CATrends: Advertised Apartment Rental Prices

When you rent an apartment, it’s common for there to be housing-related costs in addition to your rent for things like electricity and internet. These are the kinds of charges you can anticipate having to pay every month.

But how do you plan for hidden monthly fees that are actually part of your rent but according to a trend in class-action lawsuits, not disclosed in advertised rental prices?

Since the beginning of last year, six property management companies have been sued for allegedly failing to disclose a number of mandatory fees in the rental prices they advertise to prospective tenants.

Fees cited in these complaints include monthly charges for “valet trash,” pest control, purported administrative and billing costs, technology packages and “common area electricity.” The alleged junk fees range from a few dollars a month to more than $100 a month.

A ‘hidden tax’

A lawsuit filed last September against Pinnacle Property Management Services over its alleged failure to disclose various fees – including pest control, service and trash fees – states that the fees act as a “hidden tax” on renters.

Rental junk fees are like a hidden tax on tenants who have no viable option of disputing or fighting these arbitrary fees and are forced to either continue paying them or move to a new space and risk facing the same problem elsewhere.

The lawsuit against Pinnacle also alleges that the company has increased the costs of its fees despite “no noticeable services being provided and no explanation for the increase in fees.” The lawsuit is pending.

Meanwhile, a complaint filed against Avenue5 last April accuses the company of failing to disclose in advertised rental prices that it charges tenants a “valet trash” fee, typically in the amount of $25, on top of a mandatory $10 trash service fee every month. That lawsuit is also pending.

Other property management companies named in litigation include Camden, Cielo and Essex. Class actions have also been filed against Greystar Apartments, the country’s largest multifamily rental property manager, which was recently sued by the FTC and state of Colorado for allegedly falsely advertising rental prices that do not include numerous mandatory fees. (Read the company’s response.)

Seven of the eight lawsuits TINA.org is currently tracking remain pending.

The takeaway?

Always be sure to carefully and thoroughly read any lease agreement (but be mindful that some of these lawsuits allege that certain fees are even excluded from those contracts). And don’t forget to ask lots of questions before signing on the dotted line.

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