The Pennsylvania Attorney General’s Office has reached a settlement with a former State College property management company it alleged improperly withheld security deposits for administrative fees, the state’s top prosecutor said on Monday.
A lawsuit filed in 2019 accused Legacy Realty & Property Management of retaining tenants’ security deposits for reasons unrelated to apartment damages and administrative fees of 10 to 30% of all charges. The Attorney General’s Office claimed those were “unfair and deceptive practices” in violation of the Consumer Protection Law and the Landlord-Tenant Act.
The settlement prohibits the company from doing business in Pennsylvania and requires a payment of $17,500 in restitution to be allocated to tenants who alleged improper charges.
Legacy Realty admitted no wrongdoing in the settlement.
While a press release from the Attorney General Michelle Henry’s office said Legacy agreed to close its business as part of the settlement, the company’s attorney, Matthew Haverstick, said Legacy only agreed to a settlement because it was already in the process of shutting down and did not want to incur further expenses defending the suit.
“First, no one admitted liability. While the Attorney General may have charged illegal conduct, we would have proved at trial that Legacy ran a lawful business,” Haverstick wrote in an email. “Second, Legacy was in the process of closing prior to the settlement — in fact, it’s the primary reason we decided to settle now. The Attorney General knew this prior to settlement.”
The lawsuit is one of at least five filed by the Attorney General’s Office during now-Governor Josh Shapiro’s tenure as top prosecutor 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, 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.
ARPM’s attorneys described the lawsuit and others like it as a “shakedown” of private businesses.
In the Legacy Realty case, Henry said the security deposit practices took advantage of Penn State students.
“Some of these tenants were students away from home, on their own, for the first time and signing their first leases,” Henry said in a statement. “I’m thankful to see a positive resolution come from this case. My office won’t allow Pennsylvania students to be taken advantage of.”
To be considered for restitution from Legacy Realty, tenants must file a complaint within 90 days at attorneygeneral.gov/submit-a-complaint.
