A South End developer that created the trendy SoWa district now finds itself with a major legal headache, one expected to cost it well over $100,000.
Hundreds of former South End tenants of GTI Properties stand to get cash back from the real estate firm as part of a proposed settlement of a class-action suit, according to Matthew Tuccillo, an attorney at Shapiro Haber & Urmy, which represented the tenants.
Roughly 850 former tenants will split $105,714 under terms of the settlement, expected to be ratified next month in court.
Last year, GTI shelled out another $26,088 in interest owed to then-current tenants, Tuccillo said.
How did this happen?
If you rent, your landlord can collect a month’s security deposit, as well as last month’s rent, from you, when you move in. The landlord has to pay you interest on those funds.
GTI never paid the interest earned, to its tenants, when they moved out. It also never told tenants that they were due this money (it should be part of the standard lease, signed by landlord and tenant, when the lease begins).
Your landlord has to pay you the market rate interest on those funds. whereas, in the old days, landlords had to pay 5% interest, no matter what, even if the money was earning less.
Interest rates have been really low, the past several years, so the actual dollar amount that GTI would’ve had to pay each tenant would have been low, HOWEVER, because they were sued, they had to pay TRIPLE damages.
GTI tenants to get $105G back: S. End developer to pay rent interest – By Scott Van Voorhis, The Boston Herald