***FOR IMMEDIATE RELEASE***
May 19th, 2015
Right to Housing Alliance Members Settle Lawsuit Over Sage Management’s Collection Practices
Sage Management agrees to $1M settlement and an end to “fee churning” scheme.
Contact: Jessica Lewis
Right to Housing Alliance
Today, in Baltimore, the power of organized people prevailed over the power of organized money. After nearly two years of resident organizing and legal advocacy, Baltimore property manager, Sage Management, LLC, agreed to a settlement in a class action lawsuit brought by three Right to Housing Alliance Members and filed by The Public Justice Center. This is a major victory for at least 1,872 current and former tenants of Sage Management, and proves the power that tenants have when they fight collectively for their human rights to affordable, equitable housing.
The suit alleged that Sage Management had been engaging in billing and collection practices that violated State consumer protection laws, and a Maryland law that caps late fees at five percent of the total monthly rent.
The plaintiffs, Detrese Dowridge, Shonda Billings, and Trachell Speaks claimed that abuses such as charging of illegal “agent” fees in the suite of late charges, hiding illegal fees on tenant ledgers, misapplication of tenants’ rent payments to mask illegal fees, and intentionally misleading tenants on “pay-to-stay” notices, are part of an overall predatory accounting scheme aimed to keep tenants continually paying more fees. They estimate that among the 200-250 tenants that Sage routinely drag through Baltimore City’s District Court for non-payment each month, these fees and associated charges netted Sage over $10,000 per month. Including court costs, this is an additional burden of over $15,000 per month ($67 per tenant) on tenants who are already struggling to afford rent in Baltimore City.
In January of 2014 over fifty tenants of Sage Management properties around Baltimore City sent a certified letter to Gil Horwitz, owner of Sage Management, requesting an “end to accounting practices that we believe are predatory and/or in violation of City and/or State laws. Additionally, conditions issues in your properties are causing threats to our life, health, and safety, and we feel that you and your staff have not been responsive in addressing these complaints.” They went on to list the accounting practices outlined above, to demand a full audit of all tenant ledgers and repayment of illegal fees, and property-wide mold and pest remediation. They received no response from Mr. Horwitz.
Today, with the Circuit Court’s preliminary approval of the settlement, the tenants have secured relief to stop those alleged bad practices, and many present and former Sage tenants will receive $200,000 in compensation and $$794,000 in debt forgiveness.
With consistent pressure from Right to Housing Alliance through call-ins and pickets at District Court, and diligent legal work by the Public Justice Center on the class-action suit, Sage Management has agreed to no longer charge so-called “agent fees’ or other disputed fees. It will stop misallocating rent payments, and further, it will stop sending out misleading “pay and stay” notices, which contributed to tenants overpaying to stay in their homes.
Right to Housing Alliance is proud of the agreement reached between tenants and Sage Management, and are looking forward to continuing conversations about tenants’ rights at all Sage Management properties, regarding the Renters Bill of Human Rights.
Lead plaintiff, Detrese Dowridge says of the victory, “I feel like we got a lot accomplished and that if we open the door to change things with current and future tenants. Hopefully it’s a wake up call to other landlords that when tenants organize we can win, and that there’s strength in numbers. I’m proud of all of us for just being able to stand up for tenants’ human rights to housing, and to not give up.
Next we’ll keep organizing and trying to Sage Management to sign the Renters Bill of Human Rights, and trying to get people together to fight for the human right to fair, adequate housing.”
The case is Detrese Dowridge, et al. v. Sage Management, LLC, Circuit Court for Baltimore City, Case No. 24-C-14-001223. The class plaintiffs are represented by the Public Justice Center, a non-profit legal services organization, and the law firm Goldman & Minton, P.C.