| Entities | Biden White House (21) |
| Topics and Issues | "Junk Fees" (3) |
From July 2023…
White House, Executive Branch Agencies, Privacy Companies
- White House
Today, the White House announced “a new front in his crackdown on junk fees: rental housing.” This announcement follows an earlier announcement on transparency in event ticket pricing and the elimination of “junk fees” in ticket pricing. The White House added that
Today, the President will outline several new, concrete steps in the Administration’s effort to crack down on rental junk fees and lower costs for renters, including:
- New commitments from major rental housing platforms—Zillow, Apartments.com, and AffordableHousing.com—who have answered the President’s call for transparency and will provide consumers with total, upfront cost information on rental properties, which can be hundreds of dollars on top of the advertised rent;
- New research from the Department of Housing and Urban Development (HUD), which provides a blueprint for a nationwide effort to address rental housing junk fees; and
- Legislative action in states across the country—from Connecticut to California—who are joining the Administration in its effort to crack down on rental housing fees and protect consumers.
This announcement is likely to put added steam behind state legislation in 2024 for reusable tenant screening reports (RTSR) and limits on landlords’ ability to charge for tenant screening reports. The White House cited several state bills and laws that call for RTSRs and fee caps.
Today’s work by the White House builds “on the President’s effort to tackle junk fees across industries. President Biden has repeatedly called on federal agencies, Congress, and private companies to take action to address junk fees across the economy, and ensure Americans are provided with honest, transparent pricing.” The CFPB has been on the junk fee bandwagon (here), as has the FTC (here).
2. Private companies
As noted by the White House in July 2023,
- “Zillow is today launching a Cost of Renting Summary on its active apartment listings, empowering the 28 million unique monthly users on its rental platform with clear information on the cost of renting. This new tool will enable renters to easily find out the total cost of renting an apartment from the outset, including all monthly costs and one-time costs, like security deposits and application fees.”
- “Apartments.com is announcing that this year it will launch a new calculator on its platform that will help renters determine the all-in price of a desired unit. This will include all up-front costs as well as recurring monthly rents and fees. The Apartments.com Network currently lists almost 1.5 million active availabilities across more than 385,000 properties.”
- “AffordableHousing.com, the nation’s largest online platform dedicated solely to affordable housing, will require owners to disclose all refundable and non-refundable fees and charges upfront in their listings. It will launch a new “Trusted Owner” badge that protects renters from being charged junk fees by identifying owners who have a history of adhering to best practices, including commitment to reasonable fee limits, no junk fees, and full fee disclosure.
3. HUD
In July 2023, HUD released a Research Brief: Transparency in Rental Fees. The White House said that this brief “provides an overview of the research on rental fees and highlights state, local, and private sector strategies to encourage transparency and fairness in the rental market, including capping or eliminating rental application fees; allowing prospective renters to provide their own screening reports; allowing a single application fee to cover multiple applications; and clearly identifying bottom-line amounts that tenants will pay for move-in and monthly rent. The brief provides a blueprint for how everyone from local government to landlords can do better for renters.” The HUD brief adds that “tenant screening reports may include inaccurate information, prospective renters may pay multiple application fees only to be repeatedly rejected because of those inaccuracies.” (citing CFPB Reports Highlight Problems with Tenant Background Checks.
HUD cited several state bills and laws that call for RTSRs and fee caps and noted the precedent of the common application for college.
4. State and Local Government
In July 2023, the White House and HUD cited several state and local laws and proposals to “protect” renters. These proposals could gather additional steam, especially in Democratic jurisdictions, now that they have been promoted at the federal level.
- Reusable tenant screening reports
- New York State prohibits landlords from collecting application fees from prospective renters with portable screening reports. Dunn, Eric. 2022, The Case Against Rental Application Fees, Georgetown Journal on Poverty Law & Policy (1): 21–47.
- State laws in California, Maryland, and Washington define reusable tenant screening reports, including the contents of those reports (e.g., income, rental history, credit history, and criminal history) and the length of time they are valid. Cal. Civ. Code § 1950.1; MD. Code Ann., Real Property § 8-218; Wash. Rev. Code Ann. § 59.18.030.
- Maryland and Washington require landlords to disclose whether they accept reusable screening reports. Those two states prohibit landlords from charging a fee to an applicant with a portable report unless the landlord has properly disclosed that portable reports are not accepted. MD. Code Ann., Real Property § 8-218(c)(1); Wash. Rev. Code Ann. § 59.18.257(1)(a).
- Similarly, California prohibits landlords from charging a fee to an applicant with a portable report unless the landlord does not generally accept such reports. Ludden, Jennifer. 2023, Rental Application Fees Add Up Fast in a Tight Market. But Limiting Them Is Tough, NPR, January 13; Wash. Rev. Code Ann. § 59.18.257(1)(b); Cal. Civ. Code § 1950.1(d).
- Colorado. Enacted H.B. 1099, which allows prospective renters to reuse a rental application for up to 30 days without paying additional fees; and H.B. 1095, which limits fees to tenants when landlords fail to provide a nonrenewal notice that disguise fees as “rent,” and limits the amount a landlord can mark up a tenant for third-party services.
- Fees for a background check or credit report
- Rhode Island. Enacted H.B. 6087 to limit rental application fees beyond the actual cost of obtaining a background check or credit report, if the prospective tenant does not provide their own report.
- Maine. Enacted L.D. 691 to prohibit a landlord from charging a fee to submit a rental application that exceeds the actual cost of a background check, a credit check, or another screening process. The law also prohibits a landlord from charging more than one screening fee in any 12-month period.
- Washington set a cap to equal the exact cost of the tenant screening service. Wash. Rev. Code Ann. § 59.18.257(1)(b).
- Fees in general
- Minnesota. Enacted Senate File 2909, which includes a requirement for landlords to clearly display the total monthly payment and all nonoptional fees on the first page of the lease agreement and in all advertisements.
- Connecticut. Enacted S.B. 998 to prohibit a landlord from requiring a fee for processing, reviewing, or accepting a rental application, and set a cap of $50 on the amount that can be charged for tenant screening reports. The law also prohibits move-in and move-out fees, and certain fee-related lease provisions, including certain late fees related to utility payments.
- Montana. Senate passed S.B. 320 to require landlords to refund application fees to unsuccessful rental applicants except any portion of the fee used to cover costs related to reviewing the application, including conducting a background check. Landlords may only charge candidates for the actual cost of obtaining a background check or credit report.
- California. Senate passed S.B. 611 to require the mandatory disclosure of monthly rent rates, including disclosure of a range of payments, fees, deposits, or charges, and to prohibit certain fees from being charged.
- Virginia has a cap rental application fees at a specific dollar figure, with caps typically ranging from $20 to $50. Va. Code Ann. § 55.1. See also, N.Y. Real Prop. Law § 238-a(1)(b).
- Vermont has banned rental application fees altogether. VT. Stat. Ann. tit. 9, § 4456a (2022).