Increasingly, surprise rental charges are becoming a nasty reality. You sign a lease thinking you understand the monthly cost, only to have extra charges tacked on — garbage collection fees, mail handling fees, pet surcharges, parking charges, even “convenience fees” for paying digitally. And that’s before you count the application fees landlords often demand just to be considered.
It’s frustrating when you’re navigating an already costly rental market. How much will you actually pay at one place compared with another?
Now three major online rental services are stepping in to help renters see the true cost. Zillow, Apartments.com and AffordableHousing.com plan to display those additional recurring fees that raise the real monthly price of a unit. That transparency should help you understand the full cost when choosing where to live.
These moves align with the Biden administration’s broader effort to rein in so-called “junk fees.”
“Renters are already struggling to find safe and stable housing during a severe affordable housing shortage,” said April Kuehnhoff, senior attorney at the National Consumer Law Center, which has examined this issue. “Now, on top of sky-high rent prices, renters are being forced to pay excessive and sometimes illegal late fees, as well as convenience fees, roommate fees, and even a fee just because it’s January!”
New Tools Will Make Rental Costs Clearer
Here’s what these rental listing sites are implementing to address the issue:
- Zillow will introduce a “cost of renting summary” on active apartment listings that aggregates all additional charges.
- Apartments.com plans to roll out a calculator this year to help renters figure out the all-in price for a unit.
- AffordableHousing.com, the country’s largest online resource focused on affordable housing, will require landlords to disclose all refundable and nonrefundable fees and charges up front in their ads.
These changes will make it easier to comparison-shop and remove much of the uncertainty around advertised rents.
The National Consumer Law Center recently surveyed renters about additional charges. Almost 90% of respondents said their landlords had levied rental application fees. Nearly as many (87%) reported being hit with excessive late charges.
More than half of those surveyed said they’d been assessed utility-related fees (73%), processing or administrative charges (68%), convenience fees (60%), insurance fees (59%) and notice fees (56%). The report even highlights a “January fee” — a charge two Minnesota renters were billed in January for no apparent reason.
The Heavy Toll of Application Fees
Application fees are particularly problematic — and widespread. “Application fees are pervasive within the rental market,” the U.S. Department of Housing and Urban Development noted in a report.
Here’s why they’re such an issue: Most prospective tenants contact several landlords or property managers and tour multiple units while searching.
Typically, each time you apply for a rental, you’re asked to pay an application fee. Those charges can range from about $50 to several hundred dollars and are purportedly intended to cover background and credit checks.
A tighter national rental market has prompted more renters to apply to two or more properties at once.
“Even if prospective renters are charged modest application fees, the fact that most prospective renters apply to at least one unit means these costs can add up quickly,” HUD said. “Because tenant screening reports may include inaccurate information, prospective renters may pay multiple application fees only to be repeatedly rejected because of those inaccuracies.”
In short, you could spend a lot on application fees and still be turned down.
Cracking Down on Junk Fees
Why this focus?
As noted earlier, this is part of the Biden administration’s drive to curb what it labels “junk fees.” The administration is also spotlighting extra charges imposed by airlines and by ticketing services for concerts and live events.
The goal is that greater disclosure of rental fees will discourage landlords and management companies from sneaking unpleasant surprise charges onto tenants’ bills.
How Renters Can Respond
At a minimum, the new features from Zillow, Apartments.com and AffordableHousing.com should give renters better tools for comparing offerings.
Renting is like any financial transaction: you’re in a stronger position when you have multiple options. That lets you weigh alternatives and negotiate from a place of knowledge.
If you plan to bargain with a landlord or property manager, research the local rental market first. Know what comparable units charge and what fees they include.
Always have a backup option so you can walk away if terms aren’t acceptable.
No one appreciates an unpleasant surprise.
Jordan Hale ([email protected]) is a senior writer at Savinly.
