River Oaks Company accused of 'tenant stuffing' in Memorial apartment sale deal

A River Oaks company is being sued over accusations that it engaged in fraud, including “tenant stuffing,” to sell a 671-unit apartment complex in Memorial.

Morgan Acquisitions and Morgan West Oaks Apartments filed a lawsuit on May 3 in Harris County District Court against Camden Property Trust, of River Oaks, citing breach of contract, breach of warranties, breach of covenants, fraud, fraudulent inducement, fraud by non-disclosure, statutory fraud and unjust enrichment.

The plaintiffs say that on Oct. 2, 2008, it entered into an agreement to purchase Morgan West Oaks, a 671-unit apartment complex located at 2400 Briarwest Blvd. in Memorial, for $29,000,000 from Camden.

Hurricane Ike severely damaged the roofs of the complex on Sept. 13, 2008, causing the shingles to lift up, destroying the sealant used to secure the shingles and causing water leaks, according to the brief. The cost to repair the roofs at West Oaks is approximately $800,000 to $900,000.        

The plaintiffs allege that Camden made numerous false and misleading statements about the property, including that it repaired the roofs, that all tenant leases were in full force and that the occupancy rate was in excess of 93 percent, to induce Morgan Acquisitions to buy the apartments.

The plaintiffs are seeking actual and exemplary damages, attorney’s fees and court costs. They are being represented in the case by Dallas attorney Richard Rohan.

Harris County District Court Case No. 2011-26647.

This is a report on a civil lawsuit filed at the Harris County Courthouse. The details in this report come from an original complaint filed by a plaintiff. Please note, a complaint represents an accusation by a private individual, not the government. It is not an indication of guilt, and it only represents one side of the story.