Monday, June 27, 2016

Landlord To Pay $8,500 In Fines, Plus Restitution To Customers For Allegedly Using Lease Purchase Deals w/ Illegal Terms To Unload Crappy Homes On Unsophisticated, Credit-Challenged Homebuyers

In Baltimore, Maryland, The Baltimore Sun reports:
  • A Georgia property management company that allegedly included illegal terms in its leases and rented some homes without hot-and-cold running water in Maryland reached a settlement with the Maryland Attorney General's Office to pay restitution and fines and comply with state law.

    Atlanta-based Homes Direct Inc. had at least five properties in Baltimore, according to the settlement agreement.

    As part of the settlement, neither Homes Direct nor its owner Cortland Plichta admitted wrongdoing and the attorney general's office ended its investigation into the company's rental practices. Plichta did not respond to requests for comment.

    The company and Plichta allegedly included clauses and fees in leases that are illegal under Maryland law, according to the settlement agreement. For example, it charged late payments in excess of 5 percent and failed to refund security deposits or properly store the deposits.

    According to the settlement agreement, Homes Direct targeted financially distressed consumers who were unable to qualify or afford traditional mortgages by offering "a lease to purchase program."

    Some properties did not have hot or cold running water and the company did not comply with state lead laws, though no lead was found in its properties, said Christine Tobar, a spokeswoman for the attorney general.

    "All tenants in Maryland have the right to hot and cold running water," said Maryland Attorney General Brian E. Frosh in written statement. "All tenants have the right to know their children are not exposed to lead paint poisoning."

    Homes Direct will pay $8,500 in penalties and fees to the state as part of the settlement. Three tenants of Homes Direct will receive $1,500 each. The company could pay more if other tenants file valid claims, according to the settlement.

    Home Direct also agreed to enter into new leases with its Maryland tenants that abide by state law and to repay security deposits as part of the settlement.
Source: Property management firms settles with Maryland Attorney General's Office.

For the Maryland Attorney General press release, see Attorney General Frosh Announces Settlement With Homes Direct, Inc. (Landlord agrees to stop illegal rental practices and to reimburse tenants).

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