Attorney General Sues Lake Castleton Over Uninhabitable Units
INDIANAPOLIS, IN – Indiana Attorney General Todd Rokita has filed a civil lawsuit against the owners and property managers of Lake Castleton Apartments on the city’s northeast side, saying they systematically failed to maintain habitable housing and ignored a long list of health code violations.
The suit targets property owner Lake Castleton Owner LLC and management company Pepper Pike Property Management LLC, both out-of-state entities, for allegedly violating state consumer protection and landlord-tenant laws.
The lawsuit, filed by the Attorney General’s Homeowner Protection Unit, claims the management companies repeatedly failed to repair crucial systems and knowingly leased units that were unfit for habitation.
Key accusations in the lawsuit include:
132 Health Code Citations: Between July 2024 and September 2025, the Health and Hospital Corporation of Marion County filed approximately 132 ordinance violation cases against the defendants for issues including sewage backups, water damage, mold, pest infestations, and broken air conditioning.
Tenant Harm: Consumer complaints filed with the AG’s office detail accounts of collapsed ceilings, prolonged lack of heat or hot water, and unresponsive maintenance staff.
Unfit for Habitation: Site visits by the AG’s office documented severe issues, finding some units unfit for people to live in.
Attorney General Rokita stated, “We are committed to protecting vulnerable Hoosiers from exploitative practices that threaten their safety and well-being. All landlords have a legal and moral duty to provide habitable housing, and when they repeatedly fail to do so, my office will hold them accountable.”
Legal Action Seeks Restitution
The Lake Castleton complex, which encompasses over 1,200 units, was acquired by Cleveland-based Pepper Pike Capital Partners in March 2022 for a record $171 million. However, the severity of the problems led to a separate Marion County court action, resulting in the property entering receivership on October 3, 2025.
The civil lawsuit primarily seeks:
Restitution for affected tenants, including financial losses.
Injunctive relief to prevent future legal violations.
Civil penalties of up to $5,000 per knowing violation.
The case has been formally filed in U.S. District Court and requests a jury trial. The Attorney General’s office encourages Hoosiers to report suspected scams or housing issues by visiting indianaconsumer.com or calling 1-800-382-5516.
