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Indiana Attorney General Todd Rokita said he filed a civil lawsuit against the owners of a massive apartment complex in Castleton—a property that has set a state sales record twice over the past eight years.
In the Tuesday announcement, Rokita and his Homeowner Protection Unit team said the owners and property managers at Lake Castleton Arms “endangered tenants with uninhabitable conditions” and “systematically failed to repair critical systems such as air conditioning and plumbing.”
The lawsuit accuses the landlord of ignoring or failing to promptly address more than 130 health code citations and continuing to lease “uninhabitable” units in violation of state law.
The suit was filed against Beachwood, Ohio-based property owner Lake Castleton Owner LLC and Orange Village, Ohio-based property manager Pepper Pike Property Management LLC. Rokita said both entities are foreign limited liability companies registered with the Indiana Secretary of State.
Lake Castleton Arms, 1,261-unit complex on nearly 90 acres at Shadeland Avenue and 75th Street, was acquired for a state record $171 million in March 2022 by Cleveland-based Pepper Pike Capital Partners.
The price was—nearly double the then-record $90.6 million paid for the property by Mishawaka-based Sterling Group and Austin, Texas-based Virtus Real Estate LLC in June 2019.
The property is the second-largest apartment complex in the Indianapolis area in terms of units, trailing only the 1,381-unit Westlake Apartments, near Interstate 465 and Rockville Road
The 97-building apartment Lake Castleton Arms complex was built in phases between 1978 and 1982 near the interchange of I-465 and I-69. Units range from 431-square-foot studios to 1,266-square-foot units with two bedrooms.
Advertised monthly rents at the apartments range from $814 to $1,542, according to Apartments.com.
According to the lawsuit, Health and Hospital Corp. of Marion County filed 132 ordinance violation cases against the defendants between July 2024 and September 2025, with 14 cases so far resulting in judgments against Lake Castleton Owner LLC.
The violations were for issues including broken air conditioning units, sewage backups, water damage, mold and pest infestations. The attorney general said consumers complained of collapsed ceilings, prolonged lack of heat or hot water, unresponsive maintenance, and requests to remove negative reviews in exchange for concessions.
“We are committed to protecting vulnerable Hoosiers from exploitative practices that threaten their safety and well-being,” Rokita said in written remarks. “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. We especially see problems with out-of-state landlords.”
On Oct. 3, an undisclosed receiver for the property was appointed.
The lawsuit is seeking “restitution for affected tenants, including financial losses, as well as injunctive relief to prevent further violations.”
It also seeks civil penalties of up to $5,000 per violation, triple damages for senior consumers and reimbursement of the attorney general’s investigative costs.
According to its website, Pepper Pike Capital Partners and related entities have redeveloped 63 real estate properties in eight states and 13 cities. Its current portfolio includes “a diverse mix of Class B properties” in Ohio, Michigan, Indiana, and St Louis.
Its local properties besides Lake Castleton Arms include 9 on Canal, A/62 Apartments, Crooked Creek Apartments, Fountain Parc Apartments, Hanna Village Apartments, Meridian Court South and Spinnaker Court Apartments.
A representative at Lake Castleton Arms declined to comment on the lawsuit. A message could not be left at Pepper Pike Capital Partners because the voice mail box was full.
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