Colorado Attorney General Phil Weiser and federal regulators filed a joint lawsuit against the largest apartment owner in the country on Thursday, accusing it of intentionally misleading tenants about the cost of its rentals.
The suit, filed in U.S. District Court in Denver, alleges that Greystar “consistently misrepresents the total cost” of renting its properties by withholding details about mandatory fees for services like trash collection and pest control. The suit describes fees assessed at two Denver complexes that pushed the cost of rent above what was advertised online, and it accuses Greystar of violating both state and federal law through its fee practices.
Those violations include allegedly failing to disclose the full cost of a rental until after a prospective tenant has paid an application fee.
Greystar is the largest apartment owner and manager in the country and one of the largest in the state, where it operates more than 45,000 units, according to the Colorado Attorney General’s Office. The company made more than $100 million from hidden fees in Colorado, Utah, California and Nevada, according to the suit.
“Because of Greystar’s deceptive advertising and hidden fees, tenants are on the hook in their lease for hundreds, if not thousands, of dollars more than they anticipated that their apartment would cost,” Weiser said in a statement.
His office filed the suit alongside the Federal Trade Commission, which is set for a leadership overhaul once President-elect Donald Trump assumes office next week.
In a statement posted to its website, Greystar said it had tried to work with the FTC. It accused the agency of pursuing “headline-grabbing litigation in the waning days of the (Biden) administration.”
“The FTC’s complaint targets a longstanding industrywide practice of advertising base rent to potential residents,” says the company, which is also being sued by the federal government and Weiser’s office for its alleged role in price-fixing rents. “The idea that this is done with the goal of hiding fees from consumers is patently false. No resident at a Greystar-managed community pays a fee they have not seen and agreed to in their lease.”
In their lawsuit, Weiser’s office and the FTC acknowledge that the fees are included in lease agreements. But even there, they argue, Greystar buries the fees in lengthy contracts, and it does not calculate total costs in the lease, instead describing base rent as one figure and listing fees elsewhere.
In emails to The Post last summer, roughly 50 renters in metro Denver described the myriad fees they pay each month, adding hundreds of dollars to their annual costs. One tenant said he even paid a fee for the calculation of all the other fees he was charged.
The new suit comes as Colorado lawmakers, consumer advocates and regulators are calling for better regulation around hidden fees, particularly in housing. Democratic lawmakers plan to unveil a bill to better regulate hidden fees next week.
The FTC appears to be on board: In a Wednesday letter to Gov. Jared Polis and state officials, an FTC official wrote that “a comprehensive law” would blunt costs that are often disproportionately heavy for lower-income residents and renters.
Stay up-to-date with Colorado Politics by signing up for our weekly newsletter, The Spot.
Originally Published:
