In 2020, Tonnett Hammond was getting increasingly anxious about not being able to reach her new landlords. By then, the post office had stopped delivering mail because of broken mailboxes at the 11-story apartment building known as Ellis Lakeview Apartments and conditions were worsening. Trash began accumulating in the hallway, roaches were colonizing apartments, and sewage backups were damaging carpets and furniture.

“Management completely abandoned the building,” Hammond said. “So when management is not available, who do you call?”

Like Hammond, many of the low-income tenants in the 105-unit building had landed subsidized apartments after years — even a decade — on waiting lists. Hammond waited for two years, during which she and her son slept on the couches of friends and relatives.

In 2018, she got a call about an available, two-bedroom unit on the sixth floor of a mid-rise building in Kenwood, less than a mile north of former President Barack Obama’s house. The first time she visited her new home, she stepped inside hesitantly and discovered a dreamy view of the downtown skyline.

“I didn’t want anything else,” Hammond, 35, said. “I loved it.”

Hammond said she doesn’t remember having much trouble her first year. The elevators worked, maintenance requests were addressed, and the management office was staffed. She began to notice the difference after Apex Chicago IL bought the building in July 2019. At first, she tried calling the new number she was given to figure out what was going on, but her inquiries went to voicemail and she got no responses. She turned to two young tenant advocates who had been checking in on renters during the Covid-19 pandemic and had connected with a neighbor.

The tenants called for a building-wide meeting in summer 2020. It was in the building’s laundry room, where tenants had historically gathered to share grievances. Hammond said she wasn’t sure how many would show up, but when about a third of the building turned out, she said she felt a sense of belonging.

They began meeting regularly to strategize on how to get through the local and federal bureaucracies that oversee subsidized housing. The tenant advocates worked for the Tenant Education Network, a nonprofit formed to train and support tenant associations in subsidized buildings. As part of their work, they connected them with pro bono attorneys and created a protocol to report and document maintenance issues.

As time went on, the advocates and the attorneys asked tenants to consider suing their landlords as part of a class action lawsuit, meaning they’d sue as a group, rather than individually. Hammond was hesitant. She said she understood the suit could potentially lead to tenants being compensated for their suffering but was suspicious. She also said she worried about the potential negative consequences of a suit.

“Everybody was so afraid of retaliation,” Hammond said.

Class action suits against landlords for building conditions are rare. In the case of Ellis Lakeview, it was part of a larger strategy that included pushing the city and federal authorities to step in. The class action was seen as a way to demand accountability from landlords who often don’t acknowledge how poor building conditions harm tenants. Advocates and experts interviewed by Injustice Watch said the multipoint strategy was impressive. It showed the amount of work required for tenants to take on their landlords and why it is an uphill battle for them without the help of advocates. Still, it could pave the way for similar actions against recalcitrant landlords.

Attorneys for the Ellis Lakeview tenants said they found just half a dozen examples of class action suits nationwide, including in Minneapolis, where one of the city’s largest landlords settled for $18.5 million, and in New Haven, Connecticut, where landlords settled another case for $18.75 million.

But these suits are difficult because unlike issues with security deposits or tenants being exposed to lead paint, lawyers have to prove the maintenance issues impacting tenants in different units at different times have affected a large number of them in a similar way. Further, some of the cases deal with landlords who buy buildings under layers of companies the tenant attorneys have to prove are all connected.

In fall 2020, a woman who said she was the property manager at Ellis Lakeview showed up unannounced at one of the tenant meetings. Tenants debated what to do and decided to use the opportunity to voice their list of concerns, including low water pressure, leaks and flooding, mold, rats and roaches, and needed repairs on everything from doors to elevators to mailboxes. The manager promised the issues would be resolved and even set deadlines, which were never met, according notes from the meetings and tenant advocates.

The tenants then sent a 28-page report with photos documenting building problems to the U.S. Department of Housing and Urban Development, the federal agency known as HUD, which subsidizes their rent. As part of the deal with HUD, families paid 30% of their income in rent and utilities and the rest — about $120,000 per month for all 105 apartments — was paid by HUD to the owner. A few weeks later, tenants began to see workers in the building, but in some cases, they were making things worse.

