Pennsylvania Attorney General Josh Shapiro
A company accused of levying illegal security deposit charges on tenants at two State College apartment buildings has reached a settlement with the Pennsylvania Attorney General’s Office, the state’s top prosecutor said on Tuesday.
McKinney Properties Inc. — which is incorporated in Florida and headquartered in Pittsburgh — has agreed to pay $25,000 in restitution to former residents of Calder Commons and The Meridian as part of an Assurance of Voluntary Compliance.
Between 2010 and 2016, the company allegedly charged tenants, many of whom were Penn State students, a 15% “administrative charge” on top of all damage, cleaning and painting charges deducted from their security deposits upon termination of their leases. Such charges are illegal under the Pennsylvania’s Landlord Tenant Act, which only permits withholding payments for the actual amount of damages caused by the tenant.
McKinney claimed that the administrative charge was a “fair percentage to recover the costs incurred… to repair damages…” according to the AVC, and therefore had a direct relation to actual damages.
The company’s leases also allegedly maintained the right to withhold up to $100 from each tenant’s security deposit for common area damages unless one or more people accepted responsibility. Collecting charges for damages without proof it was caused by the tenant is illegal under the Landlord Tenant Act.
“Some of these tenants were students away from home, on their own, for the first time and signing their first leases,” Attorney General Josh Shapiro said in a statement. “Schemes like these are Scams 101. My office won’t allow Pennsylvania students like these and others to be taken advantage of; we’re prepared to step up and protect their interests.”
Under the settlement, McKinney is also prohibited from charging administrative fees associated with damage repair, maintenance, painting and cleaning upon tenant move-out. The company is also barred from making deductions from security deposits for damage to common areas without proof it was caused by the tenant.
Restitution will be collected by the commonwealth and distributed to eligible consumers who file a complaint about the administrative charge or common area charge within three months at www.attorneygeneral.gov/submit-a-complaint.
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