KELOLAND Investigation: Risky rental


VERMILLION, S.D. (KELO) – Most parents don’t expect their college children to live in luxury. But when their housing may be unhealthy that’s another matter.

A group of University of South Dakota college students returned to their rental home in Vermillion for the fall semester only to find mold in at least four of the rooms.

What happened next is subject of our KELOLAND News Investigation into a case of a moldy rental home that has pitted landlord against tenants.

The large home right across from the University of South Dakota campus seemed like the perfect fit for these college students. Wayne Haines moved his daughter, Ivy, in during the fall of 2018.

“Typical college experience; where you move your child into school and make sure they’ve got pots and pans in the cupboard and food in the fridge and everything is good,” Wayne Haines said.

The home had passed the City of Vermillion rental inspection in 2018. The four roommates signed a lease through May of this year. That lease included a clause that reads: “Resident shall maintain a reasonable temperature in the Premises so that all systems are able to function. Should property damage occur as a result of the heat or cooling being shut off, Tenant(s) shall be responsible for paying all damages.”

The young women went home for the summer and later told the landlord that the air conditioner vents were not running throughout the summer. When they returned for the fall semester this what they found.

“The water running down the roof and the mold on the roof of the bathroom and mold on the ceilings,” Ivy Haines said.

“When I went back, my ceiling had been caving in,” roommate Julia Noah said.

The roommates rent the home from Pine Street Property Group, owned by USD alumni Jessica and Dan Korthals, who now live in Texas.

They reported the issues and roommate, Makiah Hunt, let a cleaning crew in.

“He said, ‘In perfect conditions, it can come back in 24 hours. So, you need to get on this and make sure she is repairing the problem. I’m just here to clean what happened from the problem,’” Hunt said.

“They painted over it. I could tell the streaks; you could still see there was something going on, but there was new fresh paint over it,” Noah said.

The renters called up landlord Jessica Korthals. In a recording of that conversation she told them:

“Mold is really typical in old houses like that. I know it seems really scary. But it’s really a pretty typical problem,” Jessica Korthals, of Pine Street Properties, said in a recorded phone conversation.

Korthals also explained what she believed was the cause.

“What’s happening is that the roof is leaking. And so, it’s causing the drywall up in the attic to get wet and moldy as a result because it’s continuing to leak,” Korthals said in recording.

A month later, through their attorney, Pine Street Property Group told the roommates that “after a thorough inspection of the roof at 323 N. Pine Street by a contractor, there have been no leaks or weak points found.”

But during that recorded conversation, Korthals did caution the women. 

“I told Hailey not to sleep in that room, just to minimize your exposure to it, as much as possible,” Korthals said in recording.

“And then we’re going to tear the house down in a year,” Korthals said in recording.

The young women called their parents for advice.

“Don’t even walk in there. I mean don’t even go back in. You can’t take a chance on that,” Wayne Haines said.

He encouraged his daughter to move out.

“As soon as I found out about it, I called the lady up and said, ‘We’ve got problems here with this house and we’re not going to live here until you get it fixed,'” Wayne Haines said.

The girls say they thought they reached an understanding with the landlord.

“We called her multiple times; we emailed her. She said we could leave,” Hunt said.

Although there’s no recording of that conversation, they believed they were being let out of their lease, something Pine Street Property Group disputes.

They found a new home to rent and sent this letter to terminate their lease.

But Korthals wrote back that when it came to the mold they had “remediated through cleaning, sanitation and encapsulation of the affected areas.” She wrote: “We are not aware of any issues which make the living conditions hazardous.”  She said they were,” making every effort to identify and resolve any issues which may have led to the conditions which allowed the mold to form in the first place (such as repairs to the vent fan in the bathroom and the inspection of the roof for leaks).

And that they “do not agree to the termination of the lease.”

“Where are they supposed to be living now until they fix the place? Because they haven’t fixed it. And we’re supposed to be paying rent for a year on a house that’s not even livable today?” Wayne Haines said.

Then in September, the roommates got a letter from an attorney saying “it has been determined that the mold and moisture issue reported by the tenants in the upper attic bedroom was caused by the failure of the tenants to maintain a reasonable temperature in the property over the summer.

Pine Street Property Group sent them a bill for $14,615 in rent, utilities, late fees and mold remediation

“We’re 20, 21, like we can’t afford that. We’re already in student debt, so it’s just another stress,” Hunt said.

After the landlord told the young women the damage was their fault, they called in their own contractor to take a look at the roof and the mold inside.

“That was the first thing I noticed, is you’ve got water coming in here and it’s in the attic too,” Steve Schmidt of Titan Gutters said.

Schmidt says he believed the water was coming in from the roof.

Schmidt told us he thinks the mold was caused by more than the air conditioning not running.

“But just to say, whoever lived in it, this is what they did because of an air conditioner not working–this takes years for this to come to this point,” Schmidt said.

The roommates say the whole ordeal has taught them to make sure they know all the terms of the lease and:

“Document everything. Make sure you have everything on file; talk through email and not on the phone,” Ivy Haines said.

We reached out to landlords Jessica and Dan Korthals who refused an interview, but say the home is safe and inhabitable in a statement.

The property at 323 N Pine Street was inspected by the City of Vermillion on June 1, 2018, the same day that the property was turned over to the current tenants.  At that time there were no code violations or repairs needed.  The tenants retained possession of the property until reporting issues in August of 2019.  Those issues were examined and remediated in a timely manner by appropriate professionals and the residence was determined to be safe for habitation.

At this time we cannot comment any further on the matter due to potential litigation. 

Jessica Korthals, Property manager

The property is scheduled to be inspected by the City of Vermillion again in 2020.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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