Kenwood landlord allegedly falls short of court-ordered repair requirements

Kenwood landlord Oron Zarum is coming under fire for not following through with necessary repairs for the complex, three years after being ordered by a court to do so.

While Apex Chicago IL, an LLC registered to Brooklyn-based Zarum, is still technically overseeing repairs at the Ellis Lakeview Apartments at 4624 South Ellis Avenue in Chicago’s Kenwood neighborhood, residents and officials claim the landlord hasn’t been following through, Block Club Chicago reported.

In 2020 residents demanded Apex resolve a number of problems, including code violations, and even requested a receiver be appointed to make sure it happened. Ultimately Cook County Judge Lisa Ann Marino left Apex in charge, but ordered the company to replace its struggling property manager with 5T Management.

Despite the court’s orders, Apex is still not following the terms of its agreement with 5T. Court filings show Apex was $555,000 behind on payment only three months after signing the agreement and ordered 5T to stop work on the repairs it had already begun.

While residents are pushing for a receiver to be appointed due to Apex’s struggles to replenish repair funds, an attorney for Freddie Mac, which holds the mortgage against the apartment complex, said the agency wants a seat at the table to help resolve the issues.

The city had requested the court appoint a receiver to the property before asking a ruling on that motion to be put on hold. Freddie Mac noted a receiver could jeopardize its financial interests and wants to work toward a solution without one at first. The agency hadn’t weighed in on the case over its previous two years.

Apex made a deposit into a repair account that must be kept at $350,000 just hours before a court hearing Wednesday, after it had dropped as low as $1,500 previously, fulfilling a requirement that, left unmet, could give the court the option to appoint a receiver to control the property.

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An attorney for Apex said the company made a “business decision” and stopped funding the repair account for a while because higher-ups were taking issue with the amount of money 5T was spending on repairs and wanted to investigate.

That business decision is in direct violation of Apex’s agreement with the court. In order for Apex to keep the property and not have to hand it over to a receiver, the company is required to keep at least $350,000 in the repair fund for 5T to make the necessary fixes. That fund dropped to $1,500 earlier this month, forcing 5T to stop working.

“It’s really beyond [the Department of Housing and Urban Development] to understand why we’re still here today, dickering over a management agreement, [when 5T has proven it can meet the building’s needs when Apex properly funds them]” Dan Burke, the regional multifamily housing director for HUD, told the outlet.

City attorney Steven McKenzie planned to take the case back to court to resume his push for the judge to grant a receiver, but hours before a hearing could happen, Apex fully funded the repair account and agreed to extend its contract with 5T through March.

“The city is asking to not have a ruling on this motion now. They’re asking to continue it because the situation has changed,” Judge Marino said. “Albeit, as frustrating as it is, facts have changed.”

— Victoria Pruitt