Disclosing all fees to tenants

Throughout this country the cost to rent a home or apartment has substantially increased in the last few years to a point where many either can’t afford a rental residence, or renting stretches their budgets so thin they need to find the rent money in their other expenditures, such as food and medicine.

Coupled with the recent report that 60 percent of Americans are living paycheck to paycheck, knowing all the costs associated with a rental before entering the lease is critical.

Fees are being imposed by landlords in addition to rent. Each fee may be small, $10 here, and $15 there, but they add up and increase the monthly nut. Fees are especially harmful to renters with a tight budget who are often young people, people with lower levels of education or people for whom English is a second language who did not anticipate fees in addition to rent.

Some fees have been imposed for years, such as fees for applications, credit checks, parking, trash pickup, pest control, move-ins and move-outs. But considering that apartment rents have increased 25 percent in an 18-month period beginning in 2021, adding fees to an already obese rent can destroy the budget of many families.

Adding to the problem is the plethora of new fees larger landlords are adding to the menu of traditional fees. For example, landlords are now imposing fees for smart doorbells and other technology, valet trash pickup so tenants need not walk 50 yards to a dumpster with a bag of trash, maintenance of equipment, convenience fees, elevator fees, administrative fees, pet fees, insurance fees, online payment fees, and service call fees.

One large landlord imposes a “January fee” at the start of each year. One of the nation’s largest landlords, Invitation Homes, reported to the SEC that its non-rent income that includes fees, grew at twice the rate of its rental revenue. As with the airlines, fees have become an important revenue source, and other large landlords have reported a doubling of fee income.

On one hand, landlords claim fees help defray rising costs and allow them to provide services that renters really want. On the other hand, renters are often surprised when they are billed for recurring fees they did not expect but had agreed to. Calling many of these costs “junk fees” in July, the federal government convinced Affordablehousing.com, Zillow and Apartments.com to require listing landlords to disclose all fees and costs to be incurred by tenants in connection with rentals.

That’s a good start, and while a federal law would help, it is unlikely Congress will act to require landlords to do this simple thing.

In Maryland fees must be disclosed in the residential lease and a prospective tenant has the right to receive a blank lease before signing the actual lease. Problem is, these leases are often verbose and written in legal language so that many low income, or non-English proficient, renters may not understand the contents of the lease including what fees they are agreeing to pay. The problems caused by not knowing the extent of fees before committing to rent can be severe, but the solution is simple.

That is to say, the Maryland legislature should consider passing a bill that requires all Maryland landlords to disclose in simple terms, outside the contents of the lease, the fees that will be imposed, their frequency, amount and purpose. This list would be required to be provided days in advance of signing a lease to enable a prospective tenant to make meaningful cost comparisons of different properties.

New fees would be subject to at least a notice 90 days before the lease expires. The point of this editorial is not to suggest landlords should not be able to collect fees; it is to require that these fees be clearly stated in an understandable manner before the lease is signed. It’s done with cars and mortgages. It should not be a problem to do this with rental residences.

EDITORIAL ADVISORY BOARD MEMBERS

James B. Astrachan, Chair

James K. Archibald

Gary E. Bair

Andre M. Davis

Eric Easton

Arthur F. Fergenson

Nancy Forster

Susan Francis

Leigh Goodmark

Julie C. Janofsky

Ericka N. King

Susan F. Martielli

Angela W. Russell

Debra G. Schubert

H. Mark Stichel

The Daily Record Editorial Advisory Board is composed of members of the legal profession who serve voluntarily and are independent of The Daily Record. Through their ongoing exchange of views, members of the board attempt to develop consensus on issues of importance to the bench, bar and public. When their minds meet, unsigned opinions will result. When they differ, or if a conflict exists, majority views and the names of members who do not participate will appear. Members of the community are invited to contribute letters to the editor and/or columns about opinions expressed by the Editorial Advisory Board.