At the beginning of this year, the White House issued a “Blueprint for a Renters Bill of Rights.” Among the Blueprint’s many components, the Biden administration called for clear and fair leases without hidden or illegal fees. In March, HUD Secretary Marcia L. Fudge followed up on the Blueprint and issued an open letter to the housing industry calling for action on junk fees that renters face. These fees, she said, can weaken market competition, raise costs for consumers and businesses, and hit the most vulnerable Americans the hardest. Last week, she and the White House announced some results from their efforts.
New Progress With Rental Platforms
In a July 19 press release, Fudge pointed out rental application fees can be up to $100 or more per application, and, importantly, they often exceed the actual cost of conducting background and credit checks. Since prospective renters often apply for multiple units during their housing search, these application fees can add up to hundreds of dollars. “Too often, renters are hit with unexpected fees on top of their rent,” Fudge said in a July 19 press release. “Today’s announcement shows the Biden-Harris Administration’s commitment to lower costs for renters and build a fairer, more transparent rental housing marketplace.” To address this problem, Fudge said in the release, three of the largest online rental platforms – Zillow, Apartments.com, and AffordableHousing.com – announced that they would provide new tools to help renters determine the all-in price of a desired unit and comparison shop more easily.
- Zillow said it is launching a Cost of Renting Summary on its active apartment listings.
- Apartments.com pledged 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.
- Further, 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.
Advancements in Policy and State Legislatures
Concurrently with Fudge’s press release, the White House issued a fact sheet that further elucidates the Federal Government’s approach to eliminating junk fees in rental housing. In the document, President Biden notes that in addition to excessive application fees, renters are often surprised to be charged mandatory fees on top of their rent, including “convenience fees” to pay rent online, fees for things like mail sorting and trash collection, and even so-called “January fees” charged for no clear reason at the beginning of a new calendar year. Hidden fees not only take money out of people’s pockets, Biden added, but they also make it more difficult to comparison shop. A prospective renter may choose one apartment over another, thinking it is less expensive, only to learn that after fees and other add-ons, the actual cost for their chosen apartment is much higher than they expected or can afford. In addition to reiterating the actions taken by Zillow, Apartments.com, and AffordableHousing.com, Biden also announced:
- New research on policy innovation to address rental fees
- HUD released a new research brief that 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
Recent state actions to address hidden and unfair fees
- Colorado. Enacted House Bill 1099, which allows prospective renters to reuse a rental application for up to 30 days without paying additional fees, and House Bill 1095, which limits fees to tenants when landlords fail to provide a nonrenewal notice that disguises fees as “rent,” and limits the amount a landlord can mark up a tenant for third-party services.
- Rhode Island. Enacted House Bill 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.
- 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 Senate Bill 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.
- Maine. Enacted Legislative Document 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.
- Montana. Senate passed Senate Bill 320 to require landlords to refund application fees to unsuccessful rental applicants except for 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 Senate Bill 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.
