There's a fine line between legal and ethical and LRS Realty and Management Inc. Is riding it. LRS is a Canoga Park privately owned real estate, property management and marketing business that is ripping off hard-working people without regard.
Their website proudly touts their management tactics to home owners looking for property management services.
Realize the strong financial rewards you will see with our aggressive marketing tactics and hands-on style..., says one line on their home page.
They continue by promoting their cost gouging techniques, We continuously focus on achieving above market rents, collecting all rental income (including any late or miscellaneous fees)
While getting more money for rent and having an aggressive company working on your behalf may sound good to home owners it sure doesn't bode well for tenants, especially in these tough economic times.
One anonymous tenant residing in an LRS managed Los Angeles apartment complex reported in May of last year that he was charged retroactive late fees after moving out, of which he had no prior knowledge.
They ask you to pay the rent by the 1st of the month with no grace period, said the tenant. They do not offer a drop box on site and the nearest office drop is 35 miles away. I can understand being charged a fee if it's late, but they don't tell you there's a fee until you're waiting to get your deposit back.
They work under the mindset that their tenants do not have the finances or education to fight them legally, adds the tenant. They don't even provide proper maintenance to their properties.
Without any of this knowledge, my husband and I, with 10-month old baby in tow, left a $1000 deposit and signed a one-year lease to rent a home in the Santa Clarita area. LRS was the property management company for owners Albert and Julia Karapetyan, who also own a Shooters billiards business in Newhall. Kyle Smock was the LRS agent in charge.
The lease was to commence three weeks after we signed it, but one week before commencement, my husband and I unexpectedly found a home more suitable for our family. We immediately notified Smock with full disclosure of the situation and asked what could be done. After emails and phone calls went unreturned, we began to worry.
After consulting an attorney, I was told we could be held liable for the lease agreement until LRS got new tenants in there, regardless of never taking possession of the home. We proactively advertised the property ourselves, since it was in the best interest of all parties involved to get people in there right away. We referred at least 10 interested renters to Smock. Still no returned phone calls or emails.
Finally, at the end of the month and after our lease start date, Smock answered his phone accidentally I suspect. He indicated new tenants were moving in on the first of the month and that we would likely be held accountable for the duration of our lease for the remaining 7 days of the current month, or a total of $535.50. Ouch. We're not the kind of people that skip out on our responsibilities, so we accepted that this might have to be the case, but hoped it wouldn't.
In the meantime, we were buying groceries on credit because it took everything we had to move into our new home. We finally received an email from Kyle on the 3rd of the month asking for our address and stating he was sending us a check in the next day or so. I replied to his email with a request for a signed document relieving us from all responsibility to the home, the cost breakdown they were operating off of, weather or not the new tenants were from our referrals and what the amount of the refund was going to be. No reply.
A week later, I left a follow up message - no response. Finally, 32 days after we gave our notice, we finally got a check. It was folded in half, the only item in the envelope. The refund was only $388 out of the $1000 we gave them, and there was no paperwork reflecting any calculations or surrender of lease paperwork removing our continued liability to the property as we requested.
LRS kept $612 of our deposit for a home we never took possession of, never got the keys to and never moved in to, regardless of the fact that they had new tenants move in. They didn't even extend the courtesy and professionalism to return calls or emails, despite our efforts to mitigate their expenses by giving them as much notice as possible, being honest and providing several possible new tenants in our place.
After doing some math myself, I discovered LRS also billed us for a total of 8 days, not the 7 days the lease held us accountable for. I called them to find out why the extra day, this time calling the owners themselves, Alec and Gayle Bernstein. First, they told me I was lucky to get any money back. I was also told they didn't know why we were billed the extra day, but assumed it was because the new tenants didn't move in until Mar 2. Since they rely so heavily on legalities, one has to ask how they justify passing off assumptions as adequate answers to legitimate questions. I never got an answer.
Is this all legal? I'm told, overall, that it is. Both a real estate attorney and a property management expert said that a lease is binding when mutually executed, regardless of when the tenancy commences.
What also appears to be legal, although questionable in my opinion, is the way LRS issued us the deposit - no paperwork, no accountability, no documentation and made us wait over one month. The California Department of Consumer Affairs states that under California law, 21 calendar days or less after you vacate the property, the landlord must either send you a full refund of your security deposit, or mail or personally deliver to you an itemized statement that lists the amounts of any deductions from your security deposit and the reasons for the deductions, together with a refund of any amounts not deducted.
This apparently does not apply if you never actually live in the property. So if you leave a deposit on a property you intend to rent, they can hold you to the lease agreement and you have to pay as if you were a tenant, but you don't get the benefit of the same laws as a tenant. Basically, it's free money for the landlords if your life's circumstances change.
My husband and I are ethical, hardworking people with excellent credit, but have a drained savings, along with the rest of America. We have to rent a home due to job relocation, the economy in the tank and the lending crisis, but we are also landlords ourselves, still owning the property we moved from in another city. As landlords, we would never think of leaving a young family on the hook for something that did not cost us anything as was the case with our family and LRS let alone string them along with unreturned calls and emails or not provide paperwork in refunding the deposit.
Of course, the amount of money we lost is not enough to justify the expense of a court case. This, I believe, is how LRS rips people off.
All I can say is Kyle Smock and the owners of LRS, Alec Bernstein and Gayle Bernstein, are shifty people running a shifty business. Are they breaking the law? Maybe, maybe not. A little more digging may reveal more than they'd like people to know.
Tenants beware. The next dollar landing in their pockets could be yours.
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