Legal Update: Fee Transparency in the Rental Housing Industry
Fee Transparency in the Rental Housing Industry
Information provided by
Pat Finn, Managing Attorney for Brownlee Whitlow & Praet, PLLC
In recent years, we have seen an increase in fee-related litigation and federal enforcement actions relating to fees around the country, with notable examples including a Virgina lawsuit tied to lease fees that allegedly shifted a landlord’s statutory burdens to a tenant; an enforcement action in Georgia against a single-family housing provider for a variety of unlawful actions (fees, evictions, security deposits, etc.); an enforcement action in Colorado against a multi-family provider with a focus on advertised rental prices; and closer to home – a North Carolina lawsuit initiated by the state’s Attorney General targeting what they call “price fixing” on rental rates. As can be seen, fees that are charged in rental housing lease contracts are being challenged more frequently and litigated more fervently. This article will take a broader look at fees through the lens of “fee transparency.”
On the federal side, when attacking purportedly improper fees and the implementation of said fees, the typical statutory references cited relate to Section 5 of the FTC Act, 15 U.S.C. § 45, as well as the GLB Act, 15 U.S.C. § 6821 et seq. These are federal statutes focused on protecting consumers from false, misleading, unfair, or deceptive practices as well as protecting consumer information from being obtained or solicited under false pretenses. The most analogous North Carolina laws would fall within North Carolina General Statute Chapter 75. You’ve probably heard references to these laws when your legal team references “Unfair and Deceptive Trade Practices” or the “Fair Debt Collection Act.”
The Federal Trade Commission (“FTC”) was involved in a major settlement coming out of Georgia in September 2024, which involved several allegations that included deceptive pricing and junk fees, home inspection practices prior to tenant move-ins, deceptive and unfair security deposit accounting, and unfair eviction practices. In this settlement, the housing provider agreed to pay $48 million in fees, penalties, and tenant refunds. The settlement mandated that the housing provider would be prohibited from deceiving consumers about true rental prices; prohibited from withholding damages that are part of normal wear and tear; prohibited from using security deposits to address issues present in the housing before the current tenant moved in; mandated to notify consumers about federal, state, or local programs meant to assist people facing evictions; and prohibited from filing evictions against tenants who had already vacated and notified the housing provider. This settlement is an early example of the trend for government agencies stepping in to address rental housing practices on behalf of consumers.
In 2025, the FTC was involved in another major settlement, this time out of Colorado that was telling in the aspects of both advertising and the contractual lease fees that it deemed to be inappropriate. In this settlement, the housing provider was required to pay $24 million total between the FTC and the State of Colorado. As compared to the wide ranging array of allegations in the 2024 case, this action was almost entirely focused on the way in which monthly rental rates were being advertised, with the allegation being that a lower amount was being advertised in an effort to entice consumers, only for the same consumers to learn much later in the process that there were additional mandatory fees attached each month.
In the FTC’s settlement, several legal takeaways focused on the advertising of rental rates and fees (as opposed to concerns that may arise during a tenancy such as improper amounts being charged). The industry generally operates with a lease contract that includes a base rental rate. This is the amount advertised for the rental of the physical space, commonly referred to as “bare bones rent”. In addition to the base rental rate, housing providers may charge various fees for services or amenities such as utilities, valet trash, Wi-Fi, parking, television, package holding, etc. The legal issues targeted in these lawsuits focused on the fact that these fees are almost never negotiable, which in some cases increased the monthly total cost to reside at the apartment community by hundreds of dollars. To further compound the legal issues, the allegations were that in some scenarios the first time these fees were being disclosed was at the time the lease was being executed, which often only occurs after several non-refundable fees are paid by the potential applicant during the application process.
The FTC’s settlement stipulated that this practice was wrong. While the settlement itself did not require any party to admit fault, and the actual legal issues were not litigated at trial, the nature of the settlement is telling as to where the FTC’s new rule process is likely headed (to be discussed later in this article).
Following the litigation and resulting settlements, the FTC made clear to the industry that it desires “fee transparency” in the realm of housing and leasing of housing to consumers. To be considered transparent, the advertising for rental housing should include the total all-in cost that a perspective applicant might be responsible for after executing the lease contract. This would include the base rental rate, and all fees that appear within the lease contract. The FTC also urged housing providers to take the following actions with respect to advertising these fees:
- Outline the reasoning for the fees;
- Identify the frequency in which the fees are charged;
- State if the fees are variable; and
- State if the fees are optional.
Finally, the FTC made it known that it believes this type of transparency should occur everywhere that the rental housing is advertised or discussed, from the initial listings through the execution of the lease contract. There should be no moment in the process where a potential applicant is searching for new housing and learns about the rental rate that fails to include the above details, at least in any medium that the housing provider has control over. On-site teams, leasing agents, marketing staff, and all facets of operations should be trained on the need for fee transparency, or the housing provider opens themselves up to potential risk.
On January 30, 2026, the FTC announced that it was engaged in the federal rulemaking process tied to a proposed rule on fee transparency. While that process is in its infancy, and there will be subsequent steps that include the gathering of public comment, we can see a trend in the direction the government is taking as it relates to fees. The short version is – fees MUST be transparent and obvious from the beginning of the transaction with a consumer. In the rental housing industry, that means at the time the application process begins and certainly before a prospect executes a lease. Considering the trending litigation and the ongoing FTC rulemaking process, operations, marketing, and legal should strive to work together to ensure that housing providers are minimizing risk related to fees and ensuring “fee transparency” in all aspects of marketing, advertising, and leasing/sales.
Fee transparency is a topic that reaches all citizens in all industries and therefore is a target for political wins on both sides of the aisle. The housing industry and fee transparency enforcement efforts have remained a consistent issue across elections at local, State, and Federal levels through the years. As always, make sure to consult with your legal team for clarification on the issues or to help review your current advertising and operational procedures for points of potential liability.
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