FTC Accuses Greystar of Hidden Fees, Lawsuit on Its Way

In a move that could have significant implications for the multifamily rental industry, the Federal Trade Commission (FTC) is preparing to file a civil lawsuit against Greystar Real Estate Partners, the largest apartment landlord in the US.

The lawsuit would accuse the South Carolina-based company of engaging in deceptive practices by imposing hidden fees on tenants without adequate disclosure, per The Real Deal. Notably, it would be the first time a major multifamily landlord has faced government action over hidden fees.

Allegedly…

The FTC’s lawsuit is expected to focus on Greystar’s failure to properly disclose additional charges to prospective tenants.

According to sources familiar with the investigation, these hidden fees, which allegedly include charges for pest control, trash services, and tenant background checks, were not clearly listed in rental listings.

Greystar, which owns and manages thousands of apartment units across the US, has responded by pointing to its efforts to improve transparency. A company representative stated Greystar has taken “proactive steps” to make fees clearer for tenants.

However, Greystar also noted the rental industry still lacks clear regulatory guidelines on how fees should be disclosed.

Legal Precedents

If the FTC pursues the lawsuit, it would be a seismic shift in how hidden fees are regulated in the US multifamily market.

While the FTC has previously pursued cases against single-family rental operators, such as the $48M settlement with Invitation Homes (INVH) over hidden costs, this would be the first time the agency has targeted a major apartment operator like Greystar.

In addition to the FTC investigation, Greystar is currently involved in another legal challenge. Last week, the company was added to a growing antitrust lawsuit filed by the US Department of Justice against RealPage.

The lawsuit alleges RealPage’s software allows landlords to share pricing data, effectively colluding to set rents at inflated levels.

Greystar’s Response

Greystar’s defense centers around the need for clearer regulatory guidelines to prevent misunderstandings about rental fee disclosure.

The company also highlights that it has increased transparency in recent years, pointing to new practices designed to better inform tenants about potential fees.

However, if the FTC pursues the lawsuit, it could set a legal precedent for the entire multifamily rental sector. A ruling against Greystar would likely prompt other large landlords to re-evaluate their fee structures and disclosure practices, potentially leading to industry-wide changes.

Why It Matters

The outcome of the FTC’s investigation and any resulting lawsuit could have far-reaching consequences for both landlords and tenants in the US rental market.

Hidden fees, often called “junk fees,” have been a growing concern among tenants, who argue such fees inflate the cost of renting. If the FTC prevails, it could lead to stronger regulations on multifamily fee disclosures, offering more protection for renters and encouraging greater transparency.

For landlords, this lawsuit serves as a warning that the federal government is increasingly scrutinizing the rental market, particularly pricing practices and tenant relations.

What’s Next

As the FTC prepares to file its lawsuit, the rental industry is watching closely to see if the case will set a new legal precedent. While a settlement between Greystar and the government remains possible, the outcome could still reshape how landlords disclose and charge additional fees to tenants.

For now, the rental sector faces uncertainty as policymakers, landlords, and tenants await the next steps in the legal process.