Since the SSI money wouldn’t hit their accounts until the third of each month, the Smiths’ landlord allowed them to avoid late fees as long as they paid rent on or by the fifth. They moved into their new single-family rental home in Garland in 2012. The agreement stuck for seven years, until the summer of 2019 rolled around. In July that year, the landlord started charging the Smiths late fees and refused to let them continue paying rent by the fifth a they had done for the previous seven years. They were eventually told they couldn’t renew their lease and had to find a new place to live.
This is all being taken up by the Department of Justice in a fair housing complaint filed on Feb. 22. The federal complaint alleges that the owners and operators of the rental home — MA Partners 2, Brockbk JV LLC, Dallas Redevelopment Equities LLC, Alden Short Inc. and Sam Matalone — discriminated against the Smiths on the basis of their disability. They did not respond to requests for comment.
MA Partners, a developer that owns properties in Texas and California, owned the rental home and contracted with Alden Short Inc., to manage it. Sam Matalone was an employee working for Alden Short.
Covington-Smith is a person with a disability as defined by the Fair Housing Act. She has several mental and physical impairments including PTSD, high blood pressure and impairments relating to her knees, according to the complaint. These can affect several major life activities like learning, working and walking.
Andre Smith is also a person with a disability defined by the Fair Housing Act. Since 2013, he’s had several physical and mental impairments, such as diabetes, renal failure and high blood pressure. All of these things affected his ability to work and walk.
Since 2009, Covington-Smith has received monthly Supplemental Security Income payments from the U.S. Social Security Administration. These payments would hit her bank account around the third of each month.
Andre Smith has received Social Security Disability Income payments since 2015. He too would get these payments around the third of each month and use the money to pay his rent.
On June 6, 2012, the Smiths filled out an application to rent a single-family home in Garland. At the time, Covington-Smith was getting SSI payments for herself and her minor child, as well as child support. Andre Smith was unemployed and didn’t have any income at the time. Their application was approved and they signed a one-year lease, which expired on June 7, 2013, and was automatically renewed on a month-to-month basis.
The lease terms required rental payments of $1,095 “on or before the first day of each month (the due date) without a grace period,” according to the complaint. The lease agreement said if rent isn't paid in full by the second of each month, a late charge of $50 would be added. Another $10 would be added every day until the rent was paid. The agreement also specified that the rent payments needed to be made in person at Alden Short’s office in Dallas, or sent by mail to that address."If we have to take this to court we can." – Kandre Covington-Smith, tenant
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When she was negotiating the lease in June 2012, Covington-Smith requested an accommodation from the leasing agent. She asked if she could pay the rent on the fifth of the month without incurring any late fees. Covington-Smith said this was necessary because of her reliance on SSI payments. She also asked if she could drop off the rent payment at a closer location because of the difficulties in traveling to Dallas. These accommodations were granted when Covington-Smith signed the lease.
This was the arrangement from June 2012 until the summer of 2019. According to the complaint, records provided to the U.S. Department of Housing and Urban Development (HUD) show that between 2015 and 2019, the Smiths made at least 45 rent payments after the second of the month without being charged a late fee. At least 40 of those payments were paid on or after the fifth of the month, according to the complaint.
Around June 2019, the Smiths were told to start making their payments using an online portal set up by Alden Short. However, they weren’t told that this would affect their accommodation that allowed them to pay rent by the fifth without any late charges.
Covington-Smith tried to pay her rent through the online portal on July 5, 2019, and saw a $70 late fee had been added to her account. She tried making the payment without including the late fee but the portal wouldn’t accept it.
Just before noon that day, she sent a message through the online portal explaining the issue. “I have paid on the fifth of every month for the past seven years due to the fact that I receive supplemental income,” Covington-Smith wrote. “This was known up front and has never been an issue.”
She explained that she would drop off the rent money at Alden Short’s corporate office so it wouldn’t be paid after the fifth. That’s when Matalone responded, saying he had pulled up the lease agreement “and it does state late fees start on the third.”
“The late fees will stand. Please make arrangements to pay the balance,” Matalone wrote.
“We were told that we had to the 5th of every month to make a payment due to I get disability. I have always paid on the 5th. If we have to take this to court we can,” Covington-Smith responded. “Monday, I will be contacting Fair Housing. I know what our lease state[s].”
