The Changing Legal Landscape of Leasing Fees Coined “Junk Fees”

There is a changing legal landscape across the United States for multi-family property owners and management companies on leasing fees coined “junk fees.”  The issue regarding “junk fees” has been looming since 2023 when the National Consumer Law Center (NCLC) compiled a report titled: “Too Damn High: How Junk Fees Add to Skyrocketing Rents” (Report).  The NCLC prepared this Report to highlight junk fees paid to secure and maintain rental housing.  Additionally, the Report urged the Federal Trade Commission (FTC) to rein them in through rulemaking and enforcement actions. The FTC did take notice of and issued a final rule on “junk fees” in the wake of the 2024 election. While, the final rule did not include regulations around rental housing, in 2024 and 2025 the FTC initiated actions against some of the Country’s largest single-family home and multi-family rental property management providers, for “junk fee” related practices.  Recently, on March 13th of 2026, the FTC proposed to commence rulemaking to address unfair and deceptive acts or practices related to advertised rent and other fees and charges in the rental housing industry.  The FTC received over 3,000 comments, which were due by April 13, 2026, in response to their solicitation for written comments.  The FTC is in the process of reviewing comments to determine the need for a rules to prevent unfair or deceptive practices in relation to the rental housing market.

Of the legal actions in 2024 and 2025, one action alleged the largest single-family home rental housing provider in the Country failed to disclose mandatory monthly fees from rental amounts and misrepresented and unfairly withheld deductions from security deposits.  In September of 2024, this action resulted in required changes to renal practices and payment of $48M in consumer redress. The other action in 2025, alleged a multi-family property management company advertised low monthly rent and then saddled tenants with hidden fees (aka “junk fees”) such as valet trash fees, package handling fees, utility fees, fees to distribute utility bills, verification fees when tenant use renters’ insurance providers outside of the management company, and media/smart home packages, among numerous others that tenants could not opt-out of even if they did not want or use the related services.  In December 2025, this action resulted in again a required change of leasing practices and a $23M settlement in favor of the FTC and $1M settlement in favor of the State of Colorado.

With the significant settlements in favor of the FTC and current review by the FTC’s focus on “junk fees” to determine if regulation is needed, States have begun to pass “junk fee” legislation and/or amend existing laws to refine the approach to address “junk fees.” As of September of 2025, more than twenty (20) States had enacted laws addressing rental housing “junk fees.”  The strongest State law addressing applications fees is Vermont’s law that outright prohibits the charging of any such fees. Many States have enacted caps or requirements tied to application fees, including requirements to return application fees in certain circumstances.  In addition to State laws addressing application fees to prospective tenants, some States have enacted legislation to address other specific fees such as late fee caps, convenience fees, move-in and move-out fees and repair or maintenance fees.  Also, various States have enacted legislation to require specific disclosure and documentation of fees. In fact, some States now require that lease agreements provide an itemization of any and all fees to tenants.  Finally, certain City and County local governments have stated to pass legislation to address “junk fees” such as Seattle, Washington, Ann Arbor, Michigan, Akron Ohio and New York City, New York.

As of May of 2026, there is pending legislation in Georgia, Illinois, Massachusetts and New York related to “junk fees.” In Georgia pending legislation has been written to prompt transparency and fairness with respect to rent pricing for residential properties, prohibiting landlords from failing to disclose the total rental price of any residential property and charging hidden fees for any residential property. In Illinois, the pending legislation generally provides that each recurring nonoptional fee must be on the real estate listing or an accompanying link to a website for the residential property and on the first page of the lease agreement in a clear and conspicuous manner as part of the total cost of the rent and provides that if such a fee is not explicitly included in the cost of rent, a landlord may not charge the fee on a recurring basis, and the tenant is not liable for the fee on a recurring basis.  In Massachusetts, there is a pending new act to regulate “junk fees” generally for rental housing. In New York, the pending legislation generally prohibits deceptive pricing methods that fail to provide information on mandatory fees for the sale or lease of any good or service, which may include services under a residential lease.  Finally, Maryland has had multiple pieces of legislation on “junk fees” fail during the legislative process. We expect representatives in Maryland to continue to work to put forward legislation on “junk fees” in hopes that Maryland will be another State that protects its residents in relation to “junk fees.”

As noted above, the legal landscape across the nation has changed and will continue to change in relation to “junk fees.” A lack of awareness of new laws is not a defense for failure to comply. Multi-family property owners and management companies should ensure they are aware of any and all relevant State and local legislation or even pending legislation at the State or local level and even possible proposed legislation at the Federal level. Continued changes to legislation and private action lawsuits are anticipated as the door has been opened for plaintiff attorneys to bring lawsuit on behalf of tenants for failure to comply with new legislation or for grey areas that have been created by the challenge the FTC is now bringing to multi-family property owners and managers.

While we wait to see if the FTC will enact legislation, a roadmap for changes at the Federal/FTC level in the operation of multi-family properties was contained in a settlement order issued by the FTC. The order sets forth disclosure requirements generally related to properly labeling fees, clear and conspicuous disclosure of all mandatory fees and the total monthly leasing expense, stating or providing the purpose for a fee and such others requirements to ensure accurate and prompt disclosure to potential tenants in advance of leasing and again upon the execution of leasing documentation.  In the absence of Federal, State or local laws, multi-family property owners and managers should understand and use the current FTC roadmap to advise employees and update operations, leasing practices and leasing documentation.

In summary, new legislation and lawsuits are signaling an aggressive new approach to enforcing landlord-tenant laws and these cases are setting new precedent. Multi-family property owners and managers need to take notice and consider revising operations and leasing documents now to protect against consumer actions, potential fines and/or settlement cost, all creating monetary exposure and liability risks.

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