A Vancouver-based properties company that manages an apartment community in Oregon is not playing by the rules, according to the Oregon tenant-landlord law. For this, a resident at that apartment complex has brought civil litigation against the company, and the lawsuit just recently gained class action status.
The issue centers on the method in which the company issues its forms of security deposits at Stark Street Crossings apartments in Oregon. Prospective residents are asked to either fork over $2,000 for a refundable security deposit, or pay $350 that they will not get back as the premium for a bond. Not only do residents permanently lose the $350, but the New Jersey-based company that issues the bonds can pursue residents for further money if damages to the apartment tally over $350. The company does not offer any cheaper alternatives than these two unattractive offers.
Oregon law specifically lays out what sort of fees landlords can charge their tenants. This list does not include bond premiums. However, a lawyer for the company argued that because the bonds are issued by a third party, it is essentially the same as other services like cable or renter’s insurance.
The lawyer continued by saying that taking out the bond could be advantageous to renters because they can drive down their move-in costs by avoiding the $2,000 security deposit. Many people do not see it that way, though. Not only must they pay the premium to obtain the bond, but they still run the risk of being charged more if the bills runs over $350. This leaves the renter with little, if anything, to gain from the arrangement.
Source: The Oregonian, “Renters’ lawsuit challenges bonds as cheaper alternative to security deposits,” Elliot Njus, Jan. 11, 2012