WASHINGTON – A new report from the National Consumer Law Center has been released that seeks to delve into the “dizzying array of junk fees” renters can face when they try to find and keep rental housing.
Those fees, the NCLC said, can present barriers to affordability and jeopardize access to future housing and financial stability when they contribute to rental debts and blemishes on renters’ credit reports.
To learn more about the junk fees charged to renters and applicants, NCLC said it surveyed legal services and nonprofit attorneys between November and December 2022 about the types of fees that they have seen. NCLC received 95 responses from 26 states and Washington.
The Findings
Among the findings, according to the organization:
- Almost all survey respondents (89%) reported that landlords impose rental application fees.
- Nearly as many (87%) stated that landlords charge excessive late fees.
- Well over half of respondents observed utility-related fees (73%), processing or administrative fees (68%), convenience fees (60%), insurance fees (59%), and notice fees (56%
The NCLC said the report identifies more than a dozen fees seen in rental housing, including a “January fee”–a fee two Minnesota advocates reported seeing charged in January “for seemingly no reason.”
Not Enough Room
“Nearly half of all renter households in the United States—some 19 million households—spend more than a third of their income on housing,” Kuehnhoff added. “There simply isn’t room in their budgets for junk fees.”
The NCLC said in issuing its report that when excessive junk fees contribute to missed rent payments, they can create long-term barriers to housing–barriers that disproportionately affect renters of color.
“Nine out of 10 landlords run credit checks on all potential tenants – often automatically rejecting applicants who are alleged to owe money to former landlords and who have lower credit scores, and 63% of individuals with unpaid rent are people of color,” the organization said.
Recommendations to FTC
To help ensure renters’ future ability to secure safe and affordable housing by keeping unfair debt collection items off of their credit reports, the report recommends that the Federal Trade Commission and state legislatures take action.
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