Fees can make your rent even higher

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Renters have a growing number of government regulators on their side

Renters are not only facing higher rents but now some apartment management companies are adding insult to injury by tacking on extra – and possibly unjustified – junk fees. 

A ConsumerAffairs reader – Dale in Wisconsin – wrote to us recently to say that his apartment complex' payment management company, AppFolio, is putting forth a “stealthy new money grab ... [that] should be brought to the fore.”

“Like thousands of other property management companies, my landlord uses AppFolio to process my rent and utility payments. I've always paid via eCheck because there is no fee - in fact, the only way I've ever been able to pay my rent without a fee is via eCheck,” Dale wrote.

“My landlord does not accept paper checks, so I'm now being forced to pay a $2.49 fee to pay my rent via eCheck every single month. Forced to pay a fee just to pay my rent! The most outrageous part of this is that there is no cost for AppFolio to process ACH payments sent via eCheck - this is purely a cash grab!”

Dale said his messages to AppFolio went unanswered and that his landlord is claiming that they’re caught in the middle. Why? Because they’re not getting any of AppFolio’s fee nor do they want to start accepting paper checks each month from its 900 tenants, either.

On its website, AppFolio says it manages over 7 million units. If all of those tenants are paying a fee on top of their rent, that adds up to some serious money. 

But, for what?

ConsumerAffairs asked AppFolio’s representatives for an explanation of the fee, as well as other questions, but didn't receive an answer.

The White House isn’t happy about this, either

Is this – as Dale suggests – a “money grab”? Or are rental companies just copycatting what the banking and finance world is doing in regard to transaction/service fees? Whatever the reason, the Biden administration has its heart set on being the Chief Party Pooper on junk fees. 

On top of going after ticket sellers and airlines, regulators have gone after Marriott, and Airbnb. Now, the administration has rental housing fees on its hit list.

“Even after renters secure housing, they are often surprised to be charged mandatory fees on top of their rent, including ‘convenience fees’ to pay rent online, fees for things like mail sorting and trash collection, and even so-called ‘January fees’ charged for no clear reason at the beginning of a new calendar year,” the president said.

“Hidden fees not only take money out of people’s pockets, they also make it more difficult to comparison shop. A prospective renter may choose one apartment over another, thinking it is less expensive, only to learn that after fees and other add-ons the actual cost for their chosen apartment is much higher than they expected or can afford.”

The White House’s answer – er, crackdown? For starters, it’s received commitments from major rental housing platforms – Zillow, Apartments.com, and AffordableHousing.com – who have told Biden that, yes, they’ll be transparent about fees and will provide consumers with total, upfront cost information on rental properties.

Politics being what it is, this could take a while, but several states are already taking legislative action. RouteFifty reports that state legislatures in Connecticut, Virginia, Washington, Vermont, and Rhode Island have enacted laws that cap screening fees or done away with them altogether. 

And other states – including California, Maryland and Washington – allow renters to provide their own screening reports. Minnesota is going the transparency route, requiring all mandatory fees and deposits to be plainly spelled out on the first page of a lease agreement. 

What can renters do about this from their end?

What can consumers do to stop this if they're confronted with these fees? 

Barry S. Coleman, vice president of Program Management and Education at the National Foundation for Credit Counseling (NFCC), told ConsumerAffairs that from a consumer advice standpoint, it would be advisable for people to pay close attention to their rental agreement before signing. 

“If a lease does not include a requirement for cash, the tenant may have the right to pay by check, money order, or other common payment options. If a written lease does not include a specific reference for how to make the monthly payment, tenants are entitled to make payments by personal check,” Coleman said.

“Also, consumers may want to check with the attorney general’s office in the state where they are renting to determine the legality of any such fees as each state could have different requirements.” 

He said that the NFCC can also help renters figure out the pitfalls when it comes to lease agreements and debt management.

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