A Boulder-based property management company will have to pay nearly $1 million in restitution for overcharging former tenants.
State Attorney General Phil Weiser and Boulder District Attorney Micheal Dougherty announced Tuesday, Jan. 9, 2023, that Four Star Realty agreed to the settlement after the company engaged in illegal business practices.
“Too often, renters are nickeled and dimed and misled by property managers and landlords. When renters move out, they are at a particularly vulnerable time and their security deposits often are not returned to them as the law requires,” Weiser said. “They get mistreated. The law is violated, and that's not right.”
Four Star Realty manages properties in Boulder, Denver, Fort Collins, and Greeley that are often rented by college students. A Department of Law investigation found the company charged tenants hidden fees such as a move-out coordination fee and fees for rekeying doors even when the locks were electronic. Tenants were charged for damages not caused by them and billed for unnecessary work. Security deposits were withheld to cover ordinary wear-and-tear such as repainting and filling holes in walls.
“It's important to remember that security deposits are the property of the tenant, not the property of the managing company or the property owner, It's the property of the tenant that's held in trust by the property owner,” DA Dougherty said. “Landlords are not permitted to use that unless there’s actual cause to do so.”
Four Star Realty denied the State Attorney General’s Office’s allegations of withholding security deposits in a written statement.
“Four Star Realty has always been committed to following industry standards,” said Caldwell Sullivan, the CEO of Four Star Realty. “However, in a time of progressive tenant advocacy that is quickly changing the landscape of property management in Colorado, we experienced scrutiny in this investigation for practices that are widely used in the industry. Industry standards will undergo many changes as a result of these policy decisions. We look forward to leading the industry in adapting to those changes.”
Weiser commended Four Star Realty for their cooperation throughout the investigation and its willingness to make changes to their practices.
“They've also committed to a compliance framework where there will be documenting of all photos and records of any necessary property inspections or any withholding secure deposits,” Weiser said. “And they will make that information available to tenants upon request.”
Coloradans who feel their tenant rights have been violated are encouraged to visit the Stop Fraud Colorado website.