Hammond said they tore up a wall in her bathroom to fix plumbing issues and left the debris inside her tub. They didn’t return for a week, which Hammond said forced her to rely on friends for showers.

“It’s embarrassing,” Hammond said, adding she sometimes got a hotel room, so she could shower without telling anyone.

The following month, Block Club Chicago made the tenants’ ordeal public, detailing the building’s failed inspections and substandard conditions exacerbated by the pandemic. In response to pressure from tenants, the city enrolled Ellis Lakeview in its Troubled Buildings Initiative. But the issues didn’t improve.

By the end of the year, the building had failed 13 inspections and racked up 45 code violations.

Navigating the corporate maze

It’s difficult to establish who bears responsibility for a building, in large part because landlords often buy properties through limited liability corporations nested within layers of other companies, creating a dizzying web of names and connections often used to help protect owners from legal risk.

On paper, Apex Chicago, which bought Hammond’s building in 2019, was managed by Oron Zarum, an out-of-state investor who also was the president of a pair of affordable housing nonprofits based in New Jersey with buildings in various states. When the residents went to HUD and the agency investigated, it connected Zarum to a New Jersey businessman named Aron Puretz.

The agency uncovered an extensive business relationship between the two stretching beyond Ellis Lakeview. HUD officials asserted it was Puretz who actually controlled Apex Chicago. It also found Puretz and his brother, Chaim Puretz, controlled the management company hired to run Ellis Lakeview. HUD said the company, Integra Affordable Management, had received “below average” ratings for its maintenance of Ellis Lakeview and other properties with HUD contracts.

One more name surfaced in court records.

Boruch “Barry” Drillman, a New York real estate investor, claimed in a 2022 written sworn statement to be the primary owner of Apex Chicago. The admission resurfaced last year, when Drillman pleaded guilty to defrauding lenders to obtain more than $165 million in loans to buy an apartment building in Ohio and an industrial complex in Michigan. Federal authorities said he worked with four people, including Aron Puretz and his son.

Drillman was the first to fall.

Then, earlier this summer, Aron Puretz pleaded guilty for his part in the mortgage fraud scheme, which included buying properties and reselling them to Drillman or other associates at an inflated price. In at least one instance, Puretz used a stolen identity to flip a property, court records show.

His son, Eli Puretz, pleaded guilty on Aug. 1. He is scheduled to be sentenced in December.

Meanwhile, Chaim Puretz, who’s denied in court any connection to Ellis Lakeview, is facing corruption charges in Indiana. He has pleaded not guilty and is set for trial in October.

In addition to financial fraud, the Puretzs, Drillman, and Zarum are also accused in various states of letting their properties deteriorate, putting residents at risk.

In Ohio, Drillman is facing a $19 million fine for violating the state’s asbestos regulations. He’s also been accused by authorities there of not addressing serious building code violations. In 2022, Drillman said his management company was to blame.

In Indiana, Zarum and his nonprofits faced local and state suits for letting properties fall into egregious disrepair, “endangering the health, safety, and welfare of thousands of residents.” The suits were settled when Zarum agreed to sell the nonprofits’ buildings and submit to a seven-year ban from owning, leasing, or managing buildings in Indiana.

One of the nonprofits, JPC Charities, has also been in the spotlight since federal authorities said this year it was created and managed by Puretz “for the purpose of receiving tax-exempt status for properties.”

Closer to Chicago, Zarum’s nonprofits shared board members with a failed business venture that gobbled up dozens of buildings in the city’s South Side and let them deteriorate. Separately, the Puretz brothers’ management company was sued in 2021 over its alleged mismanagement of a Waukegan apartment building, which led to conditions the local mayor said were “inhumane.” As part of a court settlement, the building was sold last year.

Zarum did not respond to requests to comment. The attorneys representing Drillman, Eli Puretz, and Aron Puretz, who is scheduled to be sentenced in October, also did not respond to requests to comment. Chaim Puretz’s attorney said neither she nor her client had a comment.

‘Enough is enough’

Back in 2021, the fraud scheme and connections between Zarum, Drillman, and the Puretzes was still unknown to the Ellis Lakeview residents. At the time, Hammond said she was laser focused on improving building conditions and pushing for new owners, and she said their best shot was to get the city to sue their landlords for their failure to address code violations.

