$50,000 Settlement: Case Closed on Miami Landlord Accused of Overcharges
Landlords Edward and Judy Daniel were accused of overcharging for rent and improperly charging for parking to Miami-Dade County tenants living in Section 8 subsidized renters.
September 04, 2018 at 12:01 PM
6 minute read
A Miami couple accused of charging impermissibly high rent and parking fees on low-income tenants — during an affordable housing crisis in the city — has paid $50,000 to settle federal claims.
Landlords Edward and Judy Daniel own apartment buildings and rent some of the units under the Department of Housing and Urban Development Section 8 program that subsidizes housing for low-income wage earners.
The federal government investigated the Daniels for allegedly upping the rents and charging parking fees to at least 36 tenants for months at a time from January 2015 to August 2017 — without permission from program administrators. They also were investigated for double-dipping by receiving federal subsidies from two sources for the same time period and unit.
The settlement concluded a nearly three-year civil investigation under the False Claims Act with no admission of wrongdoing.
Edward Daniel owns some of the 12 buildings, co-owns others with his wife, the Edward R. Daniel Revocable Living Trust owns others, and the Edward R. Daniel TRS owns yet others, according to the Miami-Dade County property appraiser's office.
The Daniels agreed to stringent bookkeeping and rent reporting requirements after authorities accusing the couple of poor record keeping and throwing away some records, hindering the investigation.
They hired an accountant who will digitize records for each unit and keep information on, among other things, the tenant's share of the rent, monthly payments, the subsidized rent amount, security deposits and other charges. They also are to annually provide tenants with information in English and Spanish on how much they were charged and paid the previous year. A notice will say the landlord can't ask for more than what's approved under Section 8, according to the July 31 settlement.
Also, the Daniels must get permission to charge fees other than rent and cannot charge for parking.
The Daniels deferred comment to their attorney, Christopher Spuches, who said the couple did nothing wrong and were victims of a “misguided” investigation.
“There's a lot of fraud out there with people doing really reprehensible things with this program. Why they decided to target these folks, I have no idea,” said Spuches, founding member of Agentis in Miami.
Spuches conceded the Daniels didn't ask for permission for parking fees. The issue stems from some residents, many of whom are elderly, asking for assigned parking outside their homes.
The Daniels are in their 70s and a “classic American success story,” offering much-needed affordable housing for 30 years, he added.
“These are people that, like a lot of small business owners, didn't have the most sophisticated record-keeping. Nothing was ever thrown away intentionally. There was no sense that they were going to be investigated because they were doing anything wrong, so they weren't saving things for several years back,” Spuches said. “Everything that the government asked us to provide, we provided. If we didn't have it, we didn't have it. But we gave them a huge amount of information.”
He pointed to the amount of the settlement, of which $11,194 was for restitution, calling it a “nuisance value” and proof that his clients did nothing wrong. Spuches said it's up to the government to decide how to divvy up the money.
Funds for Section 8 housing vouchers are generally distributed to local public housing agencies, which hammer out contracts with landlords like the Daniels. The contracts, one for each unit, specify the total rent, federal subsidy and tenants' rent. Housing authorities deposit subsidies in landlords' accounts based on the contracts.
The Miami-Dade County Department of Public Housing and Community Development, Hialeah Housing Authority and Miami Beach Housing Authority are involved in the Daniels' case, according to the settlement.
In addition to the federal claim of double-dipping, the Miami-Dade agency accused Edward Daniel of the same thing in March 2017.
For example, Daniel accepted $650 per month from the housing agency and $652 per month from the Hialeah agency from September 2015 to March 2016 for an apartment at 2120 SW First St., according to a housing agency letter.
Spuches has a different explanation for the charges.
There was a lag period between the housing authority subsidizing a previous tenant and updating its records, resulting in two housing authorities depositing money with the Daniels. Eventually, the housing authority that subsidized the previous tenant automatically took out the money it deposited during the lag time to the Daniels.
“It's not the best system in the world, but that's the system. So if you were to look at it as a shot in time, you would say, 'Hey, they are double-dipping.' But if you look at it over the period for like a year, you would say, 'Oh, all the money got taken out of their account again,' ” Spuches said.
Federal authorities in their Aug. 15 announcement of the settlement said the double-dipping payments were recouped during the investigation and Daniel told authorities he repaid some tenants.
The Miami-Dade housing agency in March 2017 stopped new subsidy agreements with the Daniels, citing the double-dipping, although it continued subsidizing existing tenants.
In consideration “ to residents who were in apartments at that point in time, we were not going to burden them with the requirement of forcing them to move. That would be counterproductive,” said director Michael Liu.
Spuches said he hopes Miami-Dade will lift the ban now that the investigation is finished, adding it hurts those who need affordable housing.
In Miami-Dade, 61 percent of renters spend more than 30 percent of their income, the longtime affordability gauge, on rent and utilities, according to January data from Florida International University's Metropolitan Center research institute. About 34 percent of renters are severely cost burdened, spending more than half of their income on housing.
Daniel's buildings with Section 8 rentals are at 100 NW 16th Ave.; 1235 SW Seventh St.; 1923 SW Second St.; 2120 and 2154 SW First St.; 2900, 2940, 2960, 2970, 2976 W. Flagler St.; and 823 and 831 SW Fourth St.
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