The Federal Trade Commission this month introduced a proposed rule targeting the elimination of “hidden fees,” with potential impacts on the rental housing industry.

The measure, announced Oct. 11 and applicable across various sectors, aims to enhance transparency and prevent businesses from hiding or adding misleading charges that inflate the cost of goods or services.

The new rule would require that all service charges, including those applied by third parties (for example, online rental housing platforms), be fully disclosed in the total price presented to consumers. This disclosure mandate would apply universally, affecting a spectrum of business types and industries.

The FTC’s move dovetails with the Biden administration’s broader campaign against hidden fees or what he has called “junk fees.” Earlier this year, the administration turned its attention to the rental housing market after addressing similar issues in other sectors, such as concert ticketing and airlines. It highlighted what it considers problematic practices, such as multiple application fees for tenants, unforeseen “convenience fees” for online rent payments, and service charges often assumed to be part of the rent.

For rental housing providers and associated online platforms, this rule would mandate a clear and conspicuous disclosure of the total price, which encompasses all charges a consumer must pay, excluding certain government charges. The rule stipulates that the total price must be more prominently displayed than any other pricing information, although it does not prescribe specific display standards.

In California, legislative efforts to address transparency surfaced this year with the introduction of SB 611 by Sen. Caroline Menjivar, D-Van Nuys. This bill proposed to enforce full disclosure of all fees and charges in rental property advertisements. It has since been reclassified as a two-year bill, delaying its progress until 2024. The California Apartment Association expressed concerns over this legislation, particularly its requirement that property owners disclose specifics about optional fees or variable fees based on a tenant’s usage or preferences.

In addition to “hidden fees,” the FTC’s proposed regulations take aim at what it considers misleading fee practices. Businesses, including rental housing providers, would be prohibited from misrepresenting the nature and purpose of any fee. This provision seeks to ensure that consumers are not misled about what a particular fee entails or its refundability.

The FTC acknowledges the regulatory role of states, affirming that its rule does not override state laws or regulations on unfair or deceptive fees, except in cases of conflict.