Landlords Target Renters With Predatory Junk Fees

Photo by Tony Webster on Flickr; CC by 2.0 license

By Katie Wilson

Editor’s note: This story first appeared in The Progressive, and is reprinted here with permission.

Last summer, Seattle renter Jake Thoennes received a written notice from his landlord demanding that he remove the potted plants from his balcony within ten days. That might sound absurd, especially given that Thoennes’ lease permitted planting flowers on balconies. But here’s the kicker: The notice came with a $75 “Notice Fee.” This hefty fee was charged “for preparing and giving the notice” that the plants had to go.

When President Joe Biden announced an offensive against “junk fees” in his State of the Union address, many renters around the United States must have been nodding their heads knowingly. The nation’s 44 million renter households, especially tenants of corporate landlords, are facing an explosion of bogus fees.

Like the hidden charges that appear when you buy a ticket to a sporting event, these fees are not correlated with any tangible service being provided, or with any special effort or cost incurred by businesses. They are predatory fees that landlords charge simply because they can, and today’s rental market appears to be amplifying rather than correcting them.

Rental “junk fees” are arguably more noxious than those attached to consumer purchases. They can cause families to lose their housing and become homeless. They can tank people’s credit scores and imperil their ability to successfully apply for rental housing in the future.

Notice delivery fees like the one imposed by Thoennes’ landlord are becoming more common, according to Devin Glaser, an attorney who represents tenants in legal disputes with their landlords. “More often than not the landlords just surprise people with a fee after delivering a notice,” he said.

But sometimes a new policy is officially announced. “Hello Residents,” the property manager at Sorento Flats Apartments in Seattle began in an email to tenants in December 2022. “Sorento will now be implementing notice fees. This means that any notices given in regards to lease violations and or past due payments will accrue a notice fee. The notice fee is: $50.00 and will be issued per violation.”

In addition to imposing notice delivery fees, landlords are increasingly adding on nonrefundable charges when a tenant signs a lease. Renter Corina Pfeil paid a $300 “administrative fee” and a $162.75 “application fee” when she signed her second-year lease renewal last fall. 

This new fee, the email emphasized, is not the same as a late fee. Rather, “the notice fee will be in addition to the late fee and you will be responsible to pay both fees along with the past due balance. Thank you for your tenancy.”

In addition to imposing notice delivery fees, landlords are increasingly adding on nonrefundable charges when a tenant signs a lease. Renter Corina Pfeil paid a $300 “administrative fee” and a $162.75 “application fee” when she signed her second-year lease renewal last fall.

“They told me the administrative fee was for employee time and whatever it took to process the lease,” said Pfeil, who serves as a city council member in Kenmore. How about the $162.75? “They were never really clear about that.”

Washington Democratic State Representative Nicole Macri, a longtime advocate for stronger renter protections, explains that fees like these can be used in a discriminatory manner: “People looking for rental housing have reported to me that a landlord said something like, ‘Normally I don’t rent to people like you, but if you pay this fee, we can work it out,'” Macri said.

That means the most vulnerable renters—people with imperfect credit scores or criminal histories, as well as low-income and Black and brown families—may be the most likely to get stuck with additional fees.

Lease-signing fees like these are not a universal practice, as my own experience as a Seattle renter highlights. I’ve lived in one building since 2018 and signed five leases in that time. The property is managed by a company that oversees over 6,000 units in the Seattle area and is known neither as an especially good nor an especially bad actor; it gets a measly two stars on Yelp. But never once have I been asked to pay any kind of administrative fee for the privilege of signing a lease. Why should I? I pay a lot of rent to my landlord every single month.

“The property management did not tell me, ‘Oh, by the way, you will have to go month-to-month, you can’t sign a new lease,’” Kirkland renter Lynda Hardwick said. And that meant paying an extra monthly fee of almost $600—on top of rent and the repayment plan.

So does Pfeil. On top of the lease renewal fees, her landlord raised her rent from $1,793 a month to $2,043 a month—an increase of 14 percent. She did have the option not to sign a new fixed-term lease. Instead, she could have let her tenancy convert automatically to a month-to-month lease. But, she said, “if I went month-to-month it would be $817 a month more.” Her rent would have jumped to $2,860, or a total increase of nearly 60 percent.

Month-to-month fees are not a new phenomenon, but Glaser and other attorneys I spoke with said they appear to be increasing in prevalence and magnitude. In part, this may be a response to regulation. In 2021, the Washington State legislature passed a Just Cause Eviction law, requiring landlords to cite a good reason when evicting a tenant. This law, however, exempts many fixed-term leases, allowing landlords to force a tenant out at the end of a lease for no stated reason. The exemption creates an extra incentive for landlords to keep tenants on fixed-term leases, and charging prohibitive month-to-month fees is one way to do that.

But some landlords seem to be pushing tenants into month-to-month leases with outrageous fees. A landlord will simply let a tenant’s lease expire without offering a new one, and months later the tenant will be informed that thousands of dollars in month-to-month fees have been accumulating on the ledger. This is also illegal, since Washington state law requires sixty days’ written notice of any rent increase, and a number of local jurisdictions have established even higher notice standards.

Lynda Hardwick, a renter in Kirkland, found herself trapped in a different way. After losing a major source of income during the COVID-19 pandemic and falling behind on rent, she worked out a repayment plan with her landlord. When her lease expired last fall, with $1,800 left to pay off, she got a nasty surprise: She couldn’t renew her lease.

“The property management did not tell me [upfront]… ‘Oh, by the way, you will have to go month-to-month, you can’t sign a new lease,’” she said. And that meant paying an extra monthly fee of almost $600—on top of rent and the repayment plan.

“That should have been disclosed, because I would not have gotten into the situation I got into,” Hardwick adds. When she objected and sought legal assistance, “they pulled out of the repayment program and really just started messing with me.” Finally, after Hardwick made it clear she was prepared to go to court, the landlord offered what she considered a reasonable month-to-month rate and repayment plan.

Month-to-month fees, administrative fees, and notice delivery fees aren’t the only ways that tenants are being fleeced. The experts I spoke with named other creative strategies some landlords are using to squeeze extra money from renters—fees for turning on the HVAC or replacing an air filter, non-refundable pet fees and monthly pet rent, “service fees” attached to each monthly rent payment, and monthly “billing fees” on top of utilities charges.

“My anxiety level is through the roof, I’m not sleeping, I can’t make plans with friends because I have to prepare for the inevitable. I think [the national] mental health crisis is directly connected to this abuse of power that landlords are legally permitted to use.”—Seattle renter Jake Thoennes

All these fees have real impacts on people’s lives. Thoennes, Pfeil, and Hardwick all considered themselves relatively privileged and well-equipped to research and stand up for their rights.

“I’m a businessperson,” Hardwick said. “I feel bad for people who maybe don’t have jobs where they have to be savvy in business and how to negotiate. I feel bad for the average working person.” Nevertheless, she added, “I’m working 24/7 just to try to get my bills paid. I’m not going to not pay my credit cards. I’m not going to not pay my rent or my car payments. So it’s a struggle. You never know who’s having issues.”

Pfeil felt the financial pinch, too: “As a college student, my Pell Grant is two quarters past due of being processed by the college I’m attending. It was lean times. It was really difficult.”

Thoennes believes housing insecurity contributes to the rising tide of mental stress and illness in the U.S. No matter how ridiculous the pretext, receiving a ten-day notice stacked with punitive fees makes you feel that eviction could be just around the corner.

“My anxiety level is through the roof, I’m not sleeping, I can’t make plans with friends because I have to prepare for the inevitable,” he said. “I think this mental health crisis is directly connected to this abuse of power that landlords are legally permitted to use.”

So what can be done to contain the explosion of predatory rental fees? Lawmakers in Washington State are considering a couple of partial solutions. Legislators are now weighing House Bill 1389, sponsored by Rep. Macri and others, which would ban month-to-month fees and limit most rent increases to between 3 and 7 percent annually. And in Seattle, Councilmember Kshama Sawant is sponsoring legislation that would prohibit most notice delivery fees and cap late fees at $10 a month.

Thoennes sees a way forward, especially if renters can make common cause with the often underpaid property managers who are frequently caught between exploitative landlords and vulnerable tenants: “[If] the workers and the tenants… came together and put pressure on the system, maybe we could challenge the system to change.”

Katie Wilson is the general secretary of the Transit Riders Union and helps to coordinate the Stay Housed Stay Healthy Coalition, an alliance of over fifty organizations fighting for stronger renter protections in Seattle and King County.

3 thoughts on “Landlords Target Renters With Predatory Junk Fees”

  1. I wrote to my state legislators & senator to support bill 1389! I am a former state employee that lives minutes away from the state capitol. At my apartment complex, in addition to monthly rent & standard damage & move-in deposits, I paid or pay: $225 non refundable pet deposit in addition to the $225 refundable pet deposit, plus $25 pet rent per month. An $8.95 fee just to pay our monthly rent. $85 monthly utilities fee (sewer/water/trash) and we have no insight into our actual usage to adjust it. To receive non-USPS packages we have to pay $20 to sign up for package lockers that have a $3 per item per day fee. $250 non refundable administrative fee plus a non refundable $500 security deposit to secure the unit I wanted, but when I moved in and tried to get the new keys, my desired unit was no longer available and I am paying $90 more per month for a different, pricier unit I didn’t want. Also high rent increases and cuts to advertised services & amenities. I won’t bore you with more depressing details. I just want people to see what the low to middle income state employees and teachers living in a normal Olympia area apartment complex are being made to pay, in addition to their monthly rent and typical move-in deposits.

  2. I’m nervous that this latest push to densify cities is pushing out small landlords and creating more corporate/Wall Street ownership, which is lawyered up to charge such fees, use rent setting algorithms, and other anti-trust/anti-tenant nonsense. Sure we can build more units but let’s not regulate and tax small landlords out of the market. They’re much more reasonable than corporate owners, but recent landlording laws and pending upzones are creating a squeeze.

    1. Agree in part, disagree in part. The reason for high rents is lack of housing, so the cure for high rents (and fees) is more housing. You have plenty of rentals and these fees go away. (If the tenant does not like the fees, they can move down the street.) Adding more and more regulation is more harmful to small landlords, who finally just give up and sell out. All these regulatory attempts to micromanage rentals is creating a space only the big national rental companies can compete in.

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