Rental scams in South Bend linked to out-of-state company SFR3
SOUTH BEND — At the start of this year, Kayli Miller and her husband, Aaron Smith, moved into a house on the southeast side that seemed almost impossibly ideal.
The couple had longed to raise their four children somewhere other than the long-troubled Miami Hills Apartments, a public housing complex for low-income renters. The family lived there until February, when Kayli found what seemed like an escape hatch: a Facebook listing for a newly remodeled two-story home at 214 E. Irvington Ave.
The proposed rent of just $800 a month seemed hard to beat. Miller reached out to a man who had made the listing under the name Travis Ford. He provided a code to a lockbox on the door so the couple could let themselves in and tour the space. They signed a digital lease that same day, sending the man $1,600 to cover the first month’s rent and a security deposit.
Better Business Bureau:Rental scams prey on overwhelmed movers
Days before this Christmas, however, the couple and their five children — including a daughter born in late September — found themselves living in a spare room at a friend’s house, jammed together in only two beds. They’re paying to keep nearly everything they own in storage. Christmas presents for the kids are a fantasy.
Over the course of multiple eviction hearings this year, the family learned that they’d fallen victim to an unusual housing scam and would be forced to leave their new home at the end of November by the property’s rightful owner, a New York-based real estate investment firm using variations of the name SFR3.
Travis Ford, according to St. Joseph County Judge Eric Tamashasky, appears to be a “charlatan.” He somehow obtained the code to the lockbox and posed on Facebook as the property’s rightful owner. Then he stopped answering the family’s calls and messages.
“You became the victim of somebody from Facebook who rented a place they didn’t have the right to rent,” Tamashasky told Miller during an Oct. 30 eviction hearing. SFR3 “became the victim of this person from Facebook because now they’ve got a person who they didn’t rent to in their rental.”
Advocates say owner bears some responsibility
According to local tenants’ rights advocates and news reports from other cities, the family isn’t alone.
Several other St. Joseph County tenants in SFR3’s properties have noted a similar pattern, advocates say. The South Bend Housing Authority began alerting tenants to a scam, said Lori Wallace, who manages the Housing Choice Voucher program. And more than two dozen of SFR3’s many eviction filings in St. Joseph County this year listed “unknown occupants” as the defendant, which typically signaled that someone might be unlawfully living in the home.
Advocates dispute the judge’s notion that SFR3, which owns about 250 homes in St. Joseph County, bears no responsibility for allowing the scam to occur under its watch.
Indiana law requires landlords to employ a property manager and a registered business agent who is actually in Indiana. SFR3’s main property manager, American Avenue Property Management, is headquartered in New York.
But the Indiana Secretary of State’s business registry shows that American Avenue meets the in-state requirement by paying an annual fee to a firm called Indiana Registered Agent. The firm’s stated purpose is to allow out-of-state businesses to operate in Indiana by registering at its Fort Wayne office.
During eviction hearings, a representative from American Avenue always appeared via telephone on behalf of the landlord. Most local property managers show up in person, often with an attorney, to make their case.
The firm’s local attorney, Bruce Huntington, made clear that he had not visited the properties before filing to evict the tenants.
Representatives from American Avenue and SFR3 are “not in the state. They’re not really on the ground talking with whoever’s there. They’re not talking with their attorney in person in any way,” said Katherine Wines, a legal navigator for Pro Bono Indiana who has watched hundreds of eviction hearings this year. “I feel like their knowledge is kind of abstract.”
Darwin Homes, the firm SFR3 originally hired to manage properties like the house on Irvington, followed a similar arrangement. Though it’s headquartered in Texas, Darwin lists its registered business agent as Vcorp LLC, a firm that holds an Indianapolis address.
SFR3 parted ways with Darwin Homes this spring. A similar scam involving both companies was reported this February by the Kansas City Star, and tenants in Peoria, Ill., were outraged to have received notices to vacate from Darwin late last year.
The scam seems directly related to Darwin’s policy of allowing prospective tenants to tour properties on their own using a one-time access code. Though the company boasts that…
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