Settlement approved for Unlawful Fees Class Action

On February 14, 2008, the Middlesex Superior Court approved an Order for Settlement and Final Judgment in the class action case of Rev. H. Bowen Woodruff et al. v. Niles Company, Inc. et al., Civil Action No. 05-03225, which resolved the unlawful charging of finder's fees to Cambridge tenants by an unlicensed real estate agent working for The Niles Company, Inc.

Between September 27, 2001 to November 7, 2003, an unlicensed real estate agent, Sandra Lee ("Lee"), was employed by The Niles Company ("Niles") to show and lease apartments to prospective tenants in buildings managed by Niles in Cambridge. In violation of state law, M.G.L. c. 112, §87DDD1/2, and the regulations of the Massachusetts Board of Real Estate Brokers and Salespersons, which permits only a licensed real estate broker or a salesperson to charge a finder's fee, Lee and Niles, while unlicensed, charged its tenants a finder's fee of one month's rent in order to sign a lease and rent an apartment. The Court entered Final Judgment that this practice is unlawful, and Lee and Niles have agreed to refrain from committing further such violations and to refund the unlawful finder's fee to those tenants who paid it.

After Certification of the class by the Court in May, 2007, the defendants, Lee and Niles, agreed to a settlement, approved by the Court, which:

1. Prohibits the defendants from ever charging a finder's fee while unlicensed;


2. Requires Niles to provide a written disclosure in compliance with the Real Estate Board Regulations of the right to charge such a fee only by a licensed agent and of Niles' relationship to the broker or salesperson; and


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3. Has established a settlement fund to provide refunds to all those tenants who were charged such unlawful finder's fees by Lee and Niles for apartments located at One Waterhouse Street, 19 Garden Street, 3 Concord Avenue, 5 Concord Avenue, 11 Gray Street, and 9 Dana Street, Cambridge, Massachusetts between September 27, 2001 to November 7, 2003, upon presentation of a written claim forwarded to plaintiffs' counsel on or before May 15, 2008.

"This was a significant victory for tenants in Massachusetts," said Kimberly Genereux, one of the two named plaintiffs for the plaintiff class. "All Cambridge tenants and tenants in general, should be aware that only licensed real estate brokers and sales persons may charge a finder's fee for renting an apartment and that tenants should not have to pay a fee unless the real estate agent is licensed."

This decision affects approximately 85 Tenants, who should receive notice of their right to a refund in the next two weeks, and are encouraged to return their claim forms within 45 days for a refund.