Attorney General Phil Weiser, Federal Trade Commission sue Greystar for deceptively advertising apartment rents, charging hidden fees

Attorney General Phil Weiser, Federal Trade Commission sue Greystar for deceptively advertising apartment rents, charging hidden fees

Jan. 16, 2025 (DENVER)-Attorney General Phil Weiser today filed a lawsuit in Denver federal district court against corporate landlord Greystar (opens new tab) for using deceptive advertising to lure consumers into applying for rental housing, and then fleecing those tenants out of millions of dollars by charging mandatory, fixed fees not included in the advertised price for an apartment.

Greystar is one of the largest providers of rental housing in Colorado, managing approximately 45,000 units in the state. An investigation led by the Federal Trade Commission's Bureau of Consumer Protection uncovered Greystar's deceptive pricing of rental housing in Colorado and other states since 2019. After attracting prospective tenants with deceptively low rental prices, the lawsuit explains how Greystar failed to adequately disclose mandatory recurring fees charged to tenants for things such as pest control, valet trash service, package concierge service, utility administration fees, and certain amenities fees.

Many of these fees are hidden and not listed in the rental advertisements either on third-party listing service websites such as Zillow or Apartments.com or on the Greystar property website. Even when Greystar lists the hidden fees before tenants apply, the fee information is confusing and in many cases contradicts other representations on the webpage - and the advertised price excludes the fees. The prospective tenant often cannot see the actual fees or the total amount they are required to pay until they receive the lease, which usually occurs after they have paid an application fee.

Prospective tenants have limited options for recourse. If a prospective tenant realizes the true price before signing a lease and attempts to withdraw their application, they are unable to recoup the application fees, will have likely sacrificed the opportunity to explore other options, and may well have already made irreversible steps to make the move. If a tenant has already signed a lease and wants to cancel after discovering the true price, Greystar charges significant lease termination fees, sometimes totaling thousands of dollars. Given the considerable termination fees, the inability to recoup money already spent, and the difficulty of finding a new home, most tenants are effectively locked into leases that require them to pay the higher-than-advertised cost.

Weiser said that because the advertised rental price does not include all mandatory fees, Greystar misleads prospective tenants about the actual cost to rent an apartment, which is a violation of the Colorado Consumer Protection Act.

"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. Through their actions, Greystar is thwarting apartment hunters from comparison shopping and choosing a home that fits within their budget," said Weiser. "To the extent that other corporate landlords are not advertising their all-in pricing and are engaging in similar tactics, they are on notice that such conduct is illegal and will not be tolerated in Colorado."

"The FTC is suing Greystar for deceptively advertising low monthly rents only to later saddle tenants with hundreds of dollars of hidden junk fees," said FTC Chair Lina M. Khan. "The FTC should continue its work taking on corporate landlords that use illegal tactics to jack up rent, exploit tenants, and deprive Americans of safe and affordable housing."

The lawsuit seeks an injunction to prevent Greystar from violating state and federal law in the future, monetary relief for consumers, and civil penalties for the state of Colorado.

Today's action is separate from an antitrust lawsuit Weiser joined last week alleging that six of the nation's largest landlords, including Greystar, use RealPage software to engage in algorithmic pricing schemes that hike rents for tenants.

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