In February 2021, city inspectors returned to Ellis Lakeview and found apartments so cold tenants were using stoves as a heat source. Two days later, they went back and found issues with the buildings’ ceilings, windows and doors, and “very low hot water pressure” — a health violation.

“Enough is enough,” Hammond told reporters at an early March press conference urging the city to act.

A few weeks later, the city filed a suit in housing court against Apex Chicago.

Some tenants said they felt hopeful conditions would finally improve. They wanted it fixed because they knew, based on their experiences and reports on the city’s affordable housing deficit, it could take them years to find a new home. To ensure they had a seat at the table, they asked Cook County Circuit Court Judge Lisa Ann Marino, one of three judges handling the bulk of cases in housing court, to allow their tenant association to join the city’s suit. The city supported their request to intervene, but they faced an uphill battle, with their landlords arguing through their attorneys in court the association had no right to intervene and calling into question whether it actually represented the interest of all tenants.

It took nine months for Marino to grant their request. There were so many issues with the building during those months the judge had begun writing very specific orders, such as requiring a leaking toilet to be fixed in a second-floor apartment, loose and exposed wires to be abated in a fourth-floor unit, and for a clogged bathtub on the 11th floor to be repaired. When orders were ignored, the judge asked the city to keep a tab. The list of orders grew so large the judge attended one of the city’s inspections.

Hammond remembers being elated. She and her neighbors had gotten the attention of city and federal officials. But even more indicative of their growing success was getting a visit from a judge.

“She went floor to floor,” Hammond said. “I couldn’t believe it.”

Still, the case lingered. Tenants attended every virtual hearing and could be seen in their apartments, sometimes cooking or baking, as Marino evaluated old and new violations. After a year of court hearings with no significant improvement on the horizon, the city asked the judge to appoint a receiver — a third-party company to fix the code violations and manage the building under the court’s supervision.

“Defendants have failed to correct, after due notice, these unsafe and/or unhealthy building conditions, and the premises remains a danger and nuisance to the community and the public,” the city argued in a court filing.

Joshua Kahane, Apex Chicago’s attorney, argued the building didn’t need a receiver because his clients had “made substantial progress” to remediate code violations. Further, he argued, a receiver would take away the company’s property, which is “the most dramatic and severe action the court can take.”

“Few rights are as fundamental and deeply rooted in our system of laws and common values as the right to own, hold, use, and enjoy property,” he wrote.

“Josh Kahane is my arch nemesis,” Hammond said.

The tenant association and HUD supported the city’s request for a receiver, but Marino didn’t immediately make a decision. She had a three-day virtual hearing and listened to testimony from inspectors, a firefighter, the proposed receiver, and tenants. Then-Ald. Sophia King, whose 4th Ward includes Ellis Lakeview, appeared at the first Zoom hearing. She tried to speak up on behalf of the tenants, but Kahane cut her off by telling the judge she wasn’t formally called as a witness by the city attorneys.

“So, Ald. King, perhaps now is not the time,” Marino said. “We do appreciate you being here, but we need to proceed with the matters in the case.”

Though King didn’t speak at the first hearing, Marino allowed a representative from her office and Illinois State Sen. Robert Peters to provide testimony the following day — over Kahane’s objections.

“Obviously this is — this is a community matter,” Marino told Kahane.

When it was Kahane’s turn to question the senator, he asked whether he knew about the investments his clients had made in the property and whether he knew tenants had denied workers access to their units.

“Gonna object to the question,” said a city attorney.

It wasn’t the first time Kahane attempted to blame the tenants for the building conditions. When a tenant took the witness stand, he asked her whether pest control services were delayed because her “unit was in such disarray” they couldn’t treat it.

“I don’t know anything about that,” said Karen Harrison, who lived on the sixth floor.

He also asked whether she had denied workers access to her unit. Harrison said it happened once, when maintenance workers tried to repair a hole without a permit.

“I have a daughter with respiratory issues, so I cannot let someone that does not know what they are doing come and open up my wall and play with it. I need professionals,” Harrison said.

Kahane then asked, “When was the last time you paid rent?”

“Objection; relevance,” said an attorney.

