The office of Arkansas Attorney General Leslie Rutledge on Wednesday filed a lawsuit over alleged violations of the Arkansas Deceptive Trade Practices Act against the owners of a troubled Little Rock apartment complex known as the Big Country Chateau.
During a news conference held at the attorney general's office on Wednesday afternoon, Rutledge showed several photos to illustrate what she described as the "absolutely unimaginable living conditions that residents were exposed to."
Little Rock city officials recently have discussed the apartment complex and possible solutions in the context of an impending shutoff of utility services.
The civil complaint filed in Pulaski County Circuit Court on Wednesday names Big Country Chateau, LLC, as well as associated parent companies Apex Big Chateau AR, LLC and Apex Equity Group, LLC.
According to the complaint, Big Country Chateau, LLC, was registered with the Arkansas secretary of state's office in 2009 by Christopher Carl Schultz but has since been dissolved.
Records of the secretary of state show the company was registered to a Malvern address.
The second company, Apex Big Chateau AR, LLC, was registered in 2019 by Laura Bohan. The secretary of state's office lists its status as "not current" and a Brooklyn, N.Y., location as its principal address.
The third company, Apex Equity Group, LLC, is registered in the state of New York and has conducted business in Arkansas under the Apex Big Chateau AR subsidiary, the complaint says.
The 151 units and 11 buildings at 6200 Colonel Glenn Road are managed and leased by Big Country Chateau and the property is owned by Apex Big Chateau AR, according to the complaint. Tenants at the complex do not pay utility providers directly; instead, their utility costs are included in their monthly payments.
Earlier this summer, water utility Central Arkansas Water and power company Entergy Arkansas informed tenants that water and electricity would be shut off at the Big Country Chateau effective Sept. 1.
"As of the latest invoice dated July 21, 2022, Defendants were so far behind in paying Central Arkansas Water that they owe the water company $222,931.70," the complaint says.
Owners received shutoff notices from a third-party billing company on behalf of Central Arkansas Water as early as December 2019.
A news release from the attorney general's office said owners failed to pay Entergy from March to August and only paid an outstanding balance of approximately $71,000 once the city of Little Rock began investigating.
"Big Country Chateau's defaults were easily concealed from tenants due to the disconnection moratoriums in place during the COVID-19 pandemic," the news release said. "Currently, tenants are facing water utility shutoffs in September despite having paid for their utilities."
Code enforcement officials from the city of Little Rock as well as representatives from other city departments and the attorney general's office inspected the complex on July 27.
After inspecting 149 of 151 units, officials identified 337 life safety violations and 975 other violations, according to an Aug. 4 memo from Kevin Howard, director of the city's Department of Housing and Neighborhood Programs.
"By holding out these units as available for rent, Defendants indicated that these dwelling units met the standards set by both the State of Arkansas and the City of Little Rock," the attorney general's complaint says. "Knowingly renting properties that do not meet these requirements and failing to repair problems throughout the lease term are deceptive and unconscionable trade practices."
Likewise, the owners violated the Deceptive Trade Practices Act when they took money "for the purpose of paying utility bills but failed to pay such bills," the complaint says.
Violations of the Deceptive Trade Practices Act can yield a civil penalty of up to $10,000 each, according to the complaint.
Because there are 151 units at the apartment complex, the state could seek $1.5 million in penalties if there is at least one violation per unit, Rutledge told reporters.
In addition to civil penalties, the lawsuit seeks court orders barring the owners from entering into lease agreements with potential tenants until the code violations are addressed and requiring them to remit payments to utility companies, among other things.
The Big Country Chateau's management could not be reached for comment Wednesday.
Since 2019, the city of Little Rock has been pursuing a case against the apartment complex in environmental court, City Attorney Tom Carpenter said last month.