7 On Your Side: Lawsuit blames closure of local daycare on 'mega landlord'

OAKLAND, Calif. (KGO) -- An Oakland woman is suing what is now the largest single-family rental giant in the nation.

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The merger of mega-landlords, Waypoint and Invitation Homes, became final on Thursday.

The combined company is valued at $11 Billion with 82,000 single-family homes, some of them, right here in the East Bay.

In her lawsuit, Vanessa Bulnes claims Waypoint failed to make needed repairs to her rental property that would have let her keep her government-funded in-home daycare.

Instead, she was forced to close the Head Start-affiliated program. It is part of a joint investigation between 7 On Your Side's Michael Finney and ABC's Brian Ross. One year after the closure, the toys are still on the shelf waiting for the children to play with them.

"I guess I'm not ready to let go," said Bulnes. "It's been a part of me for so long."

Bulnes ran Tender Arms for 21 years. The last three were out of an Oakland home she rents from Waypoint Real Estate Group.

In 2013, she applied to put a community garden in the backyard for the kids, but when the county tested the soil, they found problems.

"Some of the areas were over a thousand parts per million," said Dale Hagen of Alameda County's Healthy Homes Program.

He says anything with lead levels over 400 parts per million is considered unsafe for children, and could affect their learning ability.

As a temporary fix, Head Start immediately placed a mat over the soil to prevent children from touching it.

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Alameda County offered to clean it up completely, but Bulnes' lawsuit claims Waypoint never turned in the application for that clean up, despite three years of pleading with her and the county.

"I think a responsible owner would act in a timely matter to address lead hazards," said Hagen.

In late 2016, Head Start sent her a letter removing her from the program because "concerns around hazardous lead soil from 2013 were not corrected."

"I lost my income. I lost the children. I lost the daycare," said Bulnes.

In 2016, Waypoint told the county, and later 7 on Your Side, the clean-up came with conditions it could not accept.

Waypoint did clean up the lead on its own, but not until after Bulnes had lost her daycare.

Without her business and her husband on disability, Bulnes was four months behind in her rent, and Waypoint began eviction proceedings. The parties settled and Waypoint forgave $4,500 in rent, and Bulnes' church helped pay the rest.

But she says, she does not have the money to re-open.

"This has been my life's work for 20 years. It's hard for me to just let it go," she says.

In its response to the lawsuit, Waypoint "denies each and every allegation," and said she "is responsible for causing (the) condition of the property."

A joint investigation with ABC's Brian Ross looks at complaints from critics and tenants who claim Waypoint often was slow to fix problems, but quick to threaten eviction.

Charles Young, the Chief Operating Officer of Waypoint, told Ross, the company provides high quality homes in great neighborhoods, adding its own internal surveys indicate a high satisfaction rating among tenants who have received repairs.

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He acknowledged a D+ from the Better Business Bureau, and says they are working to do better.

"But what do you say about that grade, D+? That doesn't suggest you have this huge approval rating," asked Ross.

Young responds, "Yeah, we-- well, we always wanna continue to get better. And we're striving."

Ross says, "That's pretty bad, isn't it? If you got a D+ at Stanford, you'd be in bad shape."

"Now, we wanna get better and we're proud of our 99% approval rating," Young concluded.

The CEO and COO of Waypoint will stay on, in the same capacity, under the new company.

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Produced by Randall Yip
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