Potential settlement reached in Iowa City Apartments Downtown lawsuit

IOWA CITY - A potential settlement has been announced in a class-action lawsuit that pits about 14,000 former tenants against Iowa City's largest landlord company.

Christopher Warnock, lawyer with the Iowa Tenants Project, said Wednesday that he and officials with Apartments Downtown had reached a preliminary settlement in the five-year-old class-action lawsuit.

A Johnson County Judge will need to approve the settlement, which could happen in the coming months, Warnock said.

If approved, tenants who rented with Apartments Downtown and Apartments Near Campus - which are operated by the same company - from 2010 through 2014 would receive a $65 payment for each year of their tenancy.

'It's a fair settlement,” Warnock said. 'As soon as the judge approves the ruling, we'll be all set to start putting the checks out.”

Warnock said the dollar figure is tied directly to a mandatory carpet-cleaning charge that was present in the company's lease for all tenants.

'This isn't about the security deposit, that's on an individual basis, case-by-case,” Warnock said. 'What everybody had in common was they had an illegal lease. The big charge was in carpet-cleaning fees.”

All told, Warnock estimated the case to amount to more than $1 million.

But there is more to the settlement than money, Warnock said, adding that it includes a court order so an Iowa Tenants Project lawyer would handle any future tenant complaints against Apartments Downtown.

That lawyer would represent the tenants to ensure fairness while providing more accountability from the landlord, he said.

Warnock said tenants would pay a $20 fee, while the apartment company covers the $150 an hour lawyer fees.

'The settlement is great, I'm really happy about that, but the complaint process is really exciting,” Warnock said.

The complaint process is aimed at changing the local tenant/landlord relationship, he added.

'This represents a really radical change,” Warnock said. '(Apartments Downtown) really bent over backward to make this work. I have to give them huge points ... no other landlord has gone this far.”

The Iowa Tenant Project first began its case against Apartments Downtown about five years ago, with a few former tenants alleging that leases they signed with the rental provider contained prohibited provisions, carpet-cleaning fees, responsibility for repairs and maintenance and liquidated damages - all of which violated the Iowa Uniform Residential Landlord Tenant Act, according to court documents.

Last summer, a Johnson County District Judge ruled that Apartments Downtown had violated Iowa Code. Apartments Downtown appealed the ruling last August.

A hearing on the proposed settlement will be July 18 and former tenants seeking additional information on the settlement can do so on the class-action website, adisettlement.com.

Former tenants who qualify don't have to do anything to be included in the class-action lawsuit, but they must register - including their address and years of tenancy - to receive a settlement payment.