But Kahane pushed through, arguing there “are mutual responsibilities between a landlord and a tenant.”

Harrison said she couldn’t pay rent because her landlords hadn’t told her how much to pay.

At the end of the second day’s hearing, Marino questioned city attorney Steven McKenzie on the city’s plan for the receiver. McKenzie said the company would take over until repairs to address code violations were completed. He estimated it would take less than a year. The goal, he said, was to turn the building back over to the owners in a condition “far better off than it has been,” so they can “hopefully maintain it.”

Marino then suggested Apex Chicago hire a new management company instead of hiring a court-appointed receiver. Kahane said he had to ask his clients. A HUD attorney jumped in to say HUD had already asked, and Apex Chicago had refused.

Others were open to the idea but stressed they wanted to work with a responsible owner. The residents, who had been observing the hearing, unmuted themselves.

They said they didn’t want a new building manager employed by Apex Chicago. They wanted a building manager who would be independent and answerable to the court — or better yet a new owner.

“I don’t understand why we’re giving them so many chances,” Harrison said. “I’m tired. We’re all tired. It just makes no sense to keep on giving a chance, after chance after chance and extending this. I want to feel safe where I live.”

Marino said she understood the frustration, but there was a “process that must be followed,” and she was trying to get to the “quickest resolution.” She urged the parties to come to an agreement. They did. As part of the deal, the city withdrew its request for a receiver the following month. In exchange, Apex Chicago hired a new management company and set up a repairs fund.

Tenants file a class action

After the new management company was hired, the idea of a class action suit solidified.

As time went on, Hammond realized the attorneys and tenant advocates kept showing up ready to make calls or help them file complaints. In summer 2022, she signed the documents to be the named plaintiff at the top of the class action suit.

“I did it for the cause because all it takes is one person to be an example,” Hammond said. She later added, “I feel like too many of these slumlords get away with playing the system, making millions — billions.”

Two of her neighbors also agreed to be named in the suit and within weeks, their attorneys filed the class action suit against their landlords with the goal of obtaining compensation for all the Ellis Lakeview tenants’ pain and suffering since Apex Chicago took over the building. Hammond said it felt empowering not to be the only one whose name was on the line demanding accountability.

In the suit, the tenants accused their landlords of negligence by failing to maintain the building and track maintenance requests and of violating a local ordinance requiring landlords comply with building codes and “promptly” make repairs. They also claimed their rights as consumers had been trampled, and their landlords had “collectively engaged in unlawful and unfair business practices,” causing them to suffer in deplorable living conditions for nearly three years.

They underscored how they had suffered, even though Apex Chicago had bought a building under contract with HUD to provide safe and decent housing to low-income families.

To them, their landlords’ business model seemed to hinge on extracting rent funds while letting the building deteriorate. As proof of the strategy, known as “milking,” they pointed in court documents to their landlord’s shell companies, which insulated them from liability. The shells, they said, included a “sham” management company with no one to answer the maintenance line and no on-site building management for several months in 2020 and 2022.

The tenants argued in the lawsuit that the landlords knew the issues existed and ignored them. Separately, the building had also failed HUD inspections, and the agency had issued a $702,000 fine in 2022 for an array of issues — from peeling cabinets to mice droppings to damaged windows.

Besides the Ellis Lakeview tenants, there are at least two other groups of tenants in Cook County currently suing their landlords collectively over unhealthy and unsafe building conditions. The largest group is suing Pangea, a company that once owned 426 buildings with some 7,500 rental units in Chicago. It filed more eviction cases than any other landlord in the city.

Pangea has denied the plaintiff’s allegations in court. In an email, Peter Martay, Pangea’s CEO, told Injustice Watch the company “sold the properties in December of 2022. We have no further comment.”

The other class action case was filed by the tenants of Sargon Isaac, who owns properties on the Far North Side of Chicago and in South Evanston. The tenants allege not just bad building management and retaliatory evictions for complaints about conditions, but in one instance, even the beating and rape of a tenant by men who allegedly told her to “thank Sargon,” according to court documents.

Isaac has not responded to the tenants’ allegations in court, and his attorney did not respond to multiple requests for comment. But in an April court filing, the attorney reported “the parties have actively engaged in meaningful settlement discussions.”

