UDR Class-Action LawsuitJune 3, 2009 — badbizfinder

CONSUMER ADVOCATE FORMS CLASS ACTION LAWSUIT

AGAINST LANDLORD, UDR, ON BEHALF OF CA TENANTS

June 5, 2009

Bad Biz Finder, a Fremont, California-based consumer advocacy group founded in 1982, announced today the initiation of a Federal Class-Action Lawsuit against UDR, Inc. A class-action lawsuit is a civil action in which people who have been wronged in a similar way unite and sue as a group.  

In this case, the group is UDR tenants in California from June, 2007 to the present – and the “wrong” is UDR’s Residential Lease Agreement (“RLA”) containing numerous violations of California law.  There is no cost for you to participate in this action.   

Any clause in a California RLA that asks you to waive your rights under the law and to agree to the contrary, is unenforceable. This is the driving force behind the lawsuit as well as the fact that UDR has deliberately capitalized monetarily on its tenants’ ignorance of the law. (California Code of Civil Procedure section 1670.5(a) and California Civil Code section 1953.)

Although this action is based on California law, it must be brought as a federal action because (1) The amount in controversy exceeds $5,000,000; and (2) all members of the class to be certified are citizens of a state different from the Defendant, UDR, that is based in Colorado and is incorporated in Maryland.

Erin Baldwin, a current UDR tenant, brought these issues to the forefront through her group and blog, Tenant Advocates of Orange County and she will be the primary advocate for this action.  Our groups are now working as one to compel UDR to reimburse past and present tenants for monetary damages suffered from UDR’s intentional and malicious violation of California law.  These are the preliminary causes of action:

UDR Charges Early Lease Termination Liquidated Damages in Violation of the Law

California Civil Code section 1671 states that liquidated damages clauses in California residential lease agreements are illegal.  However, UDR requires that its tenants (1) waive their legal right under this law; and (2) agree to pay a liquidated damages fee equal to 2-1/4 times their base rent if they must terminate their lease early.  Essentially, what UDR wants you to believe is it will take 68 days (2-1/4 months) to re-rent your apartment.

In 1978, liquidated damages clauses were deemed illegal because landlords were distorting the true legal purpose or these clauses:  To set a flat fee when it’s impossible to determine the monetary harm that could result from a breach of the contract.  This doesn’t apply to UDR.  They know (within a slim margin) how long it’s going to take to fill a vacant apartment as they use these statistics everyday to project sales and calculate expenses. 

In order for UDR to maintain its average 95% occupancy rate, it must fill a vacancy within 18 days; so, 50 of the 68 days they’re charging tenants to move out early is earning a double rent – a violation of the law.  If it actually took UDR 68 days to re-let your apartment, they would have been out of business long ago.

Also, California law states that liquidated damages may not be used as a penalty, or fee provision: “Where a liquidated damages clause is seen as a penalty rather than an effort to agree upon a reasonable amount of estimated damages, the clause will not be enforceable.”

UDR Charges Late Fees That are Incorrectly and Illegally Calculated

As a result of a precedent-setting case, Orozco v. Casimiro [(2004) 121 Cal.App.4th Supp. 7], California deemed “late fees” within rental agreements to also be illegal liquidated damages. Landlords can collect late fees.  The law just mandates the amount and manner in which they are to be calculated (California Civil Code section 3302).  It states that the late fee amount cannot exceed the standard interest rate of 10% of the base rent (noncompounded) or 1/3650th of the base rent. 

For example, if your base rent is $1,700, the daily interest would be $.47 per day (3650 divided by 1700) with a maximum late fee charge of $14.10 for any given 30-day period.  UDR charges a flat fee of $50.00 which, according to California law, is illegal and as such, you are entitled to a refund of the difference.

UDR Intentionally Contracts with Tenants Using a False Name to Obtain & Sustain a Legal Advantage Over Tenants Resulting in Significantly Diminished Tenant-Based Litigation

UDR fails to properly identify the legal name of “Landlord/Owner” in its California RLAs, rendering the RLA invalid. For example, the legal name of the property, Villa Venetia, is “UDR Villa Venetia Apartments, L.P,”  however UDR’s RLA for that property identifies its legal name as “Villa Venetia.”  This name is not only inaccurate; it’s no longer a valid legal entity. Rather, it’s an expired fictitious business name that belonged exclusively to Vista Del Lago, LLC, the former owner of Villa Venetia.  According to the Orange County Recorder’s office, the name expired on August 20, 2006 and UDR has knowingly and fraudulently used it to contract with tenants since the date it purchased the property in 2004. A similar set of facts applies to all California UDR properties.

In addition, UDR fails to state the name, address and telephone number of the Agent for Service of Process on the face of its RLA as required by California Civil Code section 1962.  An Agent for Service of Process is a person or company to whom a tenant would serve a lawsuit against UDR. 

UDR Illegally Profits From Its Ratio Utility Billing System (RUBS) in violation of the California Public Utilities Commission (CPUC) Prohibiting a Non-Utility From “Selling” Energy and Water

Via its Ratio Utility Billing System (RUBS), UDR defers the cost of utilities to its tenants for common areas, vacant units during repair and cleaning, leasing offices, swimming pools, property lighting, property waterway irrigation and landscaping as well as multiple common laundry facilities on each property. 

There is no logistical need to do so as there are numerous residential energy meters at each property.  In addition, UDR enjoys another double revenue stream by not only charging its tenants to source the energy and water being supplied to the onsite public laundry rooms but also charges them to use the coin-operated machines.

UDR’s California RLA sets forth a RUBS calculation that is incomprehensible due to the fact that it contains multiple variables outside the control or knowledge of its tenants.  UDR requires that its tenants agree that the following formula is fair and equitable: 

“Total monthly utility cost for the community (minus an allowance for common area use if applicable [which is not applicable in the present case]) divided by the number of persons residing at the community times the number of persons residing in the Premises using the applicable ratio multiplier [1 person = 1; 2 persons = 1.6; 3 persons = 2.2; 4 persons = 2.6; 5 persons = 3; each additional person, add..4 to the multiplier.]”

UDR Illegally Defers Injury Liability via Its “Hold Harmless” Clauses in Violation of California Law and Fails to Maintain Habitable Premises

UDR’s California RLA contains several “hold harmless” clauses creating a perception of justifiable negligence in its failure to maintain habitable premises including, but not limited to, vector control, water quality, construction defects, and tenant and guest safety standards for security, unit and vehicle intrusion, sexual offenders, theft, and violence. 

According to California Civil Code section 1668:  “All contracts which have for their object (directly or indirectly) an attempt to exempt anyone from responsibility for his or her own fraud, willful injury to the person or property of another, and/or a violation of law (whether willful or negligent) are against the policy of law.”

UDR Withholds Security Deposit Sums Via Illegal Fees and Penalties Deferred to Tenants That are Actually Landlord’s Operating Costs and May not Be Deferred

UDR’s California RLA Paragraph 37, “Resident’s Other Liabilities,” contains the following language:  “In addition to all other obligations of Resident and remedies of Landlord under this Lease and the law, and to the fullest extent lawful, Resident shall be liable to Landlord for charges including, but not limited to those, for the following:”

Then it lists sixteen (16) items that constitute fees and penalties that may be deducted from a tenant’s security deposit.  These items are clearly within the scope of UDR’s operating costs and responsibilities as a Landlord and constitute illegal deductions from a tenant’s security deposit.  (California Civil Code section 1950.5)

UDR Illegally Evicts Its Tenants

Tenants that have been or are presently in the process of being evicted under the terms and conditions of UDR’s California RLA have significant defenses against this eviction.  If the terms and conditions of the RLA are deemed illegal under California law, then UDR will have difficulty evicting a tenant those illegal terms and conditions.

NOTICE TO TENANTS

If you have an interest in participating in this Federal Class-Action Lawsuit, please contact Erin Baldwin via the following three methods:

1.    Via email at badbizfinder@gmail.com

2.   Via telephone at 714-617-4703 

3.   Via a comment on our mutual blog at http://badbizfinder.wordpress.com.

She will email you an Intake Questionnaire to certify you as a member of the action. 

Once the questionnaire is completed, signed, and the original is retuned to Erin Baldwin at 2775 Mesa Verde Drive East, M102, Costa Mesa, California  92626 either via mail or drop off, you will be included in the action.

Please be advised that we are in the first week of this action and as such, have a lot of work ahead of us to contact all current and past UDR tenants in California.  You can help speed the process by helping out by:

1.         Distributing flyers in your complex.

2.         Contacting previous tenants of UDR.

3.         Enhancing the internet exposure of our cause by way of e-media resources or SEO talents you have.

4.         Helping in the administrative organization of this action.

5.         Being an alternate contact person for your complex.

6.         Participating on the UDR Class-Action Lawsuit Committee.

We are a non-profit organization and only accept donations of time, office supplies, postage, printing and marketing services.  We don’t accept cash donations and believe that the best gift you can give us is your time to aid us in furthering our goal of creating a more equitable and fair environment for California tenants.