AG sues Cresheim Valley Apartments, claims widespread violations

by Kyle Bagenstose
Posted 7/14/23

A six-count suit filed in the Court of Common Pleas of Philadelphia charges widespread negligence and retaliatory behaviors.

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AG sues Cresheim Valley Apartments, claims widespread violations


Simmering problems at a West Mt. Airy apartment building exploded into public view Thursday when Pennsylvania Attorney General Michelle Henry announced the filing of a civil lawsuit against the owner and management of the Cresheim Valley Apartments, a historic 24-unit building located immediately adjacent to the Richard Allen Lane SEPTA station.

The six-count suit filed in the Court of Common Pleas of Philadelphia charges widespread negligence and retaliatory behaviors by SBG Management Services, the building’s management firm, owner Philip Pulley, and several related entities. Among the many startling allegations are tenants' claims of repeated exposure to raw sewage, mold, rodents, insects, and the elements. Instead of fixing such issues upon notification, the suit claims, the defendants would often leave the issues to fester.

When residents complained to the state Bureau of Consumer Protection, the suit alleges, management even retaliated, charging some tenants $5,000 in legal fees they said were incurred by responding to the complaints.

The Attorney General’s suit claims the defendants committed multiple violations of state and local consumer protection laws and is seeking an injunction to stop the alleged activities, restitution for residents, and civil penalties in excess of $50,000.

The suit also claims similar violations by the defendants at another property, the Lindley Towers apartment building in the city’s Logan neighborhood. That building drew widespread media attention and a lawsuit from the city last year after it partially collapsed in September. 

“This management company neglected the safety and basic human needs of their tenants, then thought they could intimidate those who spoke up by imposing unfair retaliatory fees,” Attorney General Henry said in a prepared statement. “My office will not tolerate landlords who fail to maintain properties and put Pennsylvanians at risk.”

Reached by telephone Friday, a person at SBG Management who did not identify themselves said the company had no comment.

Bugs, mice, mold, and cold

The Attorney General’s complaint paints the picture of a building in West Mt. Airy where nearly everything was going wrong. 

“The tenants allege that they experienced serious and repeated problems with the condition of their apartments, including deteriorating interior and exterior surfaces, rodent and cockroach infestations, broken and unsecured doors and locks, excessive leaks and water damage, and exposure to raw sewage and mold,” the complaint reads. “With their maintenance requests routinely overlooked, the tenants and their families were forced to live with unsafe conditions in the deteriorating buildings—all while ownership and management continued to collect full rent payments, impose punitive fees upon the tenants, and violate prohibitions against illegal, self-help eviction practices.”

One Cresheim Valley resident, the lawsuit claims, complained to management that she found 30 to 40 dead mice and a cockroach infestation upon moving into her apartment. At first, SBG took no corrective action, and despite eventually calling in an exterminator, the problem continued, the suit claims. 

Another resident, a senior citizen, claimed that her heating system had become progressively colder over the more than two decades that she lived in the building due to a lack of maintenance by SBG. At one point, the suit claims, she went “entirely without heat for more than a week during the winter.”

Sewage was also repeatedly a concern. Several tenants reported that sewage would bubble up from their bathtubs, that their water was discolored or odiferous, or that toilets above their units would leak into their apartments. During the reconstruction of front entrance stairs into the building in recent years, tenants also said they had to trudge through standing raw sewage in the basement, where the building’s washers and dryers are also located, on “repeated occasions,” the suit claims.

In total, the suit noted, the Cresheim and Lindley properties together amassed 24 citations and 118 code violations from the Philadelphia Department of Licenses and Inspections since 2020.

In addition to health and maintenance issues, the Attorney General’s lawsuit claims that SBG Management and associated entities had illegally rented units since the lapse of their real estate licenses in 2022. As reported by The Local last year, that appears to have been tied to a lack of lead-safe certifications, with owner Pulley telling a reporter that he was having difficulty securing the necessary inspectors due to labor shortages.

“Unfortunately the guy who conducts the lead testing doesn’t have enough employees,” Pulley said at the time.

But the Attorney General’s suit claims that SBG attached paperwork to its leases titled “Certification of Lead SAFE Status” that included the seal of the city Department of Health but did not include the dates of any actual inspections.

The inclusion of the document had “the capacity to mislead or confuse consumers into believing Defendants possessed the required Lead Certifications for their rental properties,” the suit claims.

Finally, the complaint alleges retaliatory actions by SBG and related entities against several tenants. 

At Cresheim Valley, one resident said they filed a claim with the state Bureau of Consumer Protection regarding persistent chipped paint in their bathtub and heating issues in their unit. After the bureau reached out to SBG last December to try and “amicably” resolve the situation, the tenant was in January assessed a $5,000 charge by the company, with an online notice claiming it was for “Legal Expenses – Retainer for services. Rcvd letter from Atty General.”

When another resident filed a complaint in December 2022 for animal infestation, exposure to sewage, and management’s failure to provide her with a valid Lead Certification, SBG and related entities similarly levied a $5,000 fee for legal expenses, the suit claims.

The totality of these issues violated Consumer Protection laws on at least six counts, the suit claimed.

The suit seeks full restitution of all individuals illegally charged, and to prevent SBG and related entities from collecting any additional rent monies until all licenses and certifications are correctly obtained. The Attorney General's office also seeks $1,000 in penalties for “each and every violation of the Consumer Protection Law,”  or $3,000 for every violation in which the victim is sixty years of age or older.

A spokesperson for the Attorney General’s office said it was unable to predict a timeline for when a rent-hold could potentially go into effect, but the complaint notes the defendants have 20 days to respond or could face a default judgment.

A growing problem

Officers of community organization West Mount Airy Neighbors say the Attorney General’s suit is the highest profile event in growing tensions between the tenants and owners of some apartment buildings in the area.

Problems at the Cresheim Valley building had been known for some time, resulting in tenants organizing both in and outside the building. A few “brave” residents took the initiative to organize the complaints of their neighbors and take them to the state offices, said Josephine Gasiewski Winter, executive director of WMAN. Meanwhile, her organization held a community meeting on tenants’ rights at Grace Baptist Church this May.

The organization views tenants' rights, especially in buildings with significant management issues, as a “fundamental part of its mission,” at this point, Winter added.

“It’s a pretty pressing issue in our community,” Winter said.

Morrie Zimmerman, vice president of physical resources for WMAN and leader of subcommittee efforts on tenants, development, and other neighborhood transition topics, said the organization has started hearing similar complaints from residents of numerous buildings in the area and believes SBG in particular drew attention after the Lindley collapse in Logan.

Anecdotally, Zimmerman said, it seemed to him that a number of larger, older buildings in Mt. Airy had been sold in the past half-decade or so to owners who are both difficult to reach and seemingly willing to let the buildings fall into disrepair. For those types of situations, he finds resident organization is key.

“We find a lot more ability to deal with that particular type of landlord if there’s a lot more people talking,” Zimmerman said.

But, Zimmerman said he is still taking a decidedly non-judgemental approach to the overall tensions and seeks to increase communication between building owners and residents, as well as new developers and near neighbors. That, he hopes, is the key to ensuring Mt. Airy is a community that remains welcoming to all.

“We’re trying to reach out to both sides…  We’re really trying to get people to talk and not point fingers,” Zimmerman said.