Traditionally, class action suits stem from a harmful event, such as a case of asbestos exposure during building demolition or from a deficient product, such as a faulty part in a specific car.

Consumers can also sue collectively for unlawful practices, such as social media companies collecting users’ biometric information without their permission. However, building a successful class action case against a landlord is tricky because the allegations might involve many actions, sometimes by many people, over a long period of time at varying locations. Also, tenants at different units and buildings might be affected in varying ways.

Still, unlike an individual tenant’s personal injury suit, these cases carry the possibility of wide-ranging accountability and sanctions for a landlord because judges can order them to pay out sums with significant impact to their bottom lines and order them to change how they run their businesses.

Most famously, a tenant class action suit alleging racial discrimination by the Chicago Housing Authority and HUD in 1966 went all the way to the U.S. Supreme Court and resulted in the fundamental reshaping of public housing administration in Chicago that reverberates to this day.

Attorneys at a large local law firm said the Ellis Lakeview tenants’ organizing efforts and intervention in the housing court case convinced them they stood a chance to succeed with a class action against the building’s owners.

“If it comes down to having to prove up facts of the condition of the building at different times, we got the receipts — we got the facts,” said Elizabeth Mazur, one of the attorneys representing the Ellis Lakeview tenants.

It also helped, she said, that the potential class of plaintiffs would be a small group of people living at a single property.

Class action suits often target large, financially healthy companies. Lawyers who bring these suits on behalf of the class can be motivated by the hefty share of the eventual settlement or judgment they stand to receive. But any eventual compensation for the Ellis Lakeview tenants and fees to their lawyers will hinge on whether Apex Chicago and the people behind the company — two of whom now face federal prison time — will have any money left to pay out.

“The more we learn, the more it seems like this was a real criminal enterprise,” Mazur said. “And I imagine there’s some satisfaction in that being exposed. But I don’t know where that leaves the people who were harmed in terms of getting any sort of financial compensation.”

As the case crawls along the procedural obstacle course inherent to class actions, progress is further slowed because Apex Chicago and its representatives haven’t behaved like typical defendants, waiting until the very last minute to respond to routine motions, refusing to answer even basic questions, or not showing up to court at all.

Last year, the attorney representing Apex Chicago and Integra, the management company, withdrew from the case citing a “breakdown in communication” with his clients, delaying the process further.

The case against Ellis Lakeview could drag on for years. It took tenants in Minneapolis two years to reach a settlement; in New Haven, they waited more than three years to settle — and another four years after that for everyone to get paid. And the Ellis Lakeview tenants could lose, of course, if Apex Chicago convinces the judge there’s no basis for the suit, or that Hammond and her neighbors don’t belong together in a class.

Mortgage giant takes over

Building conditions at Ellis Lakeview improved after the new management company took over in summer 2022, but repairs soon stalled because Apex Chicago stopped paying for them. At the beginning of 2023, the city again asked the court to appoint a receiver. The following month, it withdrew its request. The tenants said they were frustrated with the city, but they and the tenant advocates found a new pressure point. When Apex Chicago bought Ellis Lakeview, it had taken a $11 million mortgage from the Federal Home Loan Mortgage Corp., the mortgage finance giant better known as Freddie Mac.

The tenants argued Freddie Mac, as a government-controlled mortgage lender, had a responsibility to ensure properties were maintained. And they urged the agency to take a stand. It did so in April 2023, sounding an alarm about the stalled progress at the building and “Apex’s refusal to authorize and fund identified repairs.”

At a hearing the next month, Marino said it was “extremely disheartening” to hear about the issues at the property. Kahane told the judge not to be so disheartened because everything that was said about his client was “simply not true.”

Asked for the city’s opinion, McKenzie said he had seen some progress, though he would have liked to have seen “leaps and bounds.” But he signaled optimism. “The city from what it knows has no reason to be alarmed.” McKenzie said.

After listening to all parties, Marino chalked up the issues to lack of communication and encouraged all parties to talk to each other.

A month later, Freddie Mac filed a foreclosure suit. The goal was to get the judge to appoint a foreclosure receiver, a company to take over the property from Apex Chicago until it was ultimately sold. To show the judge the depth of issues, Freddie Mac attached a 43-page report to the suit listing more than $3.4 million in priority repairs — from plumbing and roof problems to replacing windows and modernizing elevators.

