It is the start of the month, and rent is due.
Most tenants in Oklahoma know who to pay, but tenants at apartments managed by, or formerly managed by, Vesta Realty aren’t so sure. That confusion stems from ongoing legal battles between Vesta Realty and YSA Investments 1.
As court proceedings continue, tenants have been left in the dark, receiving conflicting information about who manages their apartments, despite a court order transferring management responsibilities for 10 Tulsa complexes from Vesta to YSA.
“This situation is really complicated,” Eric Hallett, an attorney with Legal Aid Services Oklahoma, said at a Tulsa City Council resource session. “It’s so complicated that some of the best lawyers in Tulsa that I’ve talked to are like, ‘We don’t know who is in control of some of these properties.’ Because we have a property owner who got loans from lots of different people and promised every single one of them they got to take it (the property) if something went wrong. And so they’re all coming up at once, trying to take what they think is theirs.”
The Tulsa City Council resource session
The Tulsa City Council held a resource session July 30 to answer questions.
More than 85 people crowded into LIFE’s Active Senior Center in southeast Tulsa to learn about the matter. City council members, representatives for Legal Aid Services, Tulsa Housing Solutions and Tulsa Code Enforcement were present, as well as representatives for Capital Assets.
Tulsa City Council member Lori Decter Wright said the session was held to connect tenants with resources in Tulsa.
While the session provided clarity for some, others expressed fear about what would come next. One resident asked about mass evictions and displacement, recalling what occurred at Tulsa’s Vista Shadow Mountain in 2021.
That apartment complex was shut down due to unsafe conditions, leaving an estimated 200 people with two weeks to vacate the property. It was a mass displacement event that rocked Tulsa housing.
The conditions at Vesta-managed properties are eerily similar, leaving many at the meeting fearing the worst outcome.
Katie Dilks, Oklahoma Access to Justice’s executive director and a Tulsa-based attorney familiar with Vista Shadow Mountain, said the two scenarios still have clear differences.
“I think the concern around mass displacements still is there, though, from the eviction perspective, or simply people getting lost in the shuffle if so many properties are changing hands,” Dilks said.
Greg Wright, Capital Assets’ president, begged a question about evicting tenants from YSA properties for rent nonpayment due to confusion about who to pay. Capital Assets manages the 10 properties that are YSA’s responsibility per the court order.
Wright said communication was a priority, but did not answer directly whether tenants were at risk of eviction for nonpayment because they paid the wrong party or did not know who to pay.
Parker Detweiler, a consultant for YSA, said the company would communicate with all tenants before taking any action.
“We’re not here to kick anybody out,” Detweiler said.
The Vesta resident advocacy group
Vesta tenants formed public Facebook group to share information. Tenants regularly ask questions about their properties, their rights and next steps. Users ask about what to do if they lack water or other necessities. Many, in the last few days, have questioned who will fix their air conditioning.
Dawn Deschler, a Villas at Midtown tenant, asked the group if she could withhold rent if her apartment lacks air conditioning. She said she’s been without it for months. She’s also received conflicting information about who gets her rent.
“There’s no telling if everybody’s aware of what’s going on right now,” Deschler said. “I’m just at a loss.”
Marc Kulick, Vesta Realty’s CEO, is in the Facebook group and plays an active role in talking to tenants.
“It’s truly sad that this group has to be created, but I do understand,” Kulick said in his first post. “If anyone just wants to attack me personally, I won’t respond. However, if you would like to ask me any questions, get more information on accusations against me, point out specific problems at properties or ask questions about why something bad is happening, please feel free to ask or say anything.”
Kulick declined interview requests from Oklahoma Watch for this story. He did an interview with Oklahoma City television station KFOR-TV that focused on tenant conditions and the court proceedings.
Court battles
According to Vesta’s portfolio, the company managed 28 Oklahoma properties and two out-of-state properties. Headlines were made when former arms dealer Efraim Diveroli exercised his option on a high-interest loan to claim ownership of the properties.
Diveroli, best known as Jonah Hill’s character in the film “War Dogs,” made multiple loans to Kulick with a 7,000% interest rate compounding daily. The high interest rate is acceptable in Delaware, where there are no unconscionability restrictions.
Legal battles ensued, and in a dramatic fight over ownership, locks were changed, and police were called at Tulsa properties as the two entities tried to take possession.
Then, another twist: YSA filed for bankruptcy.
Kulick took to the Facebook group.
“I’m not going to be able to respond further because I’m still trying to piece together what just happened,” he wrote. “Five minutes before Efraim (Diveroli) was supposed to testify, YSA declared bankruptcy in Delaware. 15 minutes later, the judge appointed a Chapter 11 Trustee. The deals YSA took on July 20 are under Capital Assets Management until a Chapter 11 Trustee decides otherwise. The rest of the deals are managed by us until the same.”
Dilks, the Oklahoma Access to Justice Foundation executive director, said no one imagined that wrench being thrown into the proceedings in addition to Kulick’s Louis Investments bankruptcy, filed in Texas’ Northern District in July.
“Where we are now, with two competing bankruptcy proceedings in two different states, is truly something at a level of confusion that I have not seen before, particularly in landlord-tenant issues,” Dilks said. “Clearly, it’s been incredibly challenging for anyone to provide meaningful advice for the tenants here because things were literally changing every day over the past week and a half, to two weeks, and we didn’t get to something that felt like any level of clarity until just four days before rent is due.”
Vesta Realty’s history
In February, Stillwater declared Vesta property Remington Ranch a public nuisance. In March, an Oklahoma Watch investigation found that while tenants lived in squalor, Kulick had a lavish lifestyle. Then, in April, Kulick’s business partner Josef Loeffler sued Kulick, claiming that Kulick used the business for personal enrichment.
The 199-page lawsuit was just a portion of Kulick’s legal trouble at the time. In April, there had been 13 lawsuits filed against Kulick and Vesta Realty since December, many by contractors alleging they had not been paid.
“It’s not a secret that as we’ve been choked off from all funding, it is harder and harder and harder for us to do what we need to do,” Kulick said in a July 30 KFOR interview.
The company’s problematic management includes leaving tenants without heat and water, not paying for trash collection (resulting in dumpsters being removed), and not paying cities for water, leading to tenants getting water cutoff notices almost every month.
It has also left tenants in unsafe conditions.
In an egregious case, Deschler, the Villas at Midtown tenant, had a leak in her living room from February through June.
Noah Miliken, a contractor who did work for Vesta, said the company owes him $103,194. He has not taken the matter to court because he’s not sure if it’s worth the time and money.
Dilks said that in the end, the situation presents an opportunity for Oklahoma to examine the state’s tenant protection laws.
“I think this is a really interesting situation, to look at what some landlord law looks like in other states and what specifically tends to fall under the tenant remedies sections of the law, which is where Oklahoma’s law is particularly lacking,” she said.
Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.
