Renter says she was forced to pay a legal bill to get federal rent assistance

Utah says checks from the Emergency Rental Assistance fund are better off going to landlords rather than renters directly.

The following story was funded with support from The Economic Hardship Reporting Project and was reported by The Utah Investigative Journalism Project in partnership with The Salt Lake Tribune.

When Ivey O’Neill moved into the Garden Lofts apartments, everything seemed perfect. Right in downtown Salt Lake City, it was close to everything and the unit had a nice double master bed, which meant her 4-year-old could have his own room for his nerf guns and his many toy cars.

Life was good — until it wasn’t. O’Neill was the victim of a domestic violence incident in the summer of 2022 that ended with the police getting involved. While removing her partner from the picture was good for O’Neill’s safety, she now wasn’t getting enough financial support to pay the rent.

She needed to get a better-paying job. But in the meantime, she needed a lifeline. So she worked with her apartment to apply for Emergency Rental Assistance (ERA). The federal fund was established during the pandemic and appropriated $46 billion to be distributed to states, counties and cities to help keep renters in stable housing as the economy recovered from the global health emergency.

As of Dec. 31, 2022, the state — including city and county partners — had disbursed $176.8 million in ERA funds and $110 million funds from in the second wave of federal support known as Emergency Rental Assistance 2 (ERA2), according to records obtained from Department of Workforce Services (DWS).

Last fall, O’Neill says she received news from DWS and her landlord that her application had been approved and her relief check was on its way.

But then she got an eviction notice. She says her landlord told her that they would not accept the rental relief money unless she paid a $1,000 fee to the landlord’s attorney, the Law Offices of Kirk Cullimore.

The Cullimore firm not only handles nearly half of all eviction filings in the state, but its founder has taken credit for many of the landlord-tenant laws that have passed the Utah Legislature. The firm also counts as a major principal Sen. Kirk Cullimore, a Republican from Sandy who is also a high-ranking member of the Legislature.

O’Neill was flabbergasted.

“You guys are holding a $6,000 check in your hands and you’re refusing to cash it” she recalled of the experience. “You guys were well aware this was coming and instead you called Cullimore.”

Both the Cullimore firm and Wasatch Property Management, a major real estate owner in the state that manages the units at Garden Lofts, declined to comment for this story.

It’s not the first time renters have complained that the Cullimore firm was pushing renters into settling lawsuits and charging fees in order for the renters to receive rental assistance checks. Under ERA2 rules, a state like Utah is required to allow renters to apply for assistance without also getting approval from their landlord.

In Utah, however, renters can apply directly, but the state still sends the funds direct to landlords.

‘Required to allow tenants to apply directly for assistance’

In 2021, The Utah Investigative Journalism Project reported on how the state of Utah appeared to violate U.S. Department of the Treasury guidance on the disbursement of ERA funds by using a portion of the funding known as Housing Stability Funds to pay landlord attorneys for the costs of evicting renters. The Treasury intended funds to help cover legal costs for defending evictions, not for covering a landlord’s legal bill to remove a tenant for late rent.

In May of 2022, the department updated its guidance to specifically forbid recipients of ERA funding from using the funds to pay landlords’ eviction legal bills.

Utah’s DWS opposed the change, siding with landlords. The state argued that the funds were best used for paying landlords’ legal bills to give renters a “clean slate.” The Department of the Treasury suggested the funds be used for housing counseling and support for vulnerable groups of renters like seniors, domestic-violence victims and the disabled.

When asked to comment on O’Neill’s encounter with the Cullimore firm demanding a $1,000 payment in order to receive assistance, DWS spokesperson Christina Davis in a statement wrote the issue wouldn’t have happened if the state could still use Housing Stability Funds to pay for eviction legal fees.

“We expressed our concern to the Treasury that if we didn’t pay these fees, then the tenant would become responsible for them and it could become a significant burden for the tenant,” Davis said in a statement. “Based on the example you shared, it appears that this may be occurring.”

When asked if DWS was looking into this Cullimore practice, Davis stated that the office had checked with their caseworkers and “this is not an issue we are hearing about from customers.”

She also said the Cullimore firm did not receive any special treatment despite the fact that Cullimore is not only in a leadership position in the Legislature but also sits on the Executive Appropriations Committee that controls the DWS budget.

ERA is a federally funded program that DWS “administers following federal policy and guidance,” Davis said.

“We have never felt pressured by any member of the legislative body to not follow federal or state law at any time for any program,” she said.

Federal guidance says that for ERA2 payment, the grantees who receive the funds — like the state of Utah — “are required to allow tenants to apply directly for assistance, even if the landlord or owner chooses not to participate.”

Davis notes that per federal guidance, Utah renters can still apply directly for assistance, but the funds will still go to the landlord instead of directly to the tenant.

In O’Neill’s case, that policy gave her landlord the opportunity to withhold her assistance until she paid the $1,000 fee to the Cullimore firm.

She said DWS has not heard any complaints from renters and argued that giving payments directly to landlords also “helps us to prevent fraud and use federal funding in a responsible and secure way.”

Sarah Gallagher, Senior Project Director at the National Low Income Housing Coalition in Washington, D.C., says these fears are unfounded.

“We haven’t seen data showing more fraud with direct tenant assistance,” Gallagher said.

DWS stands by the decision to direct all funds to landlords as the fiscally responsible move.

Gallagher says other states have been proactive in establishing protections against renters being hit with extra fees to receive assistance.

“It’s definitely a barrier for tenants to stay housed when they have those extra fees on there,” she said.

‘What the heck is this?’

For O’Neill, everything about the experience was frustrating and confusing.

O’Neill said she received her eviction last August after she and her landlord knew the assistance application had been accepted. The law says that eviction notices must be handed to residents or taped to the door, but O’Neill says hers was slipped through a crack in the door.

“I was like, ‘what the heck is this?” O’Neill said.

Even though she was in a federally covered affordable unit, like many other renters she says she received a three-day eviction notice before receiving the 30-day notice required by the federal Coronavirus Aid, Relief and Economic Security Act.

According to O’Neill, it was upon service of a second eviction notice, this one for 30-days, that she was told that it didn’t matter that her assistance application had been approved — her rent was behind so the apartment wouldn’t cooperate with the assistance if she didn’t pay the $1,000 legal bill.

O’Neill couldn’t even understand what the legal fee was for.

The fee amount was the same that the firm often recoups after it has taken a case through the court system and weeks of filings and at least one hearing. In O’Neill’s case, the fee the Cullimore firm sought came well before the case was settled and dismissed.

O’Neill says she ultimately paid the $1,000 legal fee. But she had to get legal help to get the filed eviction expunged from her record. Still, she is furious with how her landlord treated her at an incredibly desperate time of her life.

“I said ‘I feel like you guys have put me in a 6-foot-deep grave of a hole and I’m trying to climb out of it and you are not working with me at all,’” O’Neill said.