FTC Reaches $24M Settlement With Greystar Over Rental Housing Junk Fees

Colorado Attorney General Phil Weiser and the Federal Trade Commission (FTC) have announced a settlement of $24 million against Greystar, a global real estate company best known for specializing in rental housing, to settle claims that it violated federal law by charging hidden, mandatory fees. FTC Chairman Andrew Ferguson also directed FTC staff to “begin the process of proposing a rule to address unfair or deceptive fees in rental housing.”

Earlier this year, the state of Colorado and the FTC sued Greystar after an investigation by the FTC’s Consumer Protection Bureau uncovered Greystar’s pricing of rental housing in Colorado and other states since 2019. After attracting prospective tenants with deceptively low rental prices, Greystar failed to adequately disclose mandatory recurring fees charged to tenants for things such as pest control, valet trash service, package concierge service, utility administration fees, and certain amenities. The prospective tenant often could not see the actual fees or the total amount they were required to pay until they received the lease and usually after they paid a non-refundable application fee.

“Addressing deceptive and hidden fees that trick consumers out of their hard-earned dollars is a top priority for our department,” said Weiser. “In this case, we took action against Greystar for doing just that and have held them accountable for their conduct, which jacked up rents. Other landlords are on notice that cheating tenants won’t be tolerated in Colorado.”

The settlement requires Greystar to disclose the total monthly leasing price and clearly disclose all fees or costs upfront, the nature and purpose of these fees, the amount of these fees, and whether these fees are mandatory. In addition, Greystar is prohibited from requiring tenants to make an initial payment or deposit without disclosing all pricing information upfront. Protections for consumer information are included in the settlement, as well as compliance reporting and recordkeeping requirements for the company.

“The agreement contains no admission of wrongdoing, and Greystar continues to maintain, as it has from the start of this matter, that its advertising has always been transparent, fair, and fully consistent with the longstanding industrywide practice of advertising base rent to potential residents,” said Greystar in a statement to the press. “The agreement with the FTC puts an end to expensive litigation between the FTC and Greystar, brings clarity to the FTC’s position for the industry, and allows Greystar to continue to focus on its residents and clients and move the industry forward. Greystar has long championed transparency in the rental housing industry. In recent years, Greystar has launched industry-leading transparent pricing initiatives and digital tools, and encouraged technology partners to strengthen their own capabilities. Greystar’s investments and leadership in these areas show that we are well positioned to support our clients in meeting evolving FTC and state-level requirements.”

“We applaud the Colorado Attorney General and the FTC for taking action to protect tenants and the FTC for its commitment to issue a rule to curb rental housing junk fees,” said Ariel Nelson, senior attorney at National Consumer Law Center (NCLC) and co-author of NCLC’s recent report on rental junk fees. “Tenants around the country face a bewildering array of unavoidable rental housing junk fees, and we need a rule to ensure fairness in the market for tenants and landlords across the country.”

The FTC's settlement with Greystar marks the latest agreement with the rental services industry in the battle over consumer protections, following a recent settlement between RealPage and the Department of Justice (DOJ). RealPage, a provider of commercial revenue management software and services for the conventional multifamily rental housing industry, recently resolved the DOJ's legal action over the company’s revenue management software. As alleged, RealPage’s revenue management software relied on non-public, competitively sensitive information shared by landlords to set rental prices. RealPage’s software also included features designed to limit rental price decreases and align pricing among competitors. In addition, RealPage hosted meetings attended by competing property management companies where competitively sensitive information was shared. 

“Greystar misled consumers by advertising low rent prices and then adding mandatory fees at the end of the sales process,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “At a time when Americans are struggling to find affordable housing, the FTC is focused on monitoring the housing marketplace to ensure that competitors are meaningfully competing on price and that consumers receive transparent pricing.”