Equity Residential faces class action lawsuit over rental application fees

Radius Koreatown Apartments at 680 S Berendo St (Equity Apartments, Stock. Photo Illustrustration by Priyanka Modi.)

Equity Residential, the Chicago-based apartment investor that dumped some “less desirable” units among its 35,000 California assets, is facing another lawsuit on the West Coast.

The firm, sued in 2017 for questionable late fees, is now facing allegations that it charged five times what it costs to background check potential tenants and violated California law by failing to provide no receipts and copies of its consumer investigation reports.

It amounts to “unlawful conduct,” according to a lawsuit filed in Los Angeles Superior Court. The $50 charged for each request “exceeds Equity’s disbursements for gathering information about each requester.” Equity’s costs for each background check were just $8.50 per request, according to the suit.

The plaintiffs include 135,000 people who applied for housing at Equity’s California properties over the past four years. They are seeking $10,000 in damages for each breach and reimbursement for overcharges and also want an injunction to compel Equity Residential to provide prospective tenants with a copy of their consumer reports within three days.

Equity Residential was sued over similar claims in 2017, when tenants sued the company’s practice of charging late fees, set at $50 or 5% of unpaid rent. The company was accused of accumulating late fees, a practice in which additional penalties were imposed on old or previously paid rent checks, in violation of California’s anti-profit regulations. This case is still pending.

The company recently diversified its portfolio by shedding “less desirable or regulated assets” in California. In August, she sold a portfolio of 450 apartments in Hermosa Beach for $275 million. In its last October quarterly report, the company revealed that its California portfolio totaled 34,587 units in California. This includes 15,739 apartments in Los Angeles and 12,114 units in San Francisco.

Shareef Farag, the attorney for Equity Residential, did not respond to a request for comment.

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