Dive Brief:
- The city of Baltimore has filed a lawsuit against Yardi, RentCafe and Pennrose Management Co., claiming that they charged tenants hidden fees to pay rent in violation of the city’s Consumer Protection Ordinance, according to a Monday press release from Mayor Brandon Scott’s office.
- Yardi owns RentCafe, while Pennrose Management Co. uses the platform in its capacity as owner and manager of hundreds of apartments for low-income residents in Baltimore, per the release. Scott and the City Council filed the case on Monday, titled Mayor and City Council of Baltimore vs. Yardi Systems, LLC, et al., in the Circuit Court for Baltimore City.
- The lawsuit alleges that RentCafe charges tenants “pay to pay” fees for rent by steering them “toward fee-generating payment options by obscuring the fees associated with each payment method,” per the release. Multifamily Dive reached out to the companies for comment but did not hear back by the time of publication.
Dive Insight:
The lawsuit claims that RentCafe, one of the country’s largest property management platforms, surprises “vulnerable tenants with compulsory junk fees,” per the release. Specifically, it alleges that the platform hides payment charge information across multiple web pages and in fine print, and does not “disclose the fee associated with a selected payment method until the last step of the payment flow.”
Such practices are becoming increasingly common in the apartment industry, according to the release, and can significantly increase the overall cost of housing.
“These illegal junk fees effectively raise the rent for thousands of Baltimore residents,” Scott said in the release. “This is about holding these businesses accountable for their deceptive practices and protecting Baltimoreans' hard-earned money.”
In response, jurisdictions are beginning to crack down on such charges, and a growing number of localities now require fee disclosure up front.
In August, for example, Seattle passed a ban on rental “junk fees,” including administrative service charges, pet rent and package fees, in an effort to make the city’s rental market more transparent and affordable. The ordinance requires clear, upfront pricing for tenants and strengthens enforcement mechanisms.
Earlier this year, Washington, D.C., also tightened its existing consumer protection laws against “excessive fees throughout the rental process,” according to an April press release from D.C. Attorney General Brian Schwalb’s office.
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