A Rockville-based property management company and its owner, Suleman Hooda, were accused of “unfair and deceptive trade practices” by charging tenants illegal fees, failing to properly maintain and return tenants’ security deposits and acting as an unlicensed debt collector, according to Maryland’s attorney general’s office.
On Aug. 31, the Maryland Attorney General Anthony G. Brown announced that the Consumer Protection Division reached a settlement with 786 Property Management, Inc. (which is trading as Real Property Management Capital) and Hooda, who resides in Virginia. The company and its owner must pay restitution and a penalty, a news release said.
“When you are working hard to pay rent and put a roof over your head, every dollar matters. Marylanders need to know that my Consumer Protection Division is here to protect them and their hard-earned dollars, so I am very pleased that the money that was collected as fees and interest will be returned,” Attorney General Brown said in the release.
According to Philip Ziperman, deputy counsel at the Office of the Attorney General’s Consumer Protection Division, RPMC has been around since 2009 and the attorney general’s investigation went on for several years. He did not disclose the number of years of the investigation and said that the attorney general’s office does not discuss why they begin investigations.
RPMC is a franchise of Real Property Management, a national property management company with more than 400 franchises and 250 offices across the United States. Real Property Management provides services to single-family and small multi-family residences and “tens of thousands of properties for individuals, investors and institutions” nationwide, according to the company website.
Ziperman said in RPMC’s case, there were more than 300 different residential units being managed by the Rockville company. Those residences are located in Montgomery County and across Maryland.
An attorney for RPMC and Hooda, Richard Kremen of DLA Piper–a global law firm headquartered in London, England–did not immediately respond to calls for a request for comment.
Under the settlement, RPMC and Hooda agreed to return nearly $150,000 to tenants. According to the release, that amount represents the amount that RPMC is accused of illegally charging or withholding from tenants. The number of tenants that will be reimbursed is not stated in settlement documents.
RPMC and Hooda also agreed to an injunction that requires them to follow the state’s landlord and tenant and debt collection licensing laws and to pay a fine of $50,000–which would increase to $250,000 if the agreement is violated, the release said.
According to Ziperman, the attorney general’s office alleged that RPMC did not have a debt collectors license to collect rent and other various fees for third parties and landlords. As part of the agreement with the attorney general’s office, RPMC has now acquired a debt collectors license and is required to maintain the license, Ziperman said.
The Consumer Protection Division alleged that RPMC and Hooda committed several unfair and deceptive practices such as:
- Charged tenants excessive application fees. According to the release, Maryland law limits an application fee in a multi-unit property to $25 or the landlord’s out-of-pocket expenses processing the rental application, whichever is larger.
- Charged tenants who were late paying their rent excessive late fees and collected court costs when they had not obtained judgments.
- Failed to maintain security deposits they collected in a separate bank account and did not pay interest to consumers when they returned the deposits.
- Improperly deducted amounts from security deposits for damages that constituted ordinary wear and tear, including for routine maintenance expenses.
- Collected rent for landlords without the required debt collector’s license in violation of the Maryland Consumer Debt Collection Act.
Tenants and consumers that were affected by RPMC and Hooda’s improper charging of fees and withholding of funds are owed refunds under the settlement and do not need to do anything to receive a refund, according to the release.
Those with questions about a consumer issue can contact the Attorney General’s Office by calling 410-528-8662 or 888-743-0023.
More information about protections in place for tenants and consumers can call the Consumer Protection Division or download a copy of the Attorney General’s Consumer Guide “Landlords and Tenants–Tips on Avoiding Disputes.”
Additionally, the Attorney General’s Office has a housing unit that is formed specifically to review these types of cases and other landlord-tenant issues, according Ziperman.
“Protecting consumers, generally, and protecting tenants is a priority of General Brown’s. And while he’s Attorney General, we will continue to prosecute these types of cases to make sure that tenants are treated fairly,” Ziperman said.