It was the third suit filed in Cook County Circuit Court against Apex Chicago for its failure to maintain Ellis Lakeview. All three were pushed by the tenants and the two young tenant advocates Hammond met in 2020.

Since starting their fight, water pressure and hot water had been restored, kitchens and bathrooms had been fixed and repainted, new mailboxes had been installed, the trash buildups were addressed, and entry doors were secured. Perhaps the biggest win for residents was remaining in their homes. Federal authorities typically move to end the federal subsidy against the most problematic landlords, leaving tenants with a rent voucher and a scramble to find a landlord who will accept it.

But their fight wasn’t over.

“What we want to see is this building in the hands of new, responsible owners that are going to invest in a full rehab of the building — both that the building requires and the tenants deserve,” said Lilly Lerner, one of the tenant advocates.

There wasn’t much movement on Freddie Mac’s case the rest of the summer and fall. But in December, the mortgage giant told the court Apex Chicago had essentially abandoned the building and announced one of the landlords had pleaded guilty to federal fraud charges.

After the Christmas break, the judge overseeing the foreclosure suit granted Freddie Mac’s request to appoint a foreclosure receiver. The receiver was ordered to hire a management company and begin making repairs under court supervision to resolve code violations. To pay for the repairs, it would first exhaust rents and then ask Freddie Mac for more funds. Any additional funds needed would be added to the tab Apex Chicago owed to Freddie Mac.

“Oh, my God — we did that!” a tenant said at an association meeting after the court hearing.

“It’s about time,” said another tenant before the conversation moved to issues still pending, including broken laundry machines, roof leaks, and insufficient heat.

The foreclosure receiver confirmed the tenant’s list of pending repairs. The company said in court records Ellis Lakeview had “significant deferred maintenance.” It wasn’t lost on tenants the company had been under the watchful eye of Marino in housing court for more than two years.

Under the receiver, a new boiler was installed, and minor repairs were made. By April, the receiver had also received court approval to spend $21,100 to evaluate and modernize the building’s two elevators and an additional $48,504 to upgrade and install new security cameras. But those were small issues, compared to big-ticket items still pending, such as a roof replacement the receiver estimated would cost $500,000.

Hammond said she and her neighbors had high hopes for the receiver, but as of May — about four months after the receiver was appointed — conditions still hadn’t changed much for her. As an example, she pointed to the elevators. One was fixed shortly after the receiver took over, but it was broken again.

“We wasn’t looking for instant gratification, but we thought that things were going to start moving like how they promised,” said Hammond, who by then was dealing with a severe roach infestation. “And it’s not. Everything is still at a stalemate.”

Not all residents agreed with Hammond. Kimberly Marzette, who has lived in the building for more than a decade with her three children, said things were getting better. For example, when the elevator breaks down, the management company actually fixes it. From her perspective, the fight isn’t over. They won a receiver, but now, they must make sure Freddie Mac doesn’t let them down and actually pays for repairs.

“I’m going to fight until I can’t fight no more,” Marzette said. “We deserve better.”

But Hammond said she didn’t have it in her to keep going. Earlier in the year, she quit the tenant union after disagreements with some of her neighbors and the tenant advocates. The receiver also alleged she was behind on rent, which she disputes. She had already been considering moving, and the disagreements solidified her decision.

“I can’t take it anymore,” she said. “I could still follow up with the building, but I can’t stick around to see the change.”

Hammond and her 12-year-old son moved out the weekend of May 11 to a three-story courtyard building about 2 miles south of Ellis Lakeview — past the Obamas’ house and the main campus of the University of Chicago. The move was bittersweet for Hammond. She left behind the community she had formed and her Chicago skyline view for an apartment that also has a history of chronic code violations — though inspectors haven’t clocked any since 2021.

She continues to keep an eye on her former neighbors, as the class action suit inches ahead. Maybe someday it will pay out. But for now, she’s focusing on moving forward.

Thinking about her ordeal and how long it has taken to get meaningful fixes, Hammond said she wishes someone would have come to their rescue sooner.

“But because of the word ‘low-income,’ people ignore a lot of the concerns and issues.”

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