On April 13, a bipartisan coalition of more than two dozen state attorneys general (AGs) submitted a comment letter supporting the Federal Trade Commission’s (FTC) proposed rule targeting so-called “junk fees” in the residential rental market. The coalition’s letter reflects growing concern that alleged undisclosed or misleading rental fees are worsening housing affordability and confusing consumers nationwide.
The AGs express concern that fees charged in addition to base rent increase the total cost of rent. The AGs characterize many of these fees as unfair or deceptive because the fees are often mandatory and allegedly not clearly disclosed at the outset. The letter specifically targets application fees, “administrative” and “convenience” fees, amenity charges, mandatory trash or pest-control fees, and add‑on service charges (such as cable or internet).
The letter also discusses the impact of these fees on competition because the AGs contend that undisclosed fees limit consumers’ ability to compare options accurately. Thus, rentals that disclose the true rental price are disadvantaged compared to leases that advertise lower prices but add fees later. Moreover, the AGs note that a purely state‑by‑state regulatory or enforcement scheme has limited effect due to large multistate landlords or property managers. Accordingly, the AGs argue that a consistent national baseline would help ensure fair competition and consistent practices nationwide.
In their letter, the AGs urge the FTC to adopt rules that would set a federal “floor” for transparency in rental prices. Specifically, the coalition asks the FTC to:
- Require disclosure of the total cost of rental housing including all mandatory fees in advertisements and listings;
- Prohibit unfair or deceptive rental fee practices and fees for services that the landlord is legally required to provide; and
- Preserve the role of states in their own consumer protection regulations and enforcement actions in the residential rental market.
Why It Matters
This letter reflects an increasing focus from federal and state regulators on alleged “junk” fees, often through state unfair and deceptive acts and practices or consumer protection laws. The FTC and state AGs have engaged in enforcement actions against what they perceive to be junk fees in many other industries, including live-ticketing events, hospitality and short-term lodging, and food delivery platforms. For rental property owners and operators, this development signals heightened scrutiny, regulation, and enforcement in the rental market. And for other industries, this indicates that regulators, buoyed by recent junk fee enforcement successes, are willing to expand their junk fee enforcement strategy into new industries.
