Brockport isn’t the only SUNY community where some unscrupulous college landlords don’t return the students’ security deposit at the end of the school year; even though they are required to do so by law. New York State Attorney General Eric T. Schneiderman recently announced a settlement agreement with a college landlord in Potsdam who had been mishandling security deposits.
Schneiderman announced the settlement agreement with Karl H. Schreyer, a St. Lawrence County college landlord who does business as KHS Rentals. Schreyer owns and operates ten rental properties in Potsdam, renting largely to college students attending SUNY Potsdam and Clarkson University. Schreyer was being investigated by the Attorney General’s office for failing to return tenants’ security deposits. He has agreed to pay $5,000 in penalties and he has consented to a court order directing him to pay a $30,000 judgment.
The agreement settles an investigation by Attorney General Schneiderman’s office probing whether Mr. Schreyer violated two separate, but related, sections of New York State law. The investigation showed that Schreyer improperly commingled tenants’ deposits in his personal bank accounts and that Schreyer failed to return the security deposits to tenants after their leases ended.
“Tenants have a right to their own hard-earned money,” Schneiderman said in a press release. “Likewise, landlords have an obligation to follow the law and not treat security deposits like personal funds. Landlords who fail to uphold that obligation will be held accountable.”
The New York State Attorney General’s office launched the investigation after it received several complaints from former tenants who did not receive their security deposits when they moved out of rental apartments at the end of the school year. According to the Attorney General’s investigation, Schreyer failed to maintain rent security deposits in separate interest-bearing accounts, as required by state law, since at least 2012. Instead, Schreyer has co-mingled the security deposits with his personal funds. Schreyer also failed to return or account for the security deposits of more than 60 tenants and he misappropriated funds to the point where there was a deficit of $30,000 of security deposit monies.
The case was handled by Assistant Attorney General Alicia M. Lendon and Consumer Frauds Representative Michael Sprague of the Attorney General’s Regional Office in Watertown. As part of the settlement agreement, New York State can place a lien on the properties owned by Schreyer as security for the tenants’ deposits. The attorney general has agreed to refrain from filing the property lien for 120 days to give Mr. Schreyer additional time to ensure his company has the funds to properly account for all current deposits.
According to the Tenant’s Right’s Guide published by the New York State Attorney General, “The landlord must return the security deposit, less any lawful deduction, to the tenant at the end of the lease or within a reasonable time thereafter. The landlord is obligated to return the security deposit whether or not the tenant asks for its return.” Schreyer didn’t do that.
The Tenant’s Right’s Guide goes on to explain that, “To avoid any disputes, the tenant should thoroughly inspect the apartment with the landlord before moving in and document any pre-existing conditions. Upon vacating, the tenant should leave the apartment in clean condition, removing all personal belongings and trash from the apartment, and making any minor repairs needed.” Schreyer’s tenants did that, but Schreyer still kept their security deposits.
The Tenant’s Right’s Guide states that, “When problems arise regarding security deposits, tenants should first try to resolve them with the landlord before taking other action. If a dispute cannot be resolved, tenants may contact the nearest local office of the Attorney General.”
In the Rochester are the local office of the Attorney General is located at144 Exchange Boulevard Rochester, NY 14614-2176, (585) 546-7430. The Attorney General’s Rent Security Complaint Form is available online.
The New York State Attorney General’s office investigates complaints that a landlord failed to place security deposits in trust accounts or to pay interest on rent security deposits. The Attorney General’s office also tries to assist tenants who complain that a landlord failed to return their rent security deposit when they tenant moved out.
If, however, the landlord refuses to return the tenant’s security deposit because the landlord says that tenant either failed to pay rent or damaged the apartment, then the tenant must go to Small Claims Court to resolve the dispute. Because many students, especially graduating seniors, don’t want to take the time and trouble to do that, unscrupulous college landlords keep the security deposits, and thumb their noses at the law. Karl H. Schreyer found out that doing so is a big mistake if the Attorney General’s office catches up with you.