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Court battle brews between new Westside homeowner and rent-to-own company

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Divvy Homes has sued Atlanta Progressive News editor and housing advocate, trying to invalidate his lease

A photo of Cardinale standing on his front stoop.
Atlanta Progressive News editor Charles Cardinale has no plans to vacate his new home, a Hunter Hills brick bungalow.
Sean Keenan, Curbed Atlanta

A San Francisco-based rent-to-own company is headed to court with one of its Atlanta tenants, aiming to void a lease and remove him from his new Westside home.

As Atlanta’s affordable housing crunch becomes more severe, it’s a situation that could prove to be a cautionary tale.

Rent-to-own programs allow city dwellers who wouldn’t otherwise be able to purchase a home to rent one while slowly earning equity.

Divvy Homes, a young tech startup just breaking into Atlanta, allows people in the market to pick the houses they want and work toward buying them.

“We’ll buy a home for you, and you buy it back from us in three years,” Divvy CEO Brian Ma told Curbed Atlanta of the company’s strategy.

Matthew Cardinale, a locally known advocate for housing equality and the head editor of Atlanta Progressive News, entered into a lease agreement with Divvy Homes on Feb. 1, under the impression he’d slowly work his way to homeownership.

Cardinale found a spot in Atlanta’s Hunter Hills neighborhood, positioned west of downtown between Joseph E. Boone Boulevard and Mozley Park to the south. He felt confident the Beltline’s nearby Westside Trail would help boost property values in the area, making the roughly $146,000 price tag Divvy guaranteed—after he’d been renting for years—seem like a wise investment, said Cardinale.

“I thought this was finally a way to start building some wealth with homeownership,” he said.

Divvy, however, might not have known how hot that real estate was and will become. Nor did it understand—even after its initial inspection of the house—how much renovation the place would require. “Neither of us knew what it needed,” Ma said.

Cardinale’s landlord made some $12,000 worth of fixes as he moved into the place in February, but that stopped short of helping him with further requests to bring the property up to the city’s housing code, according to APN:

Divvy Homes’s standard lease provides that the tenant shall be responsible for all repairs. APN’s Editor negotiated the lease to state, instead, that Divvy would be responsible for all structural repairs.

When Cardinale moved in, water wasn’t running upstairs, a broken sewage line leaked beneath the property, and some of his windows wouldn’t close, among many other problems in violation of housing codes, he said.

A photo of Cardinale showing his new water pipes.
Newly installed pipes have remedied Cardinale’s upstairs water problem.
Sean Keenan, Curbed Atlanta

On April 6, Divvy sued Cardinale, aiming to cut its losses and duck out of the lease agreement. One of the company’s claims suggested his tenure as a housing advocate meant he’d entered into the deal unfaithfully, per court documents.

“Cardinale appears to have entered into the lease for purposes of his own agenda as a housing advocate and not in a good faith effort to pursue homeownership under the Divvy Homes program,” according to legal documents provided by Divvy.

At first, Divvy even said he had no intention of buying the property, according to Cardinale. It later dropped that claim, but still believes his housing advocacy was a testament to supposed ulterior motives.

Not so, said Cardinale: “I want to live here for 10 years or more.”

A photo of Cardinale in his poorly-designed bathroom.
Cardinale sweeps a puddle of standing water in his shower down the drain.
Sean Keenan, Curbed Atlanta

Divvy retained the Troutman Sanders law firm to help it tackle the case against Cardinale, who, incidentally, seems willing and able to take the group to task.

Cardinale, in so many words, told Troutman Sanders he’s ready for war. “[I] advised [an attorney with the firm] to secure a large retainer from Divvy Homes because the further communications are expected to be voluminous.”

One of Divvy’s Troutman Sanders attorneys, William Droze, was not immediately available to comment for this story.

Cardinale said that Divvy’s—and other rent-to-own companies’—business model thrives off of the low-income residents that seek out its services. They tend to cater to people who typically wouldn’t be approved for mortgages because of poor credit scores or an inability to make down payments.

“We look for people who are very, very close to being able to get a mortgage,” Ma told Curbed.

Typically, people in these positions aren’t financially equipped to take on a landlord in court. In many cases, low-income renters won’t alert property management to needed fixes, since causing headaches for the landlord could mean rent increases or a non-renewal of the lease.

“We’re trying really hard not to tell our side of the story yet, just because we’re involved in this lawsuit,” Ma said, later adding, “We’re still actively repairing his home for him. The contractors were out [Tuesday] to do quotes.”

A photo of Cardinals pointing out issues in his home.
That light fixture doesn't work, Cardinale said.
Sean Keenan, Curbed Atlanta

Cardinale said two contractors had, in fact, recently visited to take stock of the problems, although he’s not sure they were there for his sake.

“Because it’s a code enforcement matter, they have to make the repairs anyway,” he said. “But if they get me out of this place, they can hold onto the property and sell it in a few years for maybe $300,000 [once fixed].”

Recent media coverage of Cardinale and Divvy’s legal battle has ostensibly done no favors for the company’s rent-to-own operation. “This is obviously not great for us, just because we have a disgruntled customer, and we want to make sure we do right by him,” Ma said.

This week, Cardinale created a Facebook event page to garner support for himself in the upcoming courthouse saga in Fulton County Superior Court, which begins May 25. Stay tuned.