Greystar Responds To Ftc’s Lawsuit Over “hidden Fees”

The Federal Trade Commission has been signaling a lawsuit against the nation’s largest apartment manager, Greystar, for several days, and yesterday it officially filed its complaint. The agency alleges that Greystar intentionally misrepresented the true cost of renting its units by failing to disclose “hidden fees” in its advertising. According to the filing: “Since at least 2019, Defendants (collectively referred to as Greystar) have used deceptive advertising to entice consumers into applying for rental housing, and then bilked those consumers out of hundreds of millions of dollars by charging ‘Hidden Fees’ (mandatory, fixed fees that are not included in the advertised price) for itself and its landlord clients.”

The fees in question vary in nature and cost. The FTC specifically names fees such as: “Valet trash fees (often $25-35 per month, in addition to any separate charge for residential trash collection); package delivery or package concierge fees (generally $15-20 per month); media and/or smart home technology package charges (ranging from $75-175 per month); fixed charges for common area utilities or maintenance (generally $15-25 per month); monthly administrative fees for the dissemination of utility bills on top of the tenant’s portion of the utility charges (often between $4-8 per month), and one-time administrative fees to set up and close these utility billing accounts (generally $10-20 each); real estate taxes or local ordinance fees (often ranging from $5-25 per month); monthly “validation” fees if a tenant chooses to enroll in a renter’s insurance plan other than Greystar’s default provider (generally $3 per month); and pest control fees (typically between $2-5 per month).”

In response to the lawsuit, Greystar issued a statement arguing that “the FTC’s complaint targets a longstanding industrywide practice of advertising base rent to potential residents. The idea that this is done with the goal of hiding fees from consumers is patently false. No resident at a Greystar-managed community pays a fee they have not seen and agreed to in their lease.”

The company also criticized the FTC for failing to provide industry guidance, stating, “The FTC, after promising rules to help bring standardization to the industry, has provided zero guidance. Instead, last month, it carved the rental housing industry out from its Fees Rule after initially proposing to include it.” The “Fees Rule” referenced in the statement is a trade regulation passed in December to protect consumers from hidden fees associated with live event tickets, hotels, and vacation rentals, but it did not explicitly cover rental housing.