A California-based residential property management company believed to collect rent on at least 200 homes in Illinois has been served with a class action alleging it has wrongly charged excessive fees to tenants late on rent.
On Dec. 30, named plaintiff Clarence Davis Jr., represented by attorneys with the firm of Edelman, Combs, Latturner and Goodwin, of Chicago, filed the complaint in Cook County Circuit Court against the parent company of American Homes 4 Rent.
The complaint named as defendants the corporate entities known as AH4R 1 LLC and AH4R Management – IL LLC. According to court documents, the defendants are based in Agoura Hills, Calif.
According to the complaint, AH4R owns and leases at least 200 homes in Illinois, including in Cook County, and collects rent at an office in Schaumburg.
In the complaint, Davis said AH4R charges tenants several fees if they are late on paying the rent. The fees can include a late fee of $75; an additional fee of $50 if the rent is at least seven days late, ostensibly for the creation of a five-day late notice; and, if the rent is eight days late, an additional $95 fee for service of the five-day notice.
However, the complaint alleged the fees violate both the terms of the contract and of Illinois consumer fraud law. The complaint specifically alleged the fees for the service of the five-day notice are marked up from $10-$30 above what the companies that serve the notices actually charge. And the complaint said the defendants typically apply any payments toward the late fees first, which can result “in a shortage of rent and assessment of further fees.”
Davis, who rented a home from AH4R in Joliet, said he was slapped with all those fees in June 2015, and his payments were wrongly applied first to the fees.
The complaint asked the court to issue an injunction barring AH4R from imposing the fees, and an award of unspecified compensatory and punitive damages for Davis and two classes of additional plaintiffs who would include all others who now rent homes in Illinois from AH4R, and anyone who rented from them in the preceding three to 10 years and were charged the same fees as Davis. The complaint does not estimate how many people might be included in the proposed classes.
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