have in this transaction?” DeLorenzo asked. “It seems like the board was relying on Mr. Ratkovich to make prudent decisions on the (properties).”

Ratkovich, who is New Castle City Council president, declined comment last night. He also is maintenance director at the Lawrence County Housing Authority, which created Affordable Housing.

During the housing authority’s work session yesterday, solicitor Louis Perrotta discussed the auction with board members.

He and the authority’s executive director, Robert Evanick, “thought the properties should have been listed with a Realtor to maximize the selling price.

“There were some Realtors that were interested,” he said.

In April, Affordable Housing placed one advertisement in the New Castle News listing the properties for sale.

The authority holds a $200,000 unsecured promissory note with Affordable Housing. The funds were used to help start the group in 2003.

Perrotta said the board will have to decide if it wishes to file an injunction to prevent the properties from being transferred or to sue Affordable Housing in an effort to recoup funds.

“I don’t have a problem trying to get money back from Affordable Housing,” board chairman Robert Heath said.

DeLorenzo had offered the housing authority, through its solicitor, $500 for each property sold at Saturday’s auction. The board did not respond to that proposal.

Auctioneer Ray Mazzanti received $7,000 for his services. Funds from the sale also were used to pay legal fees, property taxes and sanitation liens.

DeLorenzo said he would set aside $3,500 for the housing authority. The remaining funds are earmarked for First Commonwealth Bank, which holds the mortgage.

“The bank agreed to this,” he said of the auction. “If they believed an auction was sufficient enough, they obviously saw that a Realtor wouldn’t have brought in much more.”

DeLorenzo said the deeds listing the new owners would be recorded today at the county government center.

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