When Andre Smith went to Alden Short’s Dallas office to drop off the rent, an employee accepted the money but said the late fee would still have to be paid. After Andre Smith left the office, Matalone emailed another employee telling them to issue a non-renewal of lease notice to the family. “This tenant is giving us problems again and being nasty,” Matalone wrote in the email. “Let[’]s get them a nonrenewal letter where they move out 8/31. They have threaten[ed] us before and are coping an attitude [sic].”
Later that afternoon, an Alden Short employee sent a message to the Smiths explaining that the lease agreement said late fees would be incurred after the second of each month.
Three days later, the Smiths got a notice saying their lease wouldn’t be renewable after August 31, 2019. Covington-Smith tried to arrange a meeting with Matalone about the lease termination but was never able to. On July 10, 2019, she filed a housing discrimination complaint with HUD.
“Complainants believe that their reasonable accommodation request was denied and they have suffered additional injuries by being assessed additional fees,” the HUD complaint read in part. “Complainants are ready and able to continue their tenancy with Alden Short, Inc. Complainants believe that in a similar situation those who are not disabled are treated more favorably.”
After the HUD complaint was filed, the Smiths sent a letter to management asking that they reverse the late fees and allow them to carry on with the lease agreement they’ve abided by for seven years. The late fee was reversed in the online portal but the Smiths never got a response to their letter. From July 2019 through January 2020, the Smiths continued living at the property, paying rent on the fifth without any late fees.
During this time, the city of Garland was looking into the HUD complaint. Texas law states that a landlord can’t terminate a tenant’s lease within six months of that tenant filing a complaint that alleges a violation of federal, state or local law. On Jan. 9, 2020, Matalone sent an email to the city of Garland investigator saying he intended to terminate the Smiths’ lease after the six-month period.
The next day, Matalone sent the Smiths a notice saying their lease wouldn’t be renewable and they’d need to leave the property by Feb. 29, 2020. The Smiths didn’t leave. On March 3, 2020, Alden Short sent them a notice to vacate, demanding they leave in six days. When the Smiths didn’t leave, the company filed a petition with the local court for possession of the property. The Smiths vacated the property in April 2020.
On July 1, 2020, Matalone said in an email to HUD that the Smiths’ “aggressive stances” and “ever increasing demands” during the fair housing conciliation process led them to terminate the lease. The Justice Department complaint begs to differ.
“Defendants terminated Complainants’ lease because they had asked to continue to be allowed to pay their rent on the fifth of the month and because they had filed a complaint alleging violations of the Fair Housing Act and attempted to exercise their rights under that statute,” according to the complaint.
"There's a systemic problem that we have in this case." – Derek Avery, COIR Development
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The ordeal left the Smiths with the added burden of moving expenses and increased housing costs, as well as emotional distress. Based on the HUD complaint, it was determined that there’s reasonable cause to believe MA Partners 2, Brockbk JV LLC, Dallas Redevelopment Equities LLC, Alden Short, and Sam Matalone engaged in one or more discriminatory housing practices, in violation of the Fair Housing Act, according to the Justice Department.
The HUD secretary charged the companies and Matalone with engaging in discriminatory housing practices on Sept. 28, 2022. They instead elected to have it taken up in federal district court by the Justice Department, which filed its complaint on Feb. 22, 2023. The complaint calls for a jury trial and for the Smiths to be awarded monetary damages.
Lisa Marshall, CEO of the local group Fighting Homelessness, told the Observer she’s had to negotiate similar arrangements with landlords for clients on SSI or SSDI. Whatever the arrangements, Marshall said landlords in Texas can find a way out of them and discriminate against people they don’t want as tenants.
"There's a systemic problem that we have in this case," Derek Avery, a local housing and homelessness advocate, told the Observer.
"It's called income discrimination," he said. "That's literally what this is." Avery is the CEO of the local real estate development company COIR Development. He is also the former director of landlord engagement for Housing Forward, the lead agency for the homeless response system in Dallas and Collin counties.
"[The landlord] knew that this money was going to come in," Avery said. "What I feel like happened is they wanted to raise the rent and get a different type of tenant in this case. Opposed to just being straightforward and having a conversation with them, they used income as a way to discriminate against this person."
