On December 2, Greystar agreed to a $24 million settlement over allegations it misled renters by omitting mandatory fees from advertised monthly rents.  This settlement underscores the FTC’s continuing scrutiny of “junk fees” and signals that the FTC may pursue rulemaking requiring greater transparency in rental fee advertising. 

The FTC filed this lawsuit last January under then-FTC Chair Lina Khan, who prioritized combatting deceptive “junk fees.”  According to the complaint, jointly filed by the FTC and the State of Colorado, Greystar did not disclose mandatory fees for services like pest control, valet trash, package concierge, and utility administration as part of its advertised price for a rental unit. 

The settlement requires Greystar to display the total monthly leasing price (which includes all mandatory monthly costs or fees) more prominently than any other pricing representation, and “clearly and conspicuously” disclose the existence, amount, nature, and purpose of fees or costs and whether they are mandatory or optional, along with the total monthly leasing price, before charging customers any payment or deposit, among other things.  The settlement was approved 2-0 by the two Republican Commissioners.

In his concurring statement, Chairman Ferguson stated that he had “directed Commission staff to begin the process of proposing a rule to address unfair or deceptive fees in rental housing.”  Such a rulemaking follows the FTC’s prior efforts to regulate so-called “drip pricing” practices broadly.  In the final days of Khan’s tenure as Chair, the FTC finalized its Rule on Unfair or Deceptive Fees, which requires businesses selling live-event tickets and short-term lodging to clearly and conspicuously disclose the product’s total price in advertising and the nature, purpose, and amount of any fee that has been excluded from the transaction’s total price before charging payment, and prohibiting them from misrepresenting any fee or charge in advertising the product.  However, the original proposal contemplated a broader rule to “tackle the harm caused to consumers and businesses … across various industries,” such as rental housing, and would have applied to almost any “business” that “offers goods or services.”  Chairman Ferguson’s recent statement suggests the Commission may revisit that broader scope.