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Colorado lawsuit challenges legality of landlord-imposed ‘junk fees’ for basic services

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Sara Wilson

(Colorado Newsline) A Colorado resident brought a proposed class-action lawsuit against the corporate apartment management company Greystar last week, alleging that the company charges unnecessary hidden fees on top of monthly rent to pad their bottom line.

The lawsuit alleges that these fees “operate as a hidden tax” on tenants.

“Late disclosure of junk fees is particularly problematic in apartment rental contracts, where tenants may not learn of the fees (or see a copy of their lease) until shortly before move-in, after they have given notice to a prior landlord or invested significant moving expenses,” the lawsuit reads.

It was filed in Denver District Court on behalf of Nichole Collins, who lived in a Greystar building until April 2023, after they doubled the rent of her unit.

“Greystar acquired management of Nichole’s apartment complex after she’d already moved in,” Jason Legg, lead attorney from Justice for the People Legal Center, said in a statement. “Greystar sent her a lease renewal offer that only disclosed the headline rent, she accepted the offer, then learned of the mandatory fees later when they sent their form lease — analogous to the experience of new tenants provided a ‘welcome home letter’ that doesn’t include the fees and then, after they’re locked in, the form lease that imposes them.”

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Justice for the People Legal Center and Towards Justice are representing Collins.

The case focuses specifically on Greystar’s pest control, valet trash and billing fees, which can add nearly $40 per month to a tenant’s financial obligation on top of rent. It alleges that tenants are often not aware of the fees until they are about to move in and presented with the Form Lease, when it is often too late to backtrack. At that point, a tenant has already paid non-refundable application fees, administrative fees, security deposits, pet deposits and at least the first month’s rent.

The fees, the lawsuit contends, do not provide tenants with any additional benefits beyond what Greystar is required to provide as a landlord, and the actual costs of providing services like trash pickup and pest control are much lower than the charged fees.

The fees shift the cost of complying with the warranty of habitability — the law that requires landlords to maintain units to basic standards — onto tenants, which the lawsuit claims is illegal. In Colorado, for example, landlords are required to provide pest control.

A Federal Trade Commission proposal would ban hidden junk fees, which the agency says cost consumers in all sectors tens of billions of dollars per year. Under the rule, businesses would have to disclose all mandatory fees up front.

Greystar is the largest apartment management company in the country and owns more than $45 billion in assets. It owns over 45,000 units in Colorado.

“Greystar is the largest residential property management company in Colorado. Its practices of charging junk fees significantly impact how others behave in the market. Colorado renters face an affordability crisis, and the Challenged Fees make leasing less affordable for tens of thousands of Coloradans,” the lawsuit reads.

The lawsuit alleges a breach of the Colorado Consumer Protection Act and breach of contract.

Greystar did not respond to multiple requests for comment.

Colorado Newsline is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Colorado Newsline maintains editorial independence. Contact Editor Quentin Young for questions: Follow Colorado Newsline on Facebook and Twitter.