AG Racine Secures Nearly $2 Million For Victims of Rent Hike Scam and District Through Trial Victory

Property Management Company Used Deceptive Marketing and Leasing Practices to Mislead DC Residents About Apartment Costs and to Unlawfully Increase Rent by Thousands of Dollars

WASHINGTON, D.C. – Attorney General Karl A. Racine today announced that Equity Residential Management, LLC, which manages the apartment complex at 3003 Van Ness in Northwest DC, is paying nearly $2 million to tenants and the District for lying to prospective residents about apartment rental costs and then illegally raising their rents by up to thousands of dollars with almost no notice or warning.

“Every District resident should have access to stable, affordable housing. The majority of landlords treat their tenants fairly and consistent with the law. However, Equity did not do so. In fact, at every step in the rental process, from online advertisements to apartment searches, tours, and applications, Equity misled prospective tenants, ultimately placing them in an impossible financial situation,” said AG Racine. “Residents were forced to choose between paying an unaffordable, unpredictable amount in rent, or leaving their homes. We will continue to hold accountable landlords that prey on residents’ need to find affordable housing.”

The court order concludes a lawsuit filed by the Office of the Attorney General (OAG) in 2017 alleging that, for years, Equity misled and deceived tenants by leasing apartments using an advertised monthly rent that included a discount that was never disclosed. Then, at lease renewal, Equity would notify tenants that their rent was increasing based on the actual rent in the lease rather than the discounted rate that had been advertised and which the tenants were paying. In some cases, this led resident’s rental costs to increase by thousands of dollars per month, in a building that was and is rent controlled. Because of OAG’s lawsuit, Equity now must pay back their tenants for the amount they were overcharged and pay back the District for costs associated with the legal proceedings. 

“We are grateful to AG Racine for standing up for renters and for having the skill and determination to win in court,” said Harry Gural, President of the Van Ness Tenants Association. “This scam traumatized many of our residents, and he came to the rescue when few others even had the courage to call out this illegal behavior. The Attorney General bringing suit forced other major landlords to abandon this method of overcharging tenants, saving renters across the District millions of dollars and sending a clear message to other entities who might engage in similar behavior.”

“This was a clear bait-and-switch,” said Amy Shavelson, a four-year resident of 3003 Van Ness. “Waiting to hear what kind of unreasonable rent increase I’d be subject to and whether I’d be able to afford it was a constant source of anxiety. I felt completely trapped and Equity was unsympathetic and unwilling to negotiate. I’m glad it’s over and am grateful to AG Racine for his persistence and commitment to holding Equity accountable.”

“My wife and I were just starting our careers at the time and were thinking about starting a family, so these unpredictable rent increases were particularly anxiety provoking,” said Josh Sanderlin, a former 3003 Van Ness resident. “This is one of the more predatory practices I’ve seen and trapped a lot of people with nowhere to go into impossible financial situations.”

Following a two-week bench trial, the Court found that Equity’s deceptive leasing practices violated the District’s Consumer Protection Procedures Act. Equity misrepresented or omitted critical information about the accurate monthly rent that would the form the basis of lease renewals. For a while, Equity entirely omitted any indication about its use of concessions on the website. When the company did add details, they made it almost impossible to read or find within the apartment’s advertisements. Leasing agents also told prospective tenants that the apartments were rent controlled and assured them that any rent increases would be within the limits permitted under DC’s rent-control law. Because of Equity’s deception, tenants signed lease agreements expecting to have stable rent in subsequent years when in fact Equity often imposed significant rent increases, depriving tenants of the stable and predictable rent they deserved.

As a result of OAG’s lawsuit, Equity is:

  • Paying $985,122.79 to tenants who were harmed by these unlawful practices, equal to the amount that each tenant was overcharged plus any application fees and 2% interest and
  • Paying $1,010,493 to the District to cover the costs of bringing the lawsuit.

The court order as to remedies is available here.

The court order denying Equity’s motion to reconsider is available here.

Resources for Tenants
In response to the District’s affordable housing crisis, AG Racine is using the law to protect tenants, hold abusive landlords accountable, and preserve existing affordable housing. OAG has won court orders forcing building owners to fix issues including mold, vermin infestations, and fire code violations at properties across the District and secured hundreds of thousands of dollars in restitution for residents who were forced to live in unsafe conditions. OAG has also sued landlords who refused to take basic security measures to keep tenants safe, stopped landlords who illegally converted rent-controlled apartments into short-term rentals, and took action against landlords who discriminated against District residents who use housing vouchers.

Learn more about OAG’s work to preserve affordable housing and find resources to help renters on OAG’s Tenant Resources page.