Sunday, January 20, 2008

Housing Authority sues Affordable Housing

September 15, 2006

By Pat Litowitz
New Castle News


The auction of seven properties and the pending sale of an eighth are being challenged in common pleas court.

Judge J. Craig Cox granted a temporary restraining order against Affordable Housing of Lawrence County pending a 9:30 a.m. hearing Monday at the county government center. A judge has not been assigned in the case.

During its session yesterday, the Lawrence County Housing Authority board directed solicitor Louis Perrotta to file suit against the nonprofit housing organization and board members Deno DeLorenzo and William Bonner.

Also named in the complaint were the five winning bidders, Joseph Mazzant, Joseph DeRosa, James A. Mims Jr., Louis Suisi and Carl Rossi, and auctioneer Raymond Mazzanti.

After meeting in executive session, the housing authority board approved three motions dealing with litigation against Affordable Housing.

In the first, the board decided to seek an injunction to prevent the sale of the properties and the transfer of deeds to the new owners.

Perrotta filed paperwork on that request.

The board also approved seeking a $200,500 judgment on a nonsecured promissory note the authority provided to Affordable Housing. The final action involves a civil complaint against Affordable Housing.

Perrotta said he has not moved forward on the last two matters. He said the economics involved in the litigation will determine whether or not the lawsuits are initiated.

Board chairman Robert Heath and Ernestine Wise and Michael Mancuso approved the motions. William Betz was absent.

Affordable Housing, created by the housing authority in 2003, auctioned the seven properties for $56,200 on Saturday.

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

An eighth building, located on Dewey Avenue, was purchased in 2005 for $45,000. That property was sold Sept. 5. Details of the transaction were not disclosed.

Deno DeLorenzo, Affordable Housing secretary and treasurer, declined to comment on the litigation.

Attempts to reach the five bidders were unsuccessful.

The housing authority’s complaint came approximately two hours after the deed transfers were filed with the county’s register and recorder.

“That’s something we’re going to have to address on Monday,” Perrotta said.

The housing authority wants the court to set aside the auction sales and return the money to the bidders. At that point, the board wants the properties to be sold through a real estate agent.

“As a creditor of Affordable Housing Inc., the Housing Authority ... does not believe an absolute auction is an economical method to transfer and sell the properties,” Perrotta wrote on behalf of the board to DeLorenzo on Sept. 6.

“This logic is supported by inquiries made with the Housing Authority of the County of Lawrence by property owners and potential investors.”

By not suing Affordable Housing, the housing authority would have seen as little as $4,000, or $500 per property, as repayment on the promissory note.

Heath said he hopes the litigation will increase that figure.

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