I-Team: Legal problems escalate for Sedamsville 'slumlord'

Posted at 5:00 AM, May 22, 2018
and last updated 2018-05-22 18:41:37-04

CINCINNATI -- A landlord has retained control of dozens of Sedamsville homes for nearly two decades, despite numerous building code violations, several criminal cases over alleged "unsafe" conditions and delinquent taxes on some properties.

But now John Klosterman's critics say he should be worried.

Last July, the City of Cincinnati sued Klosterman, his wife Sue and companies allegedly connected to them for $579,000 in unpaid taxes, fees and fines the city said they owe. The lawsuit documented a long history of violations, including cases where Klosterman rented out condemned buildings, then evicted the tenants and sued them for rent. Also, federal prosecutors filed a civil complaint against Klosterman two months ago, alleging he sexually harassed women tenants and offered them free or reduced rent for sex, a violation of the Fair Housing Act.

John Klosterman's mug shot

Klosterman owns about 70 properties, most of which are in Sedamsville.

City inspectors began citing him for building code violations nearly two decades ago. Inspection reports and court records detail the "dangerous conditions" at Klosterman's buildings along with the warnings, violations and fines issued to him. In one 2016 case, a judge sentenced Klosterman to 60 days in jail for his "willful disregard" about a hazardous property he owned.

Dale Huddleston, who said he rented an apartment from Klosterman for a year, called the man a "slumlord" and added he doesn't believe Klosterman cares about his tenants.

"All he cares about, pretty much, is himself and his money," Huddleston said. "That's all he cares about."

Klosterman declined to comment and fled from a reporter.

"I don't want to speak to you," he said. "It's a negative conversation, and I won't have it."

Jimmy Smith, a longtime Klosterman employee, said his boss is trying to repair the buildings.

"He has no choice but to fix them up," Smith said.

The 9 On Your Side I-Team found that, in some cases, city inspectors repeatedly documented "dangerous conditions" and the city fined Klosterman thousands of dollars, even forcing him to demolish buildings. However, the city didn't provide records showing Klosterman had been fined for other properties that inspectors described as "dangerous."

Stephanie Sowards' house is surrounded by Klosterman's buildings. She said she doesn't think the city has done enough to hold him accountable.

"It makes the whole block look like crap," she said.

A city inspection photo showing the interior of the former church

The waste is evident on the 129-year-old Lady of Perpetual Help Church, a building that has spent years in desperate need of help. Klosterman bought it in 2004. Five years later, the city declared the church an "unsafe" "public nuisance" and targeted it for demolition. Historic preservationists raised support to protect the building, and city taxpayers paid about $200,000 to stabilize it.

Klosterman still owns it. It's unclear if he's required to repay taxpayers.

"He don't care," Sowards said. "All he's worried about is the almighty dollar."

Before filing the lawsuit, city building inspectors cited Klosterman repeatedly for the rundown and "dangerous" condition of his buildings. The city has asked a judge to put the buildings under the control of a receivership until the case is resolved.

'He's an extreme example'

Klosterman touched female tenants without consent and offered to lower their rent or excuse late payments in exchange for sex, according to U.S. Attorney Benjamin Glassman. He said the harassment dates back to 2013.

Klosterman also entered the homes of his female tenants without their consent and monitored their daily activities with cameras directed at their units and through other means, according to the federal complaint.

MORE: Sedamsville landlord harassed women, feds say

Nick DiNardo said housing discrimination "is still a huge problem in our community." He's the managing attorney for housing and consumer cases at the Legal Aid Society of Greater Cincinnati. Legal Aid has represented some of Klosterman's tenants.

"He takes advantage of the most vulnerable tenants ... He's an extreme example, but we see this a lot," DiNardo said.

Cincinnati needs 40,000 more low-income housing units to meet the needs of people who are most likely to rent apartments that are in poor condition just to have a place to live, according to DiNardo.

"There isn't enough decent housing for them, so we have a real crisis in the city right now," he said.

DiNardo said the city is a leader in efforts to support vulnerable tenants, but the challenge can feel overwhelming.

"We only have so many building inspectors. We only have so many Legal Aid attorneys," he said. "And so we try to prioritize for the most important cases. I think that's why someone like Klosterman is in trouble right now, because he was one of the largest offenders."

Before filing the lawsuit, city building inspectors cited Klosterman repeatedly for the rundown and "dangerous" condition of his buildings.

The city is requesting damages for alleged victims and financial penalties against Klosterman.

Klosterman's attorney wrote in a memorandum that they dispute the city's claims and "look forward to presenting their defenses at trial."