Over 50% of Austin\’s population are renters and it is well known that Austin rents have skyrocketed. Over 50% of Austin renters are considered \”rent distressed,\” meaning they spend over 30% of their income just on rent.
the Snell Law Firm along with two other law firms have filed a motion for class certification in the Western District of Texas to help over 13,315 renters at Colonial properties who were assessed and paid unlawful water connection or utility activation fees. Each class member could recover a civil penalty equal to three times the amount of the overcharge, one month’s rent, plus reasonable attorneys’ fees. Defendants’ potential exposure exceeds $13 million.
The Defendants are Mid-America Apartment Communities, Inc. and Mid-America Apartments, LP (“MAA”). In 2013, MAA and Colonial Property Trust and/or Colonial Realty Limited Partnership and its subsidiaries merged into MAA. Pre-merger, at move in, using a “Reservation Agreement,” Colonial assessed new Texas tenants unlawful water fees from at least November 2010 until early 2014. After the merger, several emails between MAA employees and its third-party utility billing company confirm that MAA was advised that Colonial’s water account activation fees were unlawful in Texas.
In discovery, MAA admitted the fees were not pass-through charges. Defendants were familiar with the Water Code Statute and Rules as evidenced by (a) numerous water billing registrations and filings; and (b) inclusion of language from the statute and rules in its form lease. Despite this, Colonial initiated the Water Connection Fees anyway beginning in 2010 or earlier. MAA’s corporate representative testified the fees were deliberately charged and Colonial never indicated they were a mistake.
Added surcharges for water are illegal under the Texas Water Code; which prohibit an apartment house owner from imposing any extra charge above the cost per gallon and any other applicable taxes charged by the public utility to the owner. An owner may not add its own fees and surcharges for water and billing, and an owner is prohibited from passing-on third-party biller fees to a tenant since a public utility does not impose those fees.
Lawyer for the plaintiffs, Jason Snell, said, “This case focuses on one of the largest landlords here in Texas that was too aggressive with its fees and ran headfirst into a Texas statute designed to protect vulnerable tenants from water utility billing abuse.”