Key facts
- Renters are advocating for federal regulations to combat 'junk fees' in apartment leases.
- Hundreds of public comments submitted to the FTC support new rules on rental housing fees.
- Industry groups argue that fees are essential for pricing structures and resident services.
- Two major landlords, Invitation Homes and Greystar, have recently settled with the FTC over fee allegations.
- The FTC is considering requiring landlords to disclose a 'total monthly leasing price' including mandatory fees.
Renters across the United States are increasingly vocal in their demand for federal intervention to curb the proliferation of mandatory add-on fees in apartment leases, often referred to as 'junk fees.' These charges, imposed by landlords and property managers, significantly increase the total cost of housing beyond the advertised base rent, leading to financial strain and heightened eviction risks for tenants. Many renters feel powerless against these 'take it or leave it' lease terms, as the cost and disruption of moving often deter them from challenging unfair charges.
The Federal Trade Commission (FTC) is currently engaged in a rulemaking process to address these fees, prompted by a surge in public comments, with nearly 400 out of 471 submissions supporting regulation. Tenant advocates argue that a federal baseline is necessary to level the playing field in the rental market, which has seen a 47% increase in professionally managed buildings over the past decade.
This renewed effort follows previous FTC actions, including settlements with major rental companies. In 2024, Invitation Homes, the largest single-family rental landlord, settled for $48 million over allegations of unfairly charging tenants. In December, Greystar, a leading apartment owner and manager, agreed to a $24 million settlement for similar practices. Both companies denied wrongdoing but highlighted industry-wide practices of advertising base rent and then adding mandatory fees.
Industry groups, such as the National Apartment Association (NAA), have opposed stricter regulations, arguing that fees are a necessary part of pricing structures that ensure financial stability and provide valued resident services. They contend that restrictions could inflate base housing costs and reduce access to services. However, a coalition of 27 state attorneys general has urged the FTC to establish a clear federal standard for these fees.
The FTC's proposed regulations, influenced by the Greystar settlement, may require landlords to disclose a 'total monthly leasing price' that includes base rent and all fixed mandatory fees, excluding variable utility costs. The FTC has also warned major property management software providers, like RealPage and Yardi Systems, about the penalties for advertising incomplete prices. Representative Maxwell Frost and Senator Jeff Merkley have introduced legislation, the End Junk Fees for Renters Act, aiming to ban certain fees and require total rent price disclosure, though it currently lacks Republican support and applies only to federally financed housing.
Mandatory utility fees, often billed through third-party 'ratio utility billing services,' have emerged as a primary concern among renters. These fees, which can cover both in-unit and common area utilities, are frequently calculated using custom formulas rather than documented individual usage. While some states have implemented partial protections, most lack explicit regulations against rental junk fees.