Houston — A Texas company that manages the Houston office buildings of two of the nation’s largest insurance companies sued a bank Wednesday seeking more than $1 million in damages for allegedly failing to keep the property up to code.
The Office of Property and Business Regulation filed the lawsuit in Harris County against a Houston-based mortgage brokerage and its bank for failing to comply with a 2010 city-state code that requires landlords to maintain buildings that comply with building code standards.
Houston-based Littlest Associates, which manages offices in the Houston offices of Citigroup Inc., is one of the two firms that owns the two buildings in Rayburn Office Building and Houston Center Office Building, which are located on a former warehouse site in the city.
The property is owned by Houston-area mortgage brokerage Fidelity Financial Services, according to the complaint.
Houston attorney Mark Cone said in the complaint that Littest failed to maintain the building’s building code and was not upfront about the code violation and that the company did not have adequate inspections.
Cone said the complaint alleges that Lattlest Associates’ failure to follow building code was intentional, but did not address the financial consequences for the property’s owners.
The complaint also says the company failed to notify residents of the violation, which the company’s attorney declined to comment on.
Houston’s property code requires buildings to have a minimum of 10 floors and no more than two stories in height, Cone noted.
“In short, the code does not require Littlest Associates to provide the property owner with a minimum floor or a minimum number of floor-to-story height requirements,” he said.
The code states that a building must be “completed and constructed in accordance with the building code, including all applicable building materials, fittings, structural elements, electrical and mechanical systems and any other necessary equipment and services.”
Houston-area real estate broker Brian Ewing said he is unaware of the filing.
He said he was unaware of Littelest Associates’ role in the property and that it has not filed a complaint with the city for compliance issues.
Ewing said Littleas is the second Houston-related company that he has dealt with recently.
His firm has been handling residential property for a number of years, but this is the first time he’s had to handle property related to the Houston area.
He’s seen a lot of properties change hands in Houston and it’s always a concern, he said in an interview.
The real estate industry has seen a wave of complaints about properties sold for much more than they are worth and some of them are more than a year old.
Ewings said he doesn’t see how a lender could be liable for a building that’s been vacant for so long.
He added that he expects the property will be assessed, but that the city will need to go through the process of going through a real estate appraisal before he can get a loan.