President Joe Biden is mere days away from leaving office, but his administration is taking one more shot at the real estate industry.
The Federal Trade Commission (FTC) announced Thursday that it’s suing multifamily property manager Greystar for allegedly deceiving renters by adding mandatory fees that raised prices above the advertised amount.
The complaint was filed in the U.S. District Court for the District of Colorado, and the State of Colorado is also a plaintiff in the case. According to the FTC, this alleged practice violates the Federal Trade Commission Act, the Gramm-Leach-Bliley Act and the Colorado Consumer Protection Act.
“Because of Greystar’s deceptive advertising and hidden fees, tenants are on the hook in their lease for hundreds, if not thousands, of dollars more than they anticipated that their apartment would cost,” Colorado Attorney General Phil Weiser said in a statement. “Through their actions, Greystar is thwarting apartment hunters from comparison shopping and choosing a home that fits within their budget.”
The complaint lists a number of fees Greystar levies that it refers to as “hidden,” and the FTC claims that Greystar doesn’t include information about these fees to apartment hunters. These include fees related to utilities and for the use of renters insurance not provided by Greystar. Consumers are allegedly not given the option to opt out of these fees.
In a statement, Greystar decried the FTC’s approach of producing “headline-grabbing” litigation rather than working with the company to “help drive meaningful improvements for consumers in the rental housing industry.”
“The FTC’s complaint targets a longstanding industrywide practice of advertising base rent to potential residents,” the statement reads. “The idea that this is done with the goal of hiding fees from consumers is patently false. No resident at a Greystar-managed community pays a fee they have not seen and agreed to in their lease.”
The Biden administration has been aggressive in addressing what it sees as violations of antitrust and consumer protection, and the real estate industry has been in the crosshairs multiple times. While it didn’t play a direct role in the National Association of Realtors‘ (NAR) $418 million settlement of class-action antitrust lawsuits, it hovered around the related cases and signaled it would intervene if deemed necessary.
Plaintiffs in the related cases accused NAR-affiliated multiple listing services of colluding to artificially inflate agent commission fees through private information sharing.
In August, the Department of Justice (DOJ) hit RealPage with an antitrust lawsuit, claiming that the company’s YieldStar and AI revenue management (AIRM) software helped multifamily landlords to artificially inflate rents through private information sharing, claims that echo those in the NAR cases.
President-elect Donald Trump hasn’t made any comments related to this effort, so it’s an open question as to whether his administration will continue to pursue these cases or, more broadly, the issues of antitrust and consumer protection.
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