GlobeSt.com UPDATE: Gables Settles Class Action Suit for up to $3M in Refunds

BOCA RATON, FL-Palm Beach Circuit Court Judge Jonathan Gerber has approved Gables Residential's settlement of a class action suit brought against the company on behalf of more than 6,000 former tenants. The suit, which was granted class action status by Gerber in December 2004, alleged that Gables charged illegal lease-termination fees. Under the settlement, the locally based multifamily management company agreed to pay up to $3 million in refunds and eliminate $16 million from former tenants' credit reports.

Ted Babbitt of West Palm Beach-based Babbitt, Johnson, Osborne & LeClainche, the law firm that represented the plaintiffs, tells GlobeSt.com, "the settlement potentially affects approximately 12,000 former tenants, who faced fees averaging $1,396. Some paid more; some paid less, and if each claimant collected, the amount due them would far exceed the $3 million," he says.

"However, of the 12,000 letters of notification we sent to former tenants, about one third came back because of a wrong address. The reality is that less than half the participants in such an action make claims, which is why the judge capped the funding at $3 million. If it is wrong," he adds, "the full amount would be prorated among those who do issue claims." Former tenants who think they might be entitled to refunds must make a claim by Oct. 11 this year. The "cleansing" of credit reports applies to former tenants whose credit ratings were negatively impacted by their failure to pay the fees in question to Gables.

The plaintiffs' charges involved "insufficient notice fees," "early termination fees" or "liquidated damage fees," that their suit claimed were in violation of the Florida Consumer Collection Practices Act and the Florida Deceptive and Unfair Practices Act, according to the suit. No judge issued a ruling on the complaint against Gables, and Gables did not admit any illegality.

A similar class action suit against Chicago-based Equity Residential Properties was already under way in a West Palm Beach court at the time Gables' former tenants obtained class action status. In granting the status, Judge Gerber did not rule on the merits of the case. However, in the class action suit against Equity, Judge Susan Lubitz had ruled against Equity for unlawfully penalizing renters for terminating leases or failing to provide renewal notices, a ruling Equity has appealed.

Babbitt and his firm are also representing plaintiffs in the Equity case. Babbitt says Equity issued three non-final appeals, two of which have been denied and another, which is pending." He tells GlobeSt.com he expects both Equity and the class to again appeal "on the basis of a mathematical error made by the court." He believes it will take "over a year" for this case to reach conclusion.