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MEMPHIS, Tenn. — The Office of Inspector General for HUD announced Tuesday that it was starting an inquiry into the circumstances that led to HUD ending its contract with Peppertree.

The agency said this will include examining HUD’s oversight of Peppertree and the taxpayer money it’s gotten for rental assistance.

The inspector general said, “Promoting safety in HUD housing is a top priority for my office.” And that people deserve to live in a “sanitary” home with the “fear of being exposed to safety hazards” that pose a risk to their health and well-being.

HUD canceled its contract with Peppertree earlier this year and residents are now in the process of getting vouchers to be relocated.

The News Channel 3 Investigators learned in late 2021, HUD had just signed a brand new, 10-year deal with the owners of Peppertree that was worth roughly two-million dollars per year.

We also found out the company had been paid some $22 million since 2012.

Peppertree is run by Germantown-based Tesco.

The owners have been locked in a lawsuit with the city of Memphis for more than a year about crime and conditions at the complex.

A federal judge twice banned the owners from signing new leases. The parties also remain in environmental court regarding repairs that have yet to be made after a walkway collapsed last August.