Hidden ‘junk fees’ for trash pickup or common areas shock, anger tenants

John Hall and Monica Bahena thought they’d found the perfect apartment in suburban Maryland — that is, until it became the source of enough financial and emotional stress to drive them out of the state.

At $1,729, the rent for the one-bedroom unit in College Park that they saw on the Zillow real estate listing site was a bit over the couple’s budget. But the apartment was newly renovated and closer to their jobs. They signed a lease for Unit 3073 at the Camden College Park Apartments and set the date for their move, lining up a friend’s help to save on the cost.

Then they came to the building to finalize the paperwork and learned about the more than $150 in mandatory extra monthly fees for a “technology package” and “front door trash pickup” — charges that consumer advocates say are part of a broader problem with “junk fees” that corporations and private equity firms that own many apartment buildings are working into lease agreements to drive up profits.

Eight months later, the couple are living in an apartment they can’t really afford as they await the outcome of a class-action lawsuit they joined against their building’s owner, Houston-based Camden Development, one of the country’s largest apartment developers and landlords.

“It was deceptive marketing,” said Hall, 29, a high school teacher. “You get in, you apply, and then all of a sudden there are all of these fees.”

Across the country, consumer advocates and policymakers have warned of a rise in extra fees charged by companies that are not obvious in the listed price. Last year, as part of a broader crackdown on these fees in industries like banking and aviation, President Joe Biden announced an effort to tackle junk fees in rental housing, though it focused on things like voluntary transparency from home search sites rather than actual regulation.

In March, Federal Communications Commission Chairwoman Jessica Rosenworcel released a proposal that, if enacted, would protect people like Hall and Bahena from being forced to pay for a building-wide broadband plan.

But for now, these surprise fees continue to proliferate in rental housing, disproportionately affecting communities of color, where both the tendency to rent and the financial burden caused by it are higher, according to a National Consumer Law Center brief that called for a broad crackdown on the practice by state and local governments.

Hall and Bahena said they noticed a mention of possible fees on the Zillow ad for their apartment and in the lease agreement but assumed they were one-time or optional charges.

“We thought, we don’t need to use that,” Hall recalled about seeing the fees for the technology package and trash pickup. “We can throw away our own trash, and we already get a discount with Verizon.”

But they were told the technology package ($118) and trash charge ($37) were mandatory, Hall said. There was also a one-time $450 “community fee,” which one Camden manager explained to a complaining tenant on Yelp is for upkeep of common areas and amenities, according to the lawsuit.

“We’re just regular people,” said Bahena, 33, who does administrative work in a medical office. “We’re trying to make a living and make the best of it. You don’t expect people to take advantage of you.”

The class-action suit against Camden describes the company as “a pioneer in the area of ‘ancillary income,’ meaning the collection of fees that are billed separately from the monthly rent.”

“The Company’s deceptive trade practices have been a boon for its executives and shareholders,” the lawsuit’s complaint said.

A spokesperson for Camden said the company does not comment on active litigation. But the company has told its investors that it favors the extras.

On a 2017 Camden earnings call with investors, one analyst noted that “the technology package has been a pretty good success past couple of years” and asked about additional “revenue growth initiatives.”

Alex Jessett, Camden’s chief financial officer, responded that the technology package had added 65 basis points — or 0.65% — to the company’s revenue that year, and that “we’re always looking for new initiatives.”

Ariel Nelson, a National Consumer Law Center attorney who focuses on rental housing, said the growing role of private equity and other corporate owners of rental housing has contributed to the spread of junk fees.

“This is a profit mechanism that companies have identified,” she said. “I think that’s pretty clearly what’s happening.”

Maryland Del. Vaughn Stewart (D), who is also an attorney representing Hall and Bahena in the class-action suit, said investor pressure to come up with new revenue streams is another contributor.

The practice of hiding such fees places landlords who decide to share the full price for their units at a competitive disadvantage, Stewart said, adding that Camden’s practices are in violation of the state’s Consumer Protection Act, which prohibits deceptive trade practices, among other provisions.

Camden’s website includes its fees but they’re only visible after a prospective tenant clicks through several screens and, even then, it’s not clear which fees are mandatory, the lawsuit complaint states.

On third-party websites such as Zillow, there is no information about these fees, according to the suit.

A Zillow spokesperson said the company relies on landlords to share whatever the cost of a unit will be.

“Our listings display fee information as provided by housing providers, and we are committed to working with them to uphold standards in fee disclosure and promote a transparent rental market,” the spokesperson said in a statement.

Hall and Bahena said their unexpectedly high rent has changed their lives, leading to a recent decision to break their lease and leave not only the building but also the state of Maryland.

“It kind of ruined everything, to be honest,” Hall said. He’s taken on extra work on top of his teaching job, he said, and he had to delay plans to buy an engagement ring for Bahena, though they’re now engaged.

He also has ulcerative colitis, a condition affecting the intestines that, Hall said, was exacerbated by the financial and emotional stress brought by their scramble to make rent payments, landing him in the hospital.

“Honestly, we blame it all on this damn apartment and on Camden,” Hall said. “It’s really changed our entire lives.”