Willow and Hearth

Two federal class-action lawsuits filed this year accuse major rent-payment platforms of charging tenants monthly “convenience fees” that were never disclosed in their leases, and regulators are now asking the same question in a formal rulemaking. A bipartisan coalition of more than two dozen state attorneys general submitted comments in April backing an FTC proposal that would force landlords and payment platforms to disclose these charges upfront, according to a summary of the filing.

Key Points

• A lawsuit filed against CoStar Realty Information, which operates Apartments.com, alleges the company charges a transaction fee ($6.60 in the named plaintiff’s case) that only appears at the final payment confirmation screen, according to court filings reported by ClassAction.org.
• A separate suit against property management software company AppFolio alleges tenants were charged fees ranging from $2.49 to as much as $611.11 in one case, with the fee structured as a “negative option” tenants had to actively avoid rather than opt into, per court documents summarized by Top Class Actions.
• The state AG coalition’s letter to the FTC specifically flags “administrative” and “convenience” fees, alongside application fees and mandatory add-on charges, as targets for a disclosure requirement.
• Consumer advocates, including the National Consumer Law Center, have pressed both the FTC and the Consumer Financial Protection Bureau on rental fee transparency since at least 2022, arguing the charges function as pure profit centers with no service attached.

The AppFolio complaint, filed by plaintiff Ian Comfort in California and now pending in the U.S. District Court for the Northern District of California, argues the fee “is not permitted by their residential leases” and invokes California’s Honest Pricing Law, which requires the true total price of a good or service to be disclosed upfront. The CoStar suit, filed under Washington’s Consumer Protection Act, makes a similar argument: tenants aren’t told a fee-free payment option exists until after they’ve already been charged.

Neither company has been found liable, and both cases are in early stages. But the timing lines up with a broader regulatory push. The FTC’s proposed junk-fee rule for rental housing would require the total cost of rent, including mandatory fees, to be disclosed in advertising and at the point of payment, closing the same gap the lawsuits describe. If finalized, it would put rent-payment platforms in the same regulatory conversation as event ticketing and hotel booking sites, both of which faced FTC junk-fee scrutiny in prior rulemakings.

For now, tenants paying rent through an online portal have no guaranteed way to know whether a “convenience fee” is optional until they’ve already reached checkout, the exact gap both the lawsuits and the regulators are now trying to close from opposite directions.