The Federal Trade Commission is planning to file a suit against Greystar, alleging that the country’s largest apartment landlord charged tenants hidden fees.
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The fees, related to things like pest control, trash services and tenant background checks, were not properly disclosed to prospective tenants during the apartment application process, the suit reportedly alleges.
News of the potential suit was first reported by The Wall Street Journal and later confirmed by Bloomberg. The FTC declined to comment.
A source familiar with the probe confirmed it was focused on millions of dollars in hidden fees that range from tens to hundreds of dollars a month and aren’t disclosed to potential renters until late in the application process.
“Greystar has worked hard to lead the industry toward improved fee disclosures and has taken proactive steps over the last several years to promote greater fee transparency," a spokesperson said in an email to Bisnow. "The most effective path to achieving uniform and consistent fee disclosures across the industry is through clear regulatory guidelines which do not yet exist in the rental space.”
Established in 1993, Greystar has grown to be a commercial real estate industry giant touching several corners of the sector with more than 27,000 employees and 60 global offices. The investment firm has $29B in equity under management, according to its website.
News of the potential charges against Greystar come less than a week after the investment firm was one of six commercial real estate firms added to the U.S. Department of Justice’s expanded antitrust suit against RealPage.
In that case, which was initially focused on RealPage’s algorithmically controlled rent-setting software, Greystar is accused of trading proprietary information and coordinating with some of the country’s other largest landlords on pandemic-era strategies.
The DOJ’s escalation has confounded real estate industry professionals, who question the DOJ’s sense and motive for adding landlords to a case that had previously only targeted RealPage.
Greystar denied any wrongdoing in the antitrust case and committed to fighting the allegations.
“Greystar has and will conduct its business with the utmost integrity,” a spokesperson said in a statement at the time. “At no time did Greystar engage in any anti-competitive practices.”
The FTC, led by Chair Lina Khan, has helped spearhead outgoing President Joe Biden’s war on hidden fees that has led to new regulations and reforms for airlines, credit card companies and the event ticket industry.
President-elect Donald Trump has nominated Andrew Ferguson, a former staffer for Republican Sen. Mitch McConnell and Supreme Court Justice Clarence Thomas, to replace Khan.
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