AG Gansler Announces Settlement With Property Manager
Pikesville company agrees to return tenants' security deposits
Baltimore, MD (Sept. 26, 2013) - Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has reached a settlement with Pikesville-based American Equity Property Management ("AEPM") and the company's owners, Boris Peters and Michael Klein, resolving allegations that the property management company improperly held tenants' security deposits in its operating account instead of a separate trust account.
"Landlords and their management companies need to be responsible stewards of their tenants' security deposits," said Attorney General Gansler. "This settlement ensures that tenants' hard-earned dollars will be returned to them."
The Maryland Security Deposit Law requires landlords who collect security deposits to deposit the funds collected, within 30 days of receipt, into an interest-bearing bank account that is used exclusively for security deposits. The Division alleged AEPM violated the Consumer Protection Act and Security Deposit Law when it put tenant security deposits in its operating account instead of a separate trust account. As a result, when AEPM defaulted on a loan and its lender seized funds from its operating account, consumers' security deposits were lost to the lender.
The company and its owners deny that they violated any Maryland laws, but have agreed to resolve the matter. Under the settlement, AEPM and its owners agreed to return all of the security deposits they were holding for consumers. The company and its owners further agreed to comply with the Security Deposit Law if they manage residential realty again and to resolve any consumer complaints lodged against them. AEPM and Klein, who was primarily responsible for running the company, also agreed to pay a $15,000 penalty, half of which may be avoided if the company and Klein comply with the terms of the settlement.
Consumers seeking additional information about the settlement may call the Consumer Protection hotline at 410-528-8662 or 888-743-0023.