Four Star Realty to pay $1 million, end illegal tenant billing under agreement with Attorney General Phil Weiser
Jan. 9, 2024 (DENVER)—Attorney General Phil Weiser today announced a settlement with Colorado property management company Four Star Realty, ending a state investigation that found numerous instances of the company illegally charging tenants for routine repairs and other services. Under the terms of the settlement Four Star agreed to pay the state just under $1 million, nearly all of which will be earmarked for consumer restitution.
“Too often, landlords and property management companies nickel and dime tenants by deceiving them into paying for things like normal wear and tear or damage from previous tenants, or by charging fees not reflected in leases,” Weiser said. “For consumers who are able to act effectively as their own lawyers, they may complain and get their money back; most consumers, however, are unable to do so and are mistreated in violation of the law. In agreeing to this settlement, not only is Four Star choosing to do the right thing and reform its business practices, but it is also working with our department to set the standard for fairness and transparency in the industry that others must follow to comply with state law.”
A Department of Law investigation found Four Star, which manages properties that are often rented by college students in Boulder, Fort Collins, Greeley, and Denver, regularly charged tenants for damage they did not cause, billed them for unnecessary work, and charged fees that were not in their leases. Four Star cooperated with state attorneys during the investigation and made several changes to its business practices while the investigation was pending that are now being codified as binding requirements in a consent decree.
In addition to paying restitution, Four Star agreed to disclose all fees, rent, and other costs to tenants clearly on lease documents. The company will also comply with a new state law related to utility billing.
For three years, Four Star will be required to maintain photos and records of property inspections, documentation of withholding of security deposits, and provide those records to tenants upon request. Additionally, Four Star may not withhold any money from a tenant’s security deposit unless the amount withheld is directly related to the tenant’s conduct.
Four Star will also be required to minimize repainting costs related to filling nail holes and other minor damage to paint, as well as determine if any carpet cleaning is actually necessary before charging tenants. The company will be prohibited from withholding rekeying costs from security deposits, and may charge for rekeying only if Tenants choose to have Four Star rekey locks and the costs are disclosed in advance.
Four Star will provide the Department of Law with a list of all tenants who moved out of properties they managed from January 2020 until December 1, 2023. A process for providing restitution to affected consumers will be announced at a later date.
This action is the first taken by the Department of Law after the enactment of a 2022 state law that gives the attorney general authority to bring civil and criminal enforcement actions related to housing statutes and established a Housing Unit in the Department of Law.
The case was referred to the attorney general’s office by the 20th Judicial District Attorney’s Office led by District Attorney Michael Dougherty.
“The District Attorney’s Office prioritizes fighting for consumers in our community,” Dougherty said. “The complaint and consent judgment represent the culmination of more than a year’s worth of work by the District Attorney’s Office and the Attorney General’s Office in response to complaints from tenants of Four Star Realty. I appreciate the collaboration with, and efforts of, the attorney general in serving residents of Boulder County. While the investigation was pending, Four Star took important steps to revise their business practices and implemented measures to better serve their tenants. Through those actions, as well as the measures required by the consent judgment, there is a roadmap and standard for other property management companies. This consent judgment, and the significant restitution to be paid, represent a positive step forward for tenants in Boulder County.”
Consumers who believe they have been unfairly treated by landlords or property management companies should file a complaint with the attorney general’s office.
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Media Contact:
Elliot Goldbaum
Community Education and Communications Manager
(720) 508-6769 office | (303) 990-6691 cell
elliot.goldbaum@coag.gov