Berrada Properties Settles Lawsuit for $1.7M Over Tenant Rights Violations
Wisconsin Department of Justice (DOJ) has reached a $1.7 million settlement with Berrada Properties, one of Milwaukee’s largest landlords, resolving a lawsuit that alleged numerous violations of tenant rights. This agreement includes significant financial restitution for affected tenants and sweeping reforms aimed at improving tenant protections.
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What Led to the Lawsuit?
In November 2021, the DOJ filed a lawsuit against Berrada Properties Management, Inc., owned by Youssef “Joe” Berrada. The lawsuit accused the company of several unlawful practices, including:
- Charging illegal late fees: Berrada Properties was accused of charging tenants $100 per month in late rent fees, which were not in compliance with Wisconsin’s landlord-tenant laws.
- Unlawful attorney fees: Tenants were reportedly forced to pay attorney fees during eviction processes, even when these charges were not legally warranted.
- Neglecting property maintenance: The lawsuit highlighted issues with substandard living conditions, including poor maintenance and renovations done with little regard for tenant well-being.
- Unlawful eviction practices: The company allegedly pressured tenants to leave apartments during renovations, even if they had a right to remain.
Key Terms of the Settlement
The $1.7 million settlement includes both monetary penalties and structural reforms to protect tenants:
- Civil forfeiture: Berrada Properties will pay a civil forfeiture of $986,455.92, along with attorney fees and costs of $249,225.
- Tenant restitution: The company will reimburse tenants who were charged unauthorized late fees or attorney fees, with more than $850,000 expected to be paid out.
- Income-based rental program: Berrada Properties will implement an income-based rental program for up to 300 tenants over the next 3 to 5 years, with oversight by Milwaukee’s Community Advocates.
- Eviction relief: Eviction judgments based on illegal fees will be vacated and sealed. This aims to give tenants a fresh start and clear their records of unfair evictions.
- Remediation programs: Berrada has agreed to offer rental assistance grants and move-out assistance payments to tenants, in addition to starting a $1.3 million credit account for further tenant support.
Impact on Milwaukee Tenants
The settlement is seen as a significant victory for Milwaukee tenants, particularly in low-income and marginalized communities who were disproportionately affected by Berrada’s practices. Many tenants had long complained about the condition of their units, as well as the financial burdens imposed by unlawful fees and evictions.
Sherlonda Carter, a former tenant of Berrada, expressed cautious optimism about the settlement. “It’s taken too long to get here, and I hope this settlement helps others who are still living in his properties,” she said. Carter had previously lived in a unit infested with maggots and faced difficulties getting her concerns addressed.
What Happens Next?
The settlement now awaits final approval from the state Legislature’s Joint Finance Committee, after which it will go to a judge for formal approval. The relief programs, including restitution and rental assistance, will begin once the settlement is finalized.
What is Berrada Properties?
Berrada Properties Management, Inc. is a property management company that controls nearly 9,000 apartment units across Milwaukee and Racine. Despite the allegations, Berrada has denied any wrongdoing, maintaining that the settlement addresses issues that were being resolved even before the lawsuit was filed. The company continues to operate its business while complying with the new reforms laid out in the settlement.
What Tenants Can Expect
Affected tenants can expect payments and support under the restitution program, provided they meet specific criteria. The Wisconsin DOJ and Berrada Properties are working with third-party administrators, including Community Advocates, to ensure the smooth distribution of funds and access to support programs.
