The Federal Trade Commission has announced it is seeking written public comment on a notice of proposed rulemaking to address nationwide potentially unfair rental housing fees or deceptive fee practices in connection with rental housing.
As detailed in a Federal Register notice announcing an Advance Notice of Proposed Rulemaking, the FTC is seeking written comments, including data, evidence, analyses and arguments, regarding rental housing fees and charges throughout a lease lifecycle, from application to moveout.
“Rental-pricing practices that are neither clear nor transparent undermine competition and harm consumers,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “The Trump-Vance FTC is focused on addressing unlawful business conduct that obscures the actual cost of housing and undermines price competition.”
The failure to advertise the true total rent can limit consumers’ ability to make informed financial decisions, increasing their search costs and exposing them to other negative monetary consequences when they take on more rent than they can afford. These practices also may undermine competition by weakening the incentives of rental-housing providers who do advertise the true total rent.
The notice seeks comments on such topics as:
- Total rent: Do rental housing providers fail to clearly disclose or misrepresent the true total rent for a property, including all mandatory fees or charges?
- Fees and Charges: Do rental housing providers fail to clearly disclose or misrepresent the nature, purpose, amount, refundability, optionality and recurrence of fees or charges?
- Application Fees: What practices do rental housing providers engage in relating to application fees that harm consumers?
- Security Deposits: What practices do rental housing providers engage in relating to security deposits that harm consumers?
- Billing Issues: What practices do rental housing providers engage in relating to billing that harm consumers?
- Consumer Choice: What practices do rental housing providers engage in that harm consumers by impeding consumer choice?
Unfair and deceptive rental housing fee practices violate federal law. In the past two years, the FTC has filed two cases challenging these fee practices by nationwide housing providers. Invitation Homes, the largest single-family home rental housing provider in the country, agreed to pay $48 million to settle FTC allegations that the company violated the FTC Act by, among other things, excluding mandatory monthly fees from the advertised rent.
Greystar Real Estate Partners, the largest residential rental property owner and manager in the nation, was ordered to change its fee disclosure practices and pay $23 million in consumer redress to settle a lawsuit by the FTC and the state of Colorado that alleged the company misrepresented the true cost of renting a property and excluded mandatory fees from the advertised rent.
Case-by-case enforcement, while essential, addresses only some aspects of the harmful fee practices in the rental housing industry. The notice announced this week explores whether a rule is needed to address hidden and misleading fees that inflate rent well beyond what is advertised and other problematic fee practices imposed throughout a lease lifecycle. It also would serve as a deterrent against those practices because it would allow the agency to seek civil penalties against violators and more easily obtain redress for harmed consumers.
Consumers can submit comments electronically for 30 days, ending April 11. Consumers also may submit comments in writing by following the instructions in the “Supplementary Information” section of the Federal Register notice.
