DENVER — Colorado Attorney General Phil Weiser announced a settlement Tuesday with property management company Four Star Realty after an investigation found the company illegally charged tenants for routine repairs and other services.
Four Star Realty manages properties that are often rented by college students in Boulder, Fort Collins, Greeley and Denver, according to the Attorney General’s Office. The company was found to have regularly charged tenants for damage that they did not cause, billed them for unnecessary work and charged fees that were not in their lease, Weiser said.
Under the terms of the settlement, Four Star Realty agreed to pay the state about $1 million that will be earmarked for customer restitution, according to the attorney general’s office.
“Too often, landlords and property management companies nickel and dime tenants by deceiving them into paying for things like normal wear and tear or damage from previous tenants, or by charging fees not reflected in leases,” Weiser said. “... In agreeing to this settlement, not only is Four Star choosing to do the right thing and reform its business practices, but it is also working with our department to set the standard for fairness and transparency in the industry that others must follow to comply with state law."
In a statement, Four Star Realty denied any wrongdoing and said they agreed to the settlement to put the matter behind them and avoid "years" of expensive litigation.
Lori Greenly complained to the 20th Judicial District D.A.'s Office after her daughter Cassie was charged more than $700 from her security deposit for seemingly minor things like adjusting the handle on a toilet seat, replacing light bulbs and cleaning carpeting. Cassie had only lived in the Four Star Realty managed property for six months.
“They were trying to go above and beyond charging for stuff, and it was ridiculous,” Lori Greenly told 9NEWS in an interview.
Mercedes Stolcis helped pay her son's $4,400 deposit to live at Parker off Pearl, another Four Star Realty managed property. Stolcis said when her son moved out, the company kept all but $400 of that deposit, charging to replace flooring she said didn't need to be replaced and replacing appliances.
Stolcis said her son was also charged many fees that were never disclosed to him before he signed the lease.
“It just feels like I'm being taken advantage of," she said. "And I feel like I'm a savvy consumer, outside of an angry mom.”
>Watch a replay of Tuesday's announcement in the video player below.
In addition to restitution, Four Star Realty agreed to disclose all rent and other costs to tenants clearly on lease documents. The company will also comply with a new state law related to utility billing.
For three years, Four Star Realty will be required to maintain photos and records of property inspections and documentation of withholding security deposits, and provide those records to tenants at their request. The company will not be allowed to withhold any money from a tenant’s security deposit unless the amount withheld is directly related to the tenant’s conduct.
This case was referred to the attorney general’s office by the 20th Judicial District Attorney’s Office and led by District Attorney Michael Dougherty.
“The complaint and consent judgment represent the culmination of more than a year’s worth of work by the District Attorney’s Office and the Attorney General’s Office in response to complaints from tenants of Four Star Realty," Dougherty said. "... While the investigation was pending, Four Star took important steps to revise their business practices and implemented measures to better serve their tenants. Through those actions, as well as the measures required by the consent judgment, there is a roadmap and standard for other property management companies. This consent judgment, and the significant restitution to be paid, represent a positive step forward for tenants in Boulder County.”
Consumers who believe they have been unfairly treated by landlords or property management companies should file a complaint with the attorney general’s office.
Four Star released the following statement related to the settlement:
"Four Star strongly denies many of the factual allegations made by the State, including that it engaged in a course of conduct to improperly withhold security deposits. The settlement reads, “Nothing contained in this Final Consent Judgment shall be construed or deemed an admission by Defendants of any wrongdoing or any violation of state or federal law or regulation. Defendants expressly deny any liability or wrongdoing and are entering into this Final Consent Judgment to avoid further inconvenience and costs of potential litigation.
In addition to fact-specific disputes about certain properties, Four Star Realty also disputed the State’s interpretation of legal requirements for the industry. Nonetheless, rather than spend years of expensive litigation defending itself, Four Star Realty decided to put this matter behind it and instead focus on its business, including developing industry-leading processes and controls."
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