A Property Management Company is Being Sued by Tenants Over Credit Retaliation

It’s no secret that many people have struggled to make ends meet since the start of the COVID-19 pandemic and the many lay-offs and furloughs which ensued. The government responded on both a state and federal level to this economic distress by waiving certain penalties for tenants who were unable to pay their rent, in some cases even preventing them from being evicted for reasons related to COVID economics. However, tenants of certain properties controlled by Carnegie Management in New York City filed a class action lawsuit against the management company, claiming that it engaged in unfair and deceptive business practices violating COVID tenant protections.

The lawsuit alleges that Carnegie Management retaliated against tenants by reporting unpaid debts to credit bureaus.

Part of the complaint relies on New York Gov. Andrew Cuomo’s order that landlords and property managers would not be allowed to charge or accept fees and penalties related to late rent payment at least from March 2020 to August of 2020. Allegedly included in Carnegie Management’s reports of its tenants’ unpaid rent to the credit bureaus, they also include unpaid late fees and penalties which should not have been charged in the first place.

Reporting inaccurate debts to credit bureaus is illegal and can be extremely harmful to a person’s financial and living opportunities. It should also be noted that retaliating against tenants for collecting in an organized group to address leasing issues is illegal.

The tenants believe this attack on their credit score is retaliation for organizing.

One year prior to the filing of this lawsuit, many of the tenants residing in Carnegie Management’s properties formed an organization and hired legal counsel to ensure that their homes were property protected amidst the economic chaos of the pandemic. The property management company reportedly refused to collaborate with the tenant organization to seek a mutually acceptable solution. The lawsuit claims the property management company not only refused to bargain with the tenants collectively but also continued to bypass the organization’s lawyer to contact individual tenants with threats of credit referral the plaintiffs believe to be willful intimidation.

Carnegie Management claims that the dispute arose from some tenants’ dissatisfaction with existing COVID relief offers.

Representatives from the property management company claim that they, like many others, offered financial relief services to their tenants to ease the economic burden of the pandemic, but that some tenants were simply dissatisfied. So far, their defense seems to rely on the idea that certain tenants are attempting to take advantage of the COVID eviction moratorium, refusing to pay rent even if they are financially able to.

This is unlikely to be the last lawsuit of its kind between tenants and property management companies.

Landlords, property management countries, and tenants across the country are still trying to figure out how past and current COVID legislation applies to their homes and properties. While unscrupulous individuals will likely always try to work the legislation to their advantage on both sides of things, there can be no denying that many people, families, and businesses are hurting from the economic effects of so many job losses. Lawsuits like these will likely pave the way and act as an example of what future tenants and landlords pursuing litigation can expect.