Under federal scrutiny for allegedly charging excess rent, the private company that manages The Villages at Alton Park and the Oaks at Camden public housing sites has begun notifying residents that it will begin issuing refunds or credits for overcharges going back as long as four years.
Low-income public housing residents at the two locations may have been overcharged an average of $14 a month, according to Pennrose Management Co. The company did not say how many residents were affected, but Alton Park alone has 200 public housing units.
The company blamed the overcharges on clerical error.
"While specific amounts vary for each account, on average the overall monthly rent that was actually charged to public housing residents at The Villages and Oaks at Camden was $164," said Robert Lampher, president of Pennrose. "Upon review and audit of all files, it has been verified that historically the overall monthly rent charge should have been $150."
Lampher met with residents this month about possible rent overcharges after the U.S. Department of Housing and Urban Development ordered the Chattanooga Housing Authority to perform an audit examining rent calculations for all public housing tenants living in the Oaks and Villages. CHA contracts with Pennrose to manage the sites. Pennrose does not manage any other public housing sites in Chattanooga.
Pennrose will meet one-on-one with all residents affected by rent overcharges to review their rental accounts and obtain any needed income verifications, Lampher wrote in an emailed statement.
Residents due a refund will get the option of a rent credit to their account or get direct reimbursement in full, said Lampher.
The refunds and credits come nearly a month after Julie Bucholtz, a former property manager at Pennrose, filed a civil lawsuit accusing the company of overcharging residents by $170,000.
Bucholtz claims she was fired because she reported the information to HUD and the CHA.
"Once senior management at Pennrose learned about the potential concerns at The Villages and The Oaks, we reached out both internally and externally to get the facts straight as quickly as possible," wrote Lampher.
Bucholtz's lawsuit stated that the overcharges were from "illegal rent calculations." She alleges that similar calculations had been done in the past and corrected in 2008 but eventually resumed.
Shirley Collins, president of the Villages at Alton Park resident association, said she's among several residents who have been contacted by Pennrose about the rent overcharges, but she has yet to receive any payment.
"I think I have a lawsuit against them because I never understood how they calculated the rent," said Collins. "I'd like someone to look at my paperwork. My rent has been different every month."