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Business & Economy

Central Ohio property manager, developer Borror facing real estate misconduct charges

Entrance to Silvertree apartments in Westerville, Ohio
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The Silvertree apartment complex in Westerville is one of six Central Ohio properties Borror Property Management is facing misconduct charges from the state of Ohio.

The Borror name has been well-known on the Columbus real estate scene since it became active in the 1970s. Now, the current owner, who is the son of the company's founder, is facing real estate misconduct allegations.

An Ohio Department of Commerce’s Division of Real Estate investigation found evidence that Douglas Borror, his business Borror Property Management and his employees CEO LoriBeth Steiner and Senior Vice President Danielle Borror Sugarman, operated improperly and conducted real estate broker activities without the proper licenses.

Brad Midlin, founder of Los Angeles-based Oro Capital Advisors, said he got involved with Borror because of their positive reputation in the Columbus market.

"They were considered a prominent, well-respected, well-connected (company). (And) received public money from the state to do developments," Midlin said.

Midlin said his company has been in the Columbus real estate market since the 1980s.

After selling a large downtown portfolio, Midlin decided to get into the market for multi-family homes. The company bought six properties from Borror Property Management around 2017 or 2018.

The company retained Borror to be the onsite managers, to work with renters, market the rentals, write leases and take security deposits, but the arrangement didn’t last.

“Our relationship ended in August of 2019 in a poor way. People sometimes ask, 'you know, Brad, you must be angry at Borror.' I'm not angry. I'm very disappointed. Disappointed that they felt that the rules didn't apply to them,” Midlin said.

Oro Capital sued Borror in Franklin County, claiming the real estate company failed to fulfill its obligations, by giving out unauthorized discounts on rentals as favors, failing to put funds into a trust, withholding records and failing to pay vendors. Borror countersued and claimed Oro ended their contract prematurely without cause. The suit is still ongoing, according to county court records.

Midlin said that during the suit, they discovered the company they did business with appeared to be operating without a license, though paperwork indicated proper licensing was a requirement of their contract.

“We were aghast when we found out that they weren't licensed. It just shocked us,” Midlin said.

Midlin said licensing is in place for a reason. “My understanding of the license is to make sure that the people who are putting themselves out to the public in a regulated industry are properly trained, educated and up to a certain level of ability to protect the public. Otherwise, you wouldn’t need a license,” he said.

Midlin filed a complaint with the Ohio Department of Commerce’s Real Estate Division against Borror Property Management, Borror, Steiner and Borror Sugarman.

Attorneys for Borror, Borror Sugarman and Steiner did not respond to requests for comment from WOSU.

In 2020, the Department of Commerce's investigation found enough evidence to continue the case by issuing charges against the company and the three people, accusing them of misconduct.

While a Borror company had a license, the Division of Real Estate found Borror Property Management did not have a license and operated without one when doing property management activities, such as negotiating leases and renting out properties. Borror, Steiner and Borror Sugarman have licenses, but they’re accused of acting outside of what they’re licensed for and under an unlicensed business.

Steiner and Borror Sugarman are licensed to sell real estate, but not to perform broker activities such as property management.

The Division of Real Estate found the company violated Ohio licensing laws 2,300 times between 2017 and 2019 in dealings with half a dozen properties in Columbus, Dublin and Westerville.

The state can revoke or suspend real estate licenses on these types of charges.

The Ohio Real Estate Commission can issue civil penalties and fines of up to $2,500 per violation.

Now, nearly three years later, hearings in the cases have not yet been held, with multiple continuances putting them off. The last hearing was scheduled for January.

“The first complaint was filed in April of 2020. We're now coming up to three years. And it's been delayed many, many times and it's just time to have the hearing," Midlin said. "This is not a complicated manner. I know that the Department of Commerce is working diligently. I don't know why it's been extended for just shy of three years, other than Borror wants to keep on delaying it.”

The company asked for a continuance as it tries to negotiate a settlement with state officials ahead of a hearing. A hearing officer gave them until the end of the month to determine if a settlement can be reached. Settlements have to be approved by the Real Estate Commission and can include the same types of penalties issued after a hearing.

Douglas Borror is accused of conducting real estate broker activities without the proper license, authorizing others to do so, failing to place property management fees in a trust account and failing to provide services.

Borror Sugarman faces one charge, claiming that although she was licensed to sell real estate, she wasn’t licensed to conduct broker activities such as property management.

That’s the same charge of misconduct levied against Steiner, who is also charged with allowing the company to operate as a broker without the proper licensing.

Renee Fox is a reporter for 89.7 NPR News.