COVINGTON — Liens have been filed against five homes purchased through Newton County’s Neighborhood Stabilization Program, preventing the homes from being transferred to Habitat for Humanity as planned by the county and from being sold.
Ken Colado of Properties of the Southeast, claims he was not paid by IECDG, the asset manager of the program, for work he did for the company. He has filed liens against five homes amounting to $75,000 on homes at 370 Crestfield Circle, 75 Chandler Trace, 45 Trelawney Ave., 455 Freeman Drive and 418 Smith Store Road.
County Attorney Tommy Craig said the liens prevent the homes from being transferred from IECDG to Habitat for Humanity.
An agreement approved by the Board of Commissioners Aug. 7 gives Habitat the authority to acquire the foreclosed single family units located within the NSP service area from IECDG and sell the properties to qualified owners at no profit. The county opted to turn homes over to Habitat because the organization is better equipped to find families that meet income requirements for NSP, Scott Sirotkin, director of the Department of Development Services, said at the time.
Craig said disbursements of NSP funds were approved by the Department of Community Affairs, work was performed on the houses and inspected by the county. If IECDG did not use the funds disbursed for rehabilitation, “It would appear the funds may not have been applied properly,” Craig said. Craig said he has requested a meeting with the man’s attorney in hopes of resolving the liens. There is apparently dispute over whether Colado was a contractor or an employee of IECDG, but at some point he parted ways with IECDG, according to Jenny Carter, an attorney with the County Attorney’s Office.
Counties are required to have committed or encumbered NSP funds by March 2013 or else turn the money back over to the government. That deadline has already been met by Newton County, as all funds are committed or encumbered. Once the March deadline is passed, the county will be notified of how long it has to complete the program, which Craig said will likely be years.
When commissioners first discussed participating in NSP in late 2008, “My advice was for the county to stay out of the real estate business. My contention was and still is we don’t have the experience or expertise or personnel with proper training to address the issues that all of this process creates. I think in retrospect I was right, we should have stayed out of this,” Craig said.
The most recent Grand Jury, which investigated the process and expenditures related to the Cook Road resurfacing project, also recommended that the next Grand Jury investigate NSP.
The county initially contracted with IECDG because the only way the county can sell property it owns is by sealed bid or by auction on the courthouse steps, said Carter. In the case of NSP, the homes had to be sold to individuals who meet income and other specific requirements.
“The county couldn’t own the homes and carry out the purpose of the grant. There needed to be an asset manager,” Carter explained.
She said the county, through the NSP grant, paid for the work done to rehab the homes; the issue is whether IECDG owes money to the contractor/employee. Two NSP homes without liens have been transferred to Habitat for Humanity.
“Our role was to see the work was done and the money got paid out. The work was done and DCA reviewed it as well,” Carter said.
The county has acquired a total of 12 homes through NSP — five are owner-occupied, two have been transferred to Habitat and five have liens filed against them — and the Fairview Community Park in Fairview Estates was built using NSP funds.
The Citizen has requested that DCA provide documents related to its monitoring of Newton’s NSP. DCA Director Glenn Misner said DCA has been monitoring the program and is aware of the liens.
“We’re concerned of course that this lien situation has come up. Hopefully the attorneys will get that sorted out,” he said, adding that, “We certainly don’t want to have any disallowed expenses for Newton Couty that we would have to call back money for.”
He said the NSP “ultimately brought Fairview Estates back from the brink” with the public park there.