October 27th 2024.
Franklin Ramirez was feeling frustrated and deceived. When he first moved to Denver over a year ago, he was promised a monthly rent of $2,355 for his two-bedroom, two-bathroom apartment in the trendy Civic Lofts building downtown. However, once he started living there, he was hit with additional monthly fees that he was not aware of.
One of these fees was nearly $25 for "valet trash" service, where someone collects garbage from outside his door and takes it to the dumpster. On top of that, he also had to pay almost $60 for waste-management employees to take the garbage to the dump. There was also a $20 boiler management fee and a $1 pest control fee. In addition, he had to pay close to $80 for a community electric bill and fluctuating charges for gas, sewer, and water. These fees seemed to cover not just his own unit, but also communal spaces in the building.
To make matters worse, there was a $6 service fee that he was told would cover all the other fees at the end of the month. This, combined with the $100 monthly parking fee he agreed to upfront, brought his total payment in October to a whopping $2,761 – a 17% increase from his base rent.
This is not an isolated incident – many other Colorado renters have also complained about similar fees. These so-called "junk fees" have become increasingly common in the rental housing market, causing even more strain on an already overburdened and limited housing supply. They are often hidden in lengthy lease agreements and can add up to significant amounts over time. Some of these fees have even been deemed illegal and deceptive by advocates and attorneys.
David Bennett, the community manager at Civic Lofts, claims that his team is transparent about any fees that residents may incur during their tenancy. He explains that the complex is simply passing on the charges they receive. "We're not trying to make a profit from these fees," he says.
However, this issue has caught the attention of lawmakers, tenants' advocates, and lawyers in Colorado. They have tightened laws and filed lawsuits against large property owners in an effort to use the Colorado Consumer Protection Act to crack down on these fees. Even the state's Attorney General, Phil Weiser, has taken notice and is urging tenants to come forward with their experiences.
Despite this, enforcement and oversight have not kept up with the practices of landlords. Some legislators are considering further changes to state laws to more closely regulate or even ban certain fees.
State Representative Javier Mabrey, a Denver Democrat, believes that these fees are deceptive and unfair. He wants to see a ban on these practices, stating that "landlords are advertising a fake price to get consumers interested, but it's not what they're actually going to pay at the end of the day."
Landlords, on the other hand, argue that these fees were mutually agreed upon when the tenants signed the lease. They claim that the fees are necessary to cover routine building costs and optional services that tenants use. However, advocates argue that tenants often already pay application or administrative fees before seeing the lease, making it difficult for them to back out.
Zach Neumann, executive director of the Community Economic Defense Project, believes that this practice is widespread among corporate landlords and limits tenants' options. He argues that these fees are often not openly disclosed and can be especially harmful for those on a fixed income or who cannot afford frequent price fluctuations.
Aaron Schultz, a tenant at One City Block Apartments, experienced this firsthand. Despite asking about fees during his initial tour of the complex, he was still hit with numerous surprise monthly fees when he went to sign his lease. This resulted in his monthly cost being much higher than the advertised rent of $1,650.
The largest property management company in the country, Greystar, did not respond to a request for comment on their fee practices. However, Drew Hamrick, general counsel and vice president of the Colorado Apartment Association, believes that landlords may be better off including some fees in the rental price to be more transparent.
In the end, these junk fees are causing frustration and financial strain for many Colorado renters. With more than a third of the state's residents being renters, and half of them already being cost-burdened, it's clear that something needs to be done to address this issue.
Franklin Ramirez was feeling completely deceived. When he first moved to Denver a year ago, he was promised a monthly rent of $2,355 for his two-bedroom, two-bathroom apartment in the Civic Lofts building downtown. However, he soon discovered that this was not the whole story.
Apart from the rent, he had to pay additional monthly fees. One of these was a $25 charge for "valet trash" service, where someone would collect the garbage from outside his door and take it to the dumpster. Then, there was an extra $60 for waste-management employees to transport the trash to the dump. On top of that, there was a $20 monthly fee for boiler management, a $1 fee for pest control, and close to $80 for a community electric bill, with additional charges for gas, sewer, and water. To make matters worse, these fees seemed to cover not just his own unit, but also the communal spaces in the building.
And if that wasn't enough, there was a $6 service fee that Ramirez was told was for a program that tallied up all the other fees at the end of the month. When he added in the $100 monthly parking fee he had agreed to upfront, his total payment for October came to a whopping $2,761 - a staggering 17% higher than his base rent.
These so-called "junk fees" are becoming increasingly common in Colorado's rental housing market, according to attorneys and advocates who spoke to The Denver Post. These fees, which are often hidden in lengthy lease agreements, are causing even more financial strain for tenants who are already struggling with high rental prices and limited housing availability. Some of these fees are not only deceptive, but also illegal.
David Bennett, the community manager at Civic Lofts, stated that his team is upfront about any additional costs that residents may have to pay during their tenancy. He explained that the complex is simply passing on the fees they are charged. "We're not trying to make a profit from these fees," he clarified.
Numerous renters have written to The Post to express their frustration with these additional charges. Some have complained about fees for pest control, common-area maintenance, parking, package delivery, and even property taxes. Former tenants of CBZ Management, the owner of some infamous properties in Aurora, have also reported being charged for security cameras that were either non-existent or not functioning.
This concerning trend has caught the attention of a group of Colorado lawmakers, tenants' advocates, and lawyers. They have taken action by tightening laws and filing lawsuits against large property owners, using the Colorado Consumer Protection Act to crack down on these fees. The office of Colorado's Attorney General, Phil Weiser, is also taking steps to address this issue and has urged more tenants to come forward with their experiences.
However, despite these efforts, attorneys and advocates argue that enforcement and oversight have not kept pace with the practices of landlords. Some legislators are considering further changes to state laws in order to more strictly regulate or even ban certain fees.
State Representative Javier Mabrey, a Democrat from Denver, believes that charging these "junk fees" is deceptive and unfair to tenants. He argues that landlords advertise a lower rent to attract potential renters, only to surprise them with additional charges later on. "I think we should ban these practices," he stated.
On the other hand, landlords argue that these fees are agreed upon by both parties when the tenant signs the lease. However, advocates counter that tenants have often already paid application or administrative fees before they see the lease, making it difficult for them to back out. Landlords also claim that these fees are necessary to cover routine building costs and optional services that tenants use. Drew Hamrick, the general counsel and a vice president of the Colorado Apartment Association, explained that certain fees, such as electricity and covered parking, cannot be included in the rent and must be charged separately.
However, he also acknowledged that landlords may benefit from incorporating some fees into the rental price, as it would be more transparent for tenants. He remains opposed to any attempt to ban these charges altogether, and believes that judges should not be involved in deciding whether a tenant has been charged too much.
Ramirez, the frustrated tenant at Civic Lofts, admitted that he did not realize he should have asked about fees or checked for them in his lease. "It's a bait-and-switch," he lamented. "They lure you in with a low rent, but then make up for it with these fees." He believes that there should be more transparency and accountability when it comes to fees, and even plans to contact his legislator about the issue.
The widespread practice of charging "junk fees" to Colorado renters is a cause for concern, but the exact scale of the problem is not clear. Zach Neumann, the executive director of the