FTC vs. Greystar: The Journey To All-In Pricing Is Paved With Misinformation
The Federal Trade Commission announced in early December a $24m settlement over “deceptive advertising practices”.
Jay Parsons of “The Rent Roll” fame unpacks the breaking story here.
The Commission fired off a warning shot to apartment operators: Advertise your all-in pricing, with mandatory fees included, or “we will not hesitate to take action" against you.
The FTC and the State of Colorado allege that Greystar — which advertises hundreds of thousands of rental units on its website, third-party websites, and websites for individual buildings and complexes — regularly misrepresented the total cost of renting an apartment by excluding mandatory fees from the price it advertised to consumers.
This led to consumers sometimes paying hundreds of dollars more than they expected each month for undisclosed, mandatory items and services like package delivery, trash pick-up, and technology packages.
These types of fees include line items named as common area maintenance fees, mandatory pest control fees, community amenity fees, and so on. Some of these can exceed $50 per month per unit.
The Key Takeaways from the Greystar settlement:
Any mandatory fees required as value in exchange for a bundle of property rights is rightfully considered rent.
A shift towards greater “transparency” in rental fees.
The letter made it clear that the FTC will apply the same all-in pricing standard to everyone in rental housing -- not just Greystar. The Commission expects rental housing owners and managers will ensure all third-party partners (i.e. listing websites) display all-in pricing.
Greystar owns a portfolio of 120,000 units and manages more than 1,000,000 units, so its unclear what presumably small slice are included in the $24m settlement, but we do know the suit emanated out of Colorado.
The most egregious claims are cited below from our own research.
However, this is not foolproof clarity.
Apartments.com attempted to provide “Total Monthly Pricing” but summed the utility fees for 1BR ($75) , 2BR ($85) and 3BR ($95) and added that total $255 to the listed base rent.
