The Pennsylvania Attorney General’s Office has reached a settlement with a State College fraternity house landlord accused of improperly charging student tenants administrative fees against their security deposits, the state’s top prosecutor said on Friday.
Greek Housing Services will pay $10,000 in restitution to impacted former tenants as part of an Assurance of Voluntary Compliance. It is also prohibited the company from charging the fee against security deposits, must provide a detailed accounting of actual damages charged and is required to return the balance of deposits within 30 days of the end of a lease.
The company charged tenants “room inspection/office time” fees ranging from $22 to $67.50 “any time the tenant had at least one reportable security deposit infraction in either the tenant’s personal room or common area,” at the end of each semester between 2017 and 2021, according to an Assurance of Voluntary Compliance filed in Centre County Court of Common Pleas. The company also provided a general summary instead of actual damages on its security deposit forms.
The Attorney General’s Office claimed those practices violated the Consumer Protection Law and the Landlord-Tenant Act.
“Students are often under financial restraints, and they do not expect their landlord to increase that burden by charging unlawful fees,” Attorney General Michelle Henry said in a statement. “This landlord took advantage of students by requiring that tenants waive rights to which they were lawfully entitled, then proceeded to charge illegal fees.”
Greek Housing Services owns two properties — 328 and 329 E. Fairmount Ave. — which have been rented to various fraternities over the past decade. It also previously managed and subletted to residents 420 E. Prospect Ave. until 2018.
The company denied any wrongdoing in a written statement and said it agreed to the settlement to avoid litigation.
“Greek Housing Services (GHS) strongly refutes the allegations set forth in the Assurance of Voluntary Compliance (AVC),” the company wrote. “However, GHS must also consider the time, energy and expense of defending itself in what would certainly be lengthy, complex litigation. The AVC allows GHS to make a minimal payment and return to focusing on other business matters. GHS has spent the past 27 years cultivating productive, fair and professionally supportive relationships with its fraternity clients and will continue to do so.”
Tenants who resided in the properties between 2017 and 2021 and believe they were charged an administrative fee can submit a complaint with the Office of Attorney General’s Bureau of Consumer Protection online until March 24.
The action is one of at least six taken by the Attorney General’s Office over the past five years alleging similar improper security deposit practices by State College landlords.
While most have settled, Associated Realty Property Management took its case to trial and won. In December 2022, a Centre County judge ruled that ARPM’s practice of retaining security deposit money for administrative fees was lawful and that funds were used to offset actual costs associated with cleaning and repair work, not as an arbitrary surcharge.
