Federal Trade Commission, Colorado Attorney General Skewers Greystar for Hidden Real Estate Fees

The Federal Trade Commission (“FTC”) and Colardo’s Attorney General (“CAG”) brought a lawsuit today against Greystar Real Estate Partners, LLC and five affiliated entities (collectively, “Greystar”), which manage more than 800,000 rental units across the United States on behalf of various landlords.  

According to the FTC and CAG (collectively, the “Plaintiffs”), Greystar “used deceptive advertising to entice consumers into applying for rental housing, and then bilked those consumers out of hundreds of millions of dollars by charging ‘Hidden Fees’ (mandatory, fixed fees that are not included in the advertised price) for itself and its landlord clients.”

The lawsuit, brought by the Plaintiffs in a Colorado federal court, aims to enjoin permanently Greystar from engaging in further alleged breaches of the FTC Act and the Gramm-Leach-Bliley Act; for its claimed violations of the Colorado Consumer Protection Act, Greystar could be required to pay up to $20,000 per infringement.

, after a prospective tenant is induced to seek a rental at a Greystar-managed property.   the Plaintiffs claim, “continues to misrepresent the true cost of renting a unit at its properties on the property websites and application portals”, 

Plaintiffs “After attracting prospective tenants with deceptively low rental prices,”, the Plaintiffs claim, “Greystar In the most egregious examples, Greystar did not disclose any of the Hidden Fees it charges until after prospective tenants paid to apply and, if approved, received a forty- to sixty-page lease package.”

In other instances, Greystar provided prospective tenants with information about most (but not all) Hidden Fees only after prospective tenants entered their contact information and opened an online account.” In yet other instances, Greystar listed most (but not all) Hidden Fees only after prospective tenants selected a floor plan and lease length in the application portal, and even then the fees may have been concealed behind hyperlinks. Even for webpages where Greystar now lists Hidden Fees before tenants apply, the fee information is confusing and often contradicts other representations on the webpage – and the advertised price still excludes the fees

Employers and employees enter into confidentiality agreements to achieve a number of valid ends in the workplace, including safeguarding proprietary information from disclosure to third party competitors.

Prospective tenants have limited options for recourse. If a prospective tenant realizes the true price before signing a lease and attempts to withdraw their application, they are unable to recoup the hundreds of dollars they paid during the application process. If a tenant who has already signed a lease wants to cancel after discovering the true price, Greystar charges significant lease termination fees, often totaling thousands of dollars. Given the sizeable termination fees, the inability to recoup money already spent, and the difficulty of finding a new home, most tenants are effectively locked into leases that require them to pay the higher-thanadvertised cost. Accordingly, Greystar’s deceptive advertising means individual tenants are on the hook for hundreds, if not thousands, of dollars more than they anticipated.