November 21, 2019
OAG Settlement Holds District Landlord Accountable for Violating Lease Agreements with 470+ Low-Income and Vulnerable Tenants
WASHINGTON, D.C.– Attorney General Karl A. Racine today announced that the owner of Park 7 Apartments will refund at least $450,000 to more than 470 current and former tenants who were improperly billed for water. This settlement resolves an investigation by the Office of the Attorney General (OAG) into allegations that Park 7 Residential, L.P., charged tenants for water despite lease agreements stating that the cost of water was included in rent. It also resolves allegations that Park 7 misled tenants about utility expenses and deceived them about changes to lease terms related to utilities in lease renewals. The settlement will provide full restitution for all Park 7 tenants who were improperly charged for water, many of whom are low-income, senior citizens, or people with disabilities. Park 7 will also be required to pay the District more than $200,000 for costs and expenses related to its investigation and submit reports about water billing at the property to OAG for the next two years.
“When a landlord or property manager promises to include the costs of utilities, including water, in the base rent, they must honor their promise to tenants,” said AG Racine. “The Office of the Attorney General is pleased to announce that Park 7 will reimburse tenants for water bills that the landlord promised to pay. We thank the Park 7 tenants for bringing their concerns to OAG, and we stand ready to investigate and prosecute landlords and property managers who fail to honor their most basic promises to tenants.”
Park 7 Residential, L.P., is a Maryland-based corporation that owns and operates Park 7 Apartments, a residential building located at 4020 Minnesota Ave. NE in Ward 7. The building was constructed in 2014 and 362 of its 377 apartments are designated as affordable housing units.
OAG investigated several complaints from Park 7 tenants regarding the landlord’s water billing practices since 2014, and alleged that Park 7 violated the District’s Consumer Protection Procedures Act by:
Improperly billing tenants for water: Park 7 charged tenants for water despite stating in lease agreements that water was one of the services that was included in the rent. Language in the leases said the owner/landlord was responsible for providing major appliances, water, and trash collection services, while tenants are responsible for the cost of other utilities, like electricity and gas. However, Park 7 billed tenants for water usage through a submetering company. Tenants, fearful that their water would be shut off or that they could be evicted, paid their bills.
Misrepresenting the true cost of housing to potential tenants: Park 7 made representations to potential tenants that the cost of water would be covered by their rent and thus led consumers to believe that costs associated with renting apartments were lower than they actually were. The cost of utilities, and whether utilities are included in rent, can impact decisions about where tenants—especially low-income tenants—can afford to live.
Misleading tenants about the terms of lease renewals: Since at least 2017, Park 7 offered tenants lease renewals with modified language, shifting the responsibility for paying for water from the landlords to the tenants. However, Park 7 did not explain these changes, and their representatives allegedly told tenants that the new leases would not be different from the old ones.
Settlement Agreement
Under the terms of the settlement agreement with OAG, Park 7 is required to:
Pay an estimated $450,000 in restitution to harmed tenants: Park 7 will be required to return the full amount of money it improperly charged more than 470 current and former tenants for water since the building opened in 2014. This means that Park 7 will repay eligible tenants—those who moved into the building and signed their original leases between 2014 and May 1, 2017—the amount the tenants paid to Park 7 or its water submetering company for all costs associated with water usage (including interest, late fees, sewer fees, etc.). Park 7 will notify eligible current and former Park 7 tenants by mail about this settlement and provide information about the claims process within 90 days.
Wipe out any debts and remove negative credit entries related to water billing: Park 7 must forgive and not collect on any outstanding debt resulting from affected tenants’ non-payment of water bills. Park 7 must also reach out to any collections agencies working to collect on water bill debt. The company must also work to remove any negative credit report entries made by Park 7 or its agents against tenants related to unpaid water bills.
Pay the District over $200,000 for costs associated with its investigation: Park 7 will be required to pay the District at least $202,725 to cover costs and expenses of its investigation. If Park 7 fails to make the restitution payments on time as required by the settlement, they will owe the District an additional $274,250.
Report details of water billing to OAG for the next two years: Park 7 is required to test its water metering system, fix any issues, and report findings and actions taken to OAG within 120 days of the settlement. Then, Park 7 must conduct audits of water-metering and water-billing practices at the property and report on these audits to OAG each year for the next two years.
A copy of the settlement agreement is available at: https://oag.dc.gov/sites/default/files/2019-11/Park-7-Consent-Order.pdf
Current or former Park 7 tenants who want more information about the settlement can access OAG’s factsheet and may call OAG’s consumer protection hotline at 202-442-9828 or [email protected].
Resources for Tenants
OAG works to make sure residents across the District have access to safe and affordable housing and holds landlords accountable if they violate the law. Access OAG’s resources to help renters and tips on how to report problems with your landlord or your housing conditions. To report scams, fraud, or unfair business practices, you can submit a consumer complaint to OAG by calling (202) 442-9828 or online at oag.dc.gov.
Content retrieved from: https://oag.dc.gov/release/ag-racine-announces-owner-park-7-apartments-will.