D.C. AG Sues Multifamily REIT Over 'Illegal Hidden Fees'

The District is waging a legal battle against one of the country’s largest multifamily landlords, alleging that it misled tenants about rental prices by charging illegal “junk fees” at its sole D.C. apartment building. 

D.C. Attorney General Brian Schwalb’s office announced Monday it is suing Mid-America Apartment Communities, or MAA, for its fee practices at 1499 Massachusetts Ave. NW. 

The 269-unit property, built in 2002, sits between Logan Circle and Dupont Circle.

In its suit, Schwalb's office alleges that the REIT advertised starting rents that it called “deceptively low” but then charged extra mandatory fees on top of that for services like community space upkeep and application processing fees. 

This resulted in tenants being misled about the true cost of their rent, the office says. 

“The rent you see advertised should be the rent you pay,” Schwalb said in a press release.  

“MAA has been nickel-and-diming DC tenants with illegal hidden fees and concealing the true price of leasing their apartments. DC housing is already too expensive, and my office is putting an end to practices that prey on tenants and those looking for clear, reliable information when searching for a place to live,” he added.

The suit claims MAA violated D.C.'s Consumer Protection Procedures Act. 

MAA didn't respond to Bisnow's request for comment on the suit. 

The REIT charged tenants with a $385 application “processing fee” that Schwalb's office says “served no purpose” in addition to an application fee.

It also charged a mandatory “community fee” of $18 per month. 

Schwalb’s office said D.C. law prohibits landlords from charging fees on top of rent to keep “homes and common areas safe, secure and in good repair” and said it’s the landlord’s responsibility to take on that upkeep in exchange for rent. 

MAA also charged tenants a $350 “roommate release fee” if one of the roommates departed before the end of the lease, well above the $54 tenant replacement fee that D.C. law allows. The remaining tenant would then need to reapply and pay a new application fee, according to Schwalb's office.  

On top of the illegality of these fees, the suit claims MAA obscured the entirety of the fees tenants were expected to pay. 

Through the lawsuit, Schwalb’s office is seeking to stop these practices of “misleading” prospective tenants and charging these “illegal junk fees,” the release says. It’s also looking for restitution for tenants and civil penalties and costs payable to D.C.

MAA owns the property as part of a joint venture with an unidentified partner, according to its latest annual report. 

The REIT has sought buyers for the 1499 Massachusetts Ave. NW building. Berkadia has a brochure for the building on its website.

Of the more than 300 apartment properties MAA owns across the U.S., it has just one other in the D.C. region, a 361-unit property in Rockville, according to its year-end report. The publicly traded REIT has a market cap of $15B.