Attorney General Settles with Three Property Management Companies

Maryland Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has reached two settlements with three companies that own and manage residential apartment complexes in Maryland— Horning Brothers, an Elkton, Maryland based property management company, Winterset Apartments, L.L.C. and Owings Park, L.L.C., which own two apartment complexes in Owings Mills. The Division alleged that the companies violated the Maryland landlord/tenant statute by charging consumers excessive application fees when they applied to rent apartments. The Division further alleged that the three companies improperly deducted fees from tenants’ security deposits if they moved out of their apartments before the expiration of their leases. Lastly, the Division alleged that Horning Brothers violated the security deposit provisions of the landlord/tenant statute by selling consumers surety bonds designed to protect the rental premises from damages instead of collecting security deposits. All three companies denied that they violated the law, but agreed to change their practices and to pay restitution to tenants.

Under the settlements, Horning Brothers, Winterset Apartments and Owings Park agreed to stop requiring tenants who terminated their leases early to pay termination fees and to stop deducting termination fees from tenants’ security deposits. The companies also agreed to stop charging prospective tenants application fees that exceed $25 or their actual costs processing rental applications. Horning Brothers agreed to stop selling surety bonds to consumers instead of collecting security deposits. All three companies agreed to pay restitution equal to the termination fees they deducted from consumers’ security deposits, as well as the amounts they charged consumers that the Division alleged exceeded statutory limits placed on rental application fees. Horning Brothers has also agreed to refund the amounts it received for the surety bonds it sold to consumers. Both companies agreed to pay the Division its investigation costs and $15,000 civil penalties. The amount of the penalty that Winterset and Owings Park must pay will be reduced to $5,000 if they comply with the terms of their settlement.

“Property managers cannot charge consumers fees that are not permitted under the law,” said Attorney General Gansler. “I am pleased that tenants will be receiving refunds and these property managers have agreed to change their practices.”

The settlement concerns the following five apartment complexes:

The Resident at the Manor, 141 Willowdale Drive, Frederick, MD 21702
The Forest, 2012 Baltimore Road, Rockville, MD 20851
Pinebrook Apartments, 2614 Pinebrook Avenue, Landover, MD 20875
Apartments of Winterset, 4700 Winterset Way, Owings Mills, MD 21117
Owings Park Apartments, 9202 Owings Park Drive, Owings Mills, MD 21117

Consumers eligible for restitution under the settlement will be contacted by the Consumer Protection Division. In making today’s announcement, Attorney General Gansler thanked Assistant Attorney General Phil Ziperman for his work on the case.