United States
April 18, 2023
PayProp Insights US

Federal government cracks down on rental housing “junk fees”

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Shining a light on "junk fees".

The federal government is taking aim at “junk fees” – hidden service fees and surcharges – with the introduction of the Junk Fee Prevention Act, and housing professionals could soon be under the spotlight.

The proposed legislation would require airline, hotel, and entertainment companies to disclose all fees upfront and prohibit certain fees altogether, ending unfair surprise costs for consumers. Compliance would be enforced by the Federal Trade Commission and the Federal Communications Commission.

The Junk Fee Prevention Act comes after the Ticketmaster controversy in November 2022, when the ticket company's exorbitant add-on fees made headlines.

The Department of Housing and Urban Development (HUD) has also weighed in on the issue of junk fees, stating that they are committed to protecting the housing industry from unfair and deceptive practices. In an open letter, HUD Secretary Marcia Fudge specifically called out excessive or duplicative application, move-in, high-risk, and late fees that cost renters and homebuyers hundreds of dollars before even moving in.

Property managers may soon need to adapt their business practices to comply with stricter HUD regulations. One strategy is to routinely review all fees charged to owners and renters to ensure they are all necessary and justifiable. Monthly itemized statements help all parties to the lease keep track of fees as well as all trust account activity.

Ultimately, property managers who prioritize transparent and ethical business practices are more likely to build trust with owners and tenants and benefit from increased client satisfaction and retention.

More housing policy headlines

Kansas City apartment says 'no aggressive' fish allowed – Insider

Florida’s $711M affordable housing bill becomes law – The Real Deal

Does new Renters Bill of Rights endorse national rent control? – PayProp

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