BALTIMORE (Legal Newsline) - Maryland Attorney General Douglas Gansler announced a settlement Thursday with a Pikesville-based property manager and its owners to resolve allegations that the company improperly held security deposits in its operating account.
American Equity Property Management and owners Boris Peters and Michael Klein allegedly violated the Maryland Security Deposit Law by failing to hold tenants' security deposits in a separate trust account. The law requires landlords collecting security deposits to deposit the collected funds into an interest-bearing bank account used exclusively for security deposits within 30 days.
"Landlords and their management companies need to be responsible stewards of their tenants' security deposits," Gansler said. "This settlement ensures that tenants' hard-earned dollars will be returned to them."
Gansler's Consumer Protection Division alleged that AEPM violated the Consumer Protection Act and Security Deposit Law when it put tenant security deposits in its operating account. When AEPM defaulted on a loan, its lender seized funds from its operating account and consumer security deposits were allegedly lost to the lender.
Under the terms of the settlement, AEPM and its owners will return all of the security deposits they were holding for consumers, comply with the Security Deposit Law if they manage residential realty in the future and resolve any consumer complaints filed against them. AEPM and Klein agreed to pay a $15,000 penalty, half of which will remain suspended if the company and Klein comply with the settlement terms.
AEPM and its owners denied violating any state laws as part of the agreement.