[RPPTL LandTen] "Risk Mitigation Fee"

[Harry Heist]

I tell my clients to NOT charge a fee for making a claim on the Security Deposit and to NOT charge the tenant for the certified mail postage but I have nothing to back up why I am telling them this other than I feel it is unconscionable.

 

It does not seem fair that the tenant is charged for something the landlord is required to do and send by law.

 

I really would not like to see this decided in a class action. 

 

Is something like this allowed in other areas of law like foreclosures?

 

Yates v. Equity held that if it was not allowed in the Act, it was NOT legal as it pertained to termination fees. The only reason they are allowed now is because of the law change that specifically allows it.   Prior to Yates, EVERYONE was charging termination fees and forfeiting security deposits for lease breaks. Yates rocked the multifamily housing industry.

 

For anyone that was not around when Yates went down, that was a major case. Millions were paid out in that case and all the others that were settled.

 

How far do we take this?

 

Are there any hard core consumer law lawyers and FCRA and FDCPA lawyers out there that will know whether “risk mitigation fees” are allowed?

 

I am really at a loss to advise clients and this stuff is spreading so fast. 

 

Harry

 

LAW OFFICES OF 
HEIST, WEISSE, & WOLK P.A.
PH: 1 800 253 8428
FAX: 1 800 367 9038
"Serving the Property Management Professional"
Website:  www.evict.com <http://www.evict.com/>  
Email: harry at evict.com

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From: landten-bounces at lists.flabarrpptl.org [mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Leonard Cabral
Sent: Saturday, October 26, 2019 12:21 PM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] "Risk Mitigation Fee"

 

I am now seeing a fee for handling the security deposit. Any thoughts about the legitimately of that fee? 

 

Sent by Leonard P Cabral 





On Oct 25, 2019, at 10:59 AM, Harry Heist <harry at evict.com> wrote:

 

It seems like each day property managers are coming up with fees that I believe will eventually cause a problem and be class action material. 

 

They are spreading as these managers are on all of these Facebook groups, someone says they are doing it and then everyone thinks it is OK.

 

The latest one I have been seeing is a “Risk Mitigation Fee”.

 

This is a nonrefundable fee that the higher risk tenant (bad credit, bankruptcy, eviction etc) is being asked to pay as part of being approved.

 

Often this “fee” is being kept by the property manager, split with the owner or given to the owner.  More often than not, kept by the property manager.

 

Does anyone have any info on the legality of this?

 

In the money lending world, creditors are free to charge a higher interest rate to a higher risk person but this now????

 

Harry

 

LAW OFFICES OF 
HEIST, WEISSE & WOLK P.A.
PH: 1 800 253 8428
FAX: 1 800 367 9038
"Serving the Property Management Professional"
Website:   <http://www.evict.com/> www.evict.com 
Email:  <mailto:harry at evict.com> harry at evict.com



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