New York Attorney General Cuomo Stops Real Estate Company’s Illegal Tactics With Fredonia College Students

Owner of Fredonia rental properties to refund charges; pay $20,000 in fines/costs, reform practices

ALBANY, NY (July 5, 2007) – New York Attorney General Andrew M. Cuomo announced a settlement with the owner of three Fredonia apartment complexes which failed to return security deposits to area college students and charged illegal fees for carpet cleaning.

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"The Attorney General’s Office has put an end to many of the corrupt practices in the college loan industry and we will make sure it does all it can do make sure students are not taken advantage of by unscrupulous landlords,” said Russell Ippolito, Assistant Attorney General In-Charge of the Buffalo Regional Office. “This real estate company was targeting students with unfair charges and contract language. With this settlement, we are protecting students from being preyed upon."

In late 2006, the Attorney General’s Office began investigating Winter Palace Associates of Parsippany, N.J., after receiving multiple complaints from area college students who resided at Brigham Road Apartments (140 units), Campus Edge Townhouses (42 units) and Temple Street Townhouses (18 units), located near SUNY Fredonia. The complaints indicated that Winter Palace was delinquent and problematic in returning security deposits to tenants, charging mandatory carpet cleaning fees and committing other violations of state laws designed to protect tenants. As part of today’s settlement, Winter Palace will pay a fine of $15,000 plus costs of $5,000. In addition, the company will pay $2,625 in restitution for the carpet cleaning charge paid by 104 former tenants (one tenant paid $50.00, the other 103 paid $25.00).

The Attorney General’s investigation found some tenants’ security deposits were never recorded or placed in a trust account, as required by law. Additionally some tenants were charged the mandatory carpet cleaning fee, regardless of the condition of the carpets when their leases terminated. Also, the language in the company’s leases prohibiting subletting was found to be illegal.

In the settlement, Winter Palace agreed to ensure all tenant security deposits are placed in an interest-bearing trust, revise its lease language, remove the deduction for a mandatory carpet cleaning, permit subleasing and clearly disclose to tenants that they may choose one of three methods of receiving interest earned on their security deposits.

Attorney General Cuomo urges all renters to review his office’s Tenant’s Rights Guide, available online at http://www.oag.state.ny.us/realestate/tenants_rights_guide.html .

The case was handled by Assistant Attorney General Dennis Rosen and Senior Investigator Peter Eiss assisted in the investigation, which was conducted under the supervision of Russell Ippolito, the Assistant Attorney General In-Charge of the Buffalo Regional Office.

Source: New York Attorney General