The Federal Trade Commission on Thursday filed a lawsuit against the largest apartment landlord in the United States, Greystar Real Estate Partners, accusing it of charging tenants hundreds of millions of dollars in hidden fees.
Greystar, which according to the National Multifamily Housing Council manages nearly 800,000 apartments across the country, routinely failed to notify prospective renters of mandatory fees for services including trash collection, pest control and package delivery, the F.T.C. said in its complaint. Combined, these apartment fees have often added up to hundreds or thousands of dollars each year. Many tenants, the agency said, did not discover the fees until after they signed a lease or moved into a Greystar property.
The real estate giant’s pricing practices, since at least 2019, have in some cases included lease termination charges amounting to thousands of dollars, according to the lawsuit. Those charges essentially lock tenants into leases that require them to pay more than the advertised cost, the lawsuit said.
“Through their actions, Greystar is thwarting apartment hunters from comparison shopping and choosing a home that fits within their budget,” Colorado’s attorney general, Phil Weiser, who filed the lawsuit with the F.T.C., said in a statement.
The lawsuit, which comes in the final days of Lina Khan’s tenure as chair of the F.T.C., is a continuation of the Biden administration’s focus on reining in costs in the rental housing industry. Last week, the Justice Department’s antitrust division expanded its lawsuit against the real estate software company RealPage, initially filed in August, to include Greystar and five other landlords, accusing them of using algorithms in coordination to keep rents high. Greystar said in a statement that the firm had never engaged in anti-competitive practices.
Greystar said the F.T.C.’s complaint, filed in the U.S. District Court for the District of Colorado, was based on misrepresentations of the facts, and that the company intended to defend itself against the government’s claims.
“The F.T.C.’s complaint targets a longstanding industrywide practice of advertising base rent to potential residents,” the company, based in Charleston, S.C., said in a statement. “The most effective path to achieving uniform and consistent fee disclosures is through clear regulatory guidelines for our industry.”
The F.T.C. has been scrutinizing hidden fees more broadly, across industries. Last month, it finalized a rule against hidden fees, requiring upfront disclosures of total prices for hotels, short-term rentals and event ticketing vendors. Multifamily apartments, however, were not included in the rule.
Ms. Khan, during her tenure, has elicited intense criticism from the business world for her efforts to scale back the power of some of America’s biggest corporations, from tech giants to grocery chains. It remains unclear how her team’s last-minute consumer protection efforts, in lawsuits and rulings in the final weeks of the Biden administration, will fare after President-elect Donald J. Trump takes office on Monday.
Mr. Trump has picked Ms. Khan’s successor: Andrew Ferguson, a Republican who currently sits on the F.T.C. and has made few indications of how he intends to approach regulation of the housing industry. But the commission voted unanimously in favor of suing Greystar, with both Republican commissioners, including Mr. Ferguson, approving the lawsuit.
