President Joe Biden is days away from leaving office, but his administration is taking one shot at the real estate industry.
I Federal Trade Commission (FTC) announced Thursday that it is suing a multifamily property manager Greystar for allegedly deceiving tenants by adding mandatory fees that increased prices above the advertised price.
A complaint was filed in US District Court for the District of Coloradoonce State of Colorado He is also the plaintiff in this case. According to the FTC, the alleged practice violates the Federal Trade Commission Act, the Gramm-Leach-Bliley Act and the Colorado Consumer Protection Act.
“Thanks to Greystar’s deceptive advertising and hidden fees, tenants are still stuck with their rent hundreds, if not thousands, of dollars more than they expected their apartment to be worth,” Colorado Attorney General Phil Weiser said in a statement. “Through their actions, Greystar is preventing apartment hunters from shopping by comparing and choosing a home that fits their budget.”
The complaint lists a number of fees Greystar refers to as “hidden,” and the FTC says Greystar does not disclose information about these fees to apartment hunters. This includes fees related to utilities and using renters insurance not provided by Greystar. Consumers are said not to be given the option to opt out of these payments.
In a statement, Greystar criticized the FTC’s approach of creating a case that “holds the title” instead of working with the company to “help make sense for consumers in the rental housing industry.”
“The FTC’s complaint targets a long-standing industry-wide practice of recruiting advertising bases to potential tenants,” the statement read. “The idea that this is done with the intention of hiding money from consumers is false. No one living in a community managed by Greystar is paying money that they did not see and agree to in their lease.”
The Biden administration has been aggressive in addressing what it sees as violations of antitrust and consumer protections, and the real estate industry has come under fire several times. Although it did not play a direct role in National Association of Realtors‘ (NAR) $418 million class-action antitrust settlement, surrounded related lawsuits and signed to intervene if deemed necessary.
Plaintiffs in related lawsuits have accused several NAR-affiliated listing services of colluding to improperly increase agent commission fees by sharing confidential information.
In August, the Department of Justice (DOJ) hit RealPage in an antitrust lawsuit, which claims the company’s YieldStar and AI money management (AIRM) software helped multifamily landlords raise rents by sharing confidential information, claims similar to those in the NAR lawsuits.
President-elect Donald Trump has not made any comments related to this effort, so it is an open question whether his administration will continue to pursue these cases or, more generally, issues of antitrust and consumer protection.
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