F. Peter Silva II
SAN DIEGO - A proposed federal class action lawsuit has accused a major rental housing supplier in Southern California of piling multiple “junk fees” onto advertised rental prices in violation of state law – a practice the plaintiffs say only exacerbates the state’s housing crisis.
Los Angeles County resident Juhyun So and San Diego resident Kaidi Wu filed the lawsuit April 29 in the Southern District of California. Their complaint accuses Greystar California and Greystar Real Estate Partners LLC of engaging in “bait-and-switch” tactics and “drip pricing” to lure in prospective renters with pricing that appears cheaper than the final price quote.
Greystar boosts the rental amounts advertised by adding items such as “New Trash account fee,” “Trash Administrative fee,” other trash fees, and a $3-per-month pest-control fee, according to the lawsuit.
“Like plaintiffs, tens of thousands of Californians have been impacted by Greystar’s unlawful junk-fee practices, which add up to tens of millions of dollars each year in illegal charges borne by consumers in the most critical of transactions,” the complaint says.
Such junk-fee practices allegedly violate the Honest Pricing Act, a state law that took effect last year, the plaintiffs claim. The law bans advertising a price for a good or service that fails to include all of the mandated charges or fees.
“These extra hidden fees prevent consumers, such as plaintiffs and the proposed class, from engaging in meaningful comparison shopping between apartments when deciding where to live, which also stifles competition in the rental market,” the complaint alleges. “By shifting the costs of pest control and trash services to tenants, Greystar unlawfully increases its profits from every rental unit where these fees are charged.”
Greystar may not be the only rental supplier that engages in such practices, but the sheer number of properties it manages around the state has a major impact on the market, according to one of the plaintiffs’ attorneys, F. Peter Silva II, of the firm of Tycko & Zavareei LLP.
“Greystar is the largest residential property manager in the United States, overseeing hundreds of buildings and thousands of individual apartments in Southern California alone,” Silva told the Southern California Record in an email. “... The junk fees drive up prices and contribute to California’s housing crisis by making it even harder for families to put roofs over their heads. Not all property managers engage in these illegal practices, but we are actively investigating similar conduct by other large corporately owned property management companies.”
Greystar did not respond to requests for comment about the proposed class action.
Plaintiff Juhyun So ultimately agreed to accept Greystar’s requirement to pay the trash and pest-control fees, allegedly due to the pressures of needing to relocate. But the lawsuit indicates that she paid $751 in mandatory junk fees as part of her rental contract.
Last year, the Biden administration estimated that junk fees cost Americans more than $90 billion annually. Just prior to the end of President Biden’s term, the Federal Trade Commission and the state of Colorado filed an enforcement action against Greystar for allegedly burdening tenants with hundreds of dollars in hidden fees.
The lawsuit advanced by So and Wu seeks class certification, a declaration that Greystar violated California law and an award of damages, including statutory, monetary and punitive damages, as well as attorney fees and court costs.
