Sam Zell's Apartment REIT Sued By LA Tenants

Sam Zell's Equity Residential faces a lawsuit from a group of Los Angeles tenants over alleged background checks without the proper disclosures.

A group of Equity Residential renters are taking the Chicago-based REIT to court, alleging that it invaded the privacy of thousands of potential tenants by ordering so-called investigative consumer reports on them without informing them it was doing so, The Real Deal reports. 

The reports are allowed, but landlords are supposed to disclose the investigation to tenants and provide them with copies of the findings. The complaint, filed in Los Angeles County Superior Court last week, claims that Equity Residential did not make such disclosures. 

These investigative consumer reports, more thorough than a credit report, often contain damaging errors, hence the requirement that the results be disclosed to tenants, the complaint claims. 

“Without disclosure … [the prospective tenants] would not be able to read the reports and demand that errors be corrected, and [the prospective tenants] would not even know if such reports were being used against him or her,” it states, according to TRD. 

Equity Residential owns more than 15,000 units across 66 properties in the city.

Renters at Equity Residential properties in Marina Del Rey and Hollywood are among the renters on the complaint. Second-quarter filings for the REIT show that the average rent at its LA properties is $2.8K per month. The plaintiffs are suing for damages and ask the court for $10K for each offending report. 

Equity Residential has faced a number of recent legal challenges surrounding its rental practices, including a class-action suit filed in San Francisco in which tenants claimed they were being significantly overcharged for background checks, TRD said.