A State College-based property management company has agreed to pay $ 40,000 after a review of its security deposit practices, state attorney general Josh Shapiro said on Tuesday.
The Bureau of Consumer Protection has accused Continental Real Estate Management of deducting an administrative fee of 15% from tenants’ security deposits at the end of their leases since January 2012, according to a court document.
This practice continued until January 2015, when the company collected $ 79,223 from tenants, an average of $ 79.70 per tenant, according to the document.
The administrative fee had no relation to the “actual amount of damages” and was simply a surcharge added to the alleged damages, the attorney general’s office said.
The company was also charged with keeping $ 14,483 in tenant deposits from January 2013 through March 2017 as “liquidated damages,” according to the filing.
Continental “gets an A” for cooperating with the investigation and agreeing to change its business practices, Shapiro said. The deal did not include an admission of fault or liability by the company, according to the document.
“Students are trying to secure their future, face the rising costs and are living alone for the first time. These unfair rental practices were an additional burden, ”Shapiro said. “This company should be a model of how businesses in Pennsylvania can work with my office to correct violations and protect consumers.”
Continental agreed to pay $ 30,000 in restitution to former tenants; they must file valid claims by May 31 to be eligible. The company also agreed to pay $ 5,000 for civil penalties and $ 5,000 for public protection and education purposes, according to the court document.
Complaints can be filed by calling (800) 441-2555, emailing scams@attorneygeneral.gov, or visiting www.attorneygeneral.gov.
Continental chairman John Hanna, who signed the deal, said the settlement was “just a business decision” after speaking with lawyer Brett Woodburn.
If tenants fail to pay their related bills and don’t leave the property clean – according to their lease – the management agency must do so, Hanna said on Wednesday.
“It takes us time and money to do that, and that’s what the administration costs are for – when people don’t live up to their lease terms. This is the end, ”Hanna said. “Everyone in town has been charging it for as long as I can remember, and I’ve been in this business for a long time. “
The company was unaware that she was breaking the Landlord and Tenant Act and was surprised when contacted by the attorney general’s office, Hanna said.
“Our choice was to take this to court and pay more legal fees or settle. It all comes down to the technical definition of damage, ”Hanna said. “This is what they rely on. If they want to take that position, proving otherwise would take a lot of money and a lot of time in court. “
The agency stopped charging administration fees in August and will no longer charge them in the future, according to the company’s press release.
“We are doing everything we can to get this behind us. It’s that simple, ”Hanna said. “We want to move forward. We have a good reputation in the city and we want to preserve it.
This story was originally published April 3, 2019 10:48 am.
