An 80-year-old Los Angeles County homeowner who needed a minor roof repair will finally be able to take her case against the county to trial, her lawyers say.
Alma Foster has spent more than seven years fighting a debt tied to Los Angeles County’s Property Assessed Clean Energy program, known as PACE, according to Neighborhood Legal Services of Los Angeles County.
NLSLA said Los Angeles Superior Court denied the county’s latest attempt to avoid liability on June 4, clearing the way for Foster’s case to be heard by a jury.
For homeowners, the case turns on a painful gap between a repair pitch and a property-tax lien. A project that sounds small at the door can become far more serious when the financing is tied to the home itself.
The Repair Was Presented as Subsidized
Foster was approached in 2015 by a county-registered contractor after she needed a minor roof repair, according to NLSLA. The contractor told her he could provide the repair at a subsidized rate of $7,500 through the county’s PACE program.
Her lawyers say she was not told the program would place a lien on her home or require her to pay nearly $180,000 through her property taxes over the life of the lien.
Lawyers Say the Contract Was Forged
NLSLA said the loan agreement left Foster with nearly $85,000 in debt she never consented to. The group also said the contractor forged her signature, received more than $80,000 from Los Angeles County, and left her facing possible foreclosure.
Foster asked the county to void the contract, but NLSLA said the county refused. She filed suit in 2019 with help from NLSLA and the UC Irvine Consumer Law Clinic.
The Case Will Now Go to Trial
The California Court of Appeal previously revived several of Foster’s claims and sent the case back toward trial, according to NLSLA.
NLSLA said the appellate court also determined that the contract Los Angeles County continued trying to enforce against Foster was forged.
After the case returned to the trial court, the county again argued it was immune from liability. NLSLA said the June 4 ruling rejected those arguments and allows a jury to consider the county’s liability.
PACE Loans Have Faced Broader Scrutiny
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PACE financing was designed to help homeowners pay for energy-efficient improvements through property-tax assessments.
California’s Department of Financial Protection and Innovation warns that PACE is not a free government program. The agency says homeowners must repay PACE contracts through increased assessments on their annual property tax bills.
The agency also warns that PACE assessments can make it harder to sell or refinance a property because a lien is placed on the home until the contract is paid off.
Contractor-Arranged Financing Needs Extra Care
The Federal Trade Commission has also taken action over PACE financing practices. In a 2022 case involving Ygrene Energy Fund, the FTC and California alleged consumers were deceived about the financial impact of PACE financing and that liens were placed on homes without consumers’ consent.
The FTC said PACE payments are collected through the homeowner’s property tax bill and that failing to pay can put the property itself at risk of foreclosure.
Homeowners considering any repair, solar, roofing, window, insulation, or energy-efficiency project should read the financing documents before work begins, confirm whether a lien will be recorded, check the contractor’s license, ask how the payment will appear on property taxes, and get independent advice before signing anything on a phone or tablet.