The Hilltop Inn in Berlin on Sunday, April 30, 2023. Photo by Glenn Russell/VTDigger

People losing their shelter this summer, as the state winds down several pandemic-era programs that housed people in hotels and motels, face yet another obstacle: getting their state-funded $3,300 deposits back.

One set of hotels is even asking tenants to sign away their rights to the cash in exchange for $500 — a move that Mark Hengstler, an attorney at a nonprofit that represents low-income Vermonters in civil matters, said clearly violates state rules.

People who are signing these documents are doing so “under duress,” said Hengstler, who works at Legal Services Vermont.

“If I’ve been homeless for months, and I am pretty sure that I’m getting evicted in a few days,  and I have no money for camping supplies — and I have no money for anything — am I going to take $500 guaranteed right now?” he asked rhetorically. “Or am I going to take nothing and then hope that, you know, Legal Aid takes my case and then a few months from now I succeed in suing the hotel for $3,300 and get this money months down the line?”

He noted that the waivers that people are signing state that they “may” have caused some unspecified damage. But the relevant question is whether a room occupant actually did do damage, Hengstler said.

“And if the answer is ‘no,’ the hotel is obligated to return the money,” he said. “So I think these are clumsy attempts to breach a contract and to violate state rules.”

Not everyone who has been staying in motels for lack of housing through the state’s pandemic-era programs is eligible for the $3,300. But those who participated in the state’s “Transitional Housing” program, which began in July 2022 and ended this March, might be. To receive the money, motel residents must also have lived in their room for at least four months and done no damage beyond “ordinary wear and tear,” according to the occupancy agreement signed between tenants and hotel owners. 

Anil Sachdev, who co-owns multiple hotels participating in the program — in Rutland, Brattleboro, Berlin and Montpelier — freely acknowledged that his staff has been asking certain guests to sign such waivers. But he claimed that they were doing so only when there was more than $3,300 worth of damage done to the room, and insisted no one was being forced to sign anything.

Sachdev acknowledged he isn’t providing those who sign the waivers with an itemized list of damages or the photos staff have taken of their room. But he said the people signing these documents haven’t asked for such proof, because “they know they have destroyed the room completely.”

“And when we tell them it’s going to cost more than $3,300 to fix your room — they know that and that is what they’re signing,” he said. “They’re not signing it without reading it.”

Motel and hotel tenants started complaining about property owners wrongly pocketing the deposits basically as soon as they began leaving the program. And Legal Services has sharply criticized the state for allowing such abuses by putting too few guardrails on the money. 

Sachdev, a principal in several of the largest hotels participating in the state’s pandemic-era shelter programs, has been repeatedly fingered by Hengstler — who has been helping former tenants file suits in small claims court for months now — as one of the worst offenders

“All these mom-and-pop hotels, basically, for the most part did what they’re supposed to do. And these properties, owned by these guys, didn’t,” Hengstler said Friday.

Miranda Gray, deputy commissioner of the Department for Children and Families’ Economic Services Division, said the state is tracking some deposits — those owed back to the state because an occupant resided in their room for fewer than four months. But it isn’t keeping tabs on the money due back to residents. 

And while the department has now sent out several reminders to hotels, reiterating that they are expected to return the cash to their tenants unless they can itemize and document damage, Gray suggested it isn’t planning to intervene further.

“I think there are other, you know, resources for the clients to be able to get support with getting security deposits back if they feel that they are owed more than what they received,” Gray said. “You can call Legal Aid, for example.” 

But another state agency may get involved. Hengstler has also reached out to the Vermont Attorney General’s Office, suggesting it could bring a case under the Vermont Consumer Protection Act.

Lauren Jandl, chief of staff to Attorney General Charity Clark, wrote in an email Friday that the AG’s office was “aware of the situation” and working with the Agency of Human Services “to determine next steps.”

“In the meantime, we encourage Vermonters who believe their security deposits have been wrongfully withheld to contact the Attorney General’s Consumer Assistance Program by calling 800-649-2424 or visiting,” she added. 

Correction: An earlier version of this story misspelled Mark Hengstler’s last name.

VTDigger's political reporter.