Office of Maryland Attorney General J. Joseph Curran, Jr.

August 21, 2000 Media Inquiries: Sean Caine 410-576-6357


Baltimore - Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division has reached an agreement with Berkshire Realty Holdings, L.P., a partnership that owns and manages residential real estate nationwide, under which the company will cease charging Maryland residents application fees, cleaning fees and holding fees that the Consumer Protection Division alleged were improper and will pay restitution to thousands of consumers.

Berkshire, a partnership based in Massachusetts, manages residential apartment complexes that it purchased from Gorn Property Management Company located in Baltimore, Silver Spring, Westminster and other Maryland cities. The Consumer Protection Division alleged that Gorn Property Management Company's practice of charging excessive application fees, as well as a holding or reservation fee, violated the Consumer Protection Act. These practices were continued by Berkshire after it purchased its properties from Gorn. Maryland law limits the amounts which consumers may be charged to apply for a residential apartment to no more than $25 or the actual cost for processing an application. Consumers who sought to rent apartments from Gorn and/or Berkshire were routinely charged fees that totaled $135 or more. The Division also alleged that Gorn and Berkshire's practice of charging tenants a non-refundable cleaning fee that averaged between $100 and $125 violates Maryland's security deposit law, which prohibits landlords from charging tenants for damage to a rental premises that would constitute ordinary wear and tear.

Though Berkshire denied that it violated the law, it has agreed to cease charging cleaning fees and to limit the amount of its application fees in Maryland to no more than $25 or its actual costs for processing an application. Berkshire also agreed to refund the excessive application and holding fees that it and Gorn charged applicants, as well as offer its current tenants refunds of the cleaning fees that they were charged. The Division estimates more than 5,000 consumers are eligible to receive refunds of between $100 and $125 from Berkshire. The settlement agreement also requires Berkshire to pay the Division $55,000 in penalties and investigative costs.

"Tenants cannot be required to pay fees in excess of those permitted by law to apply to rent and occupy an apartment," said Attorney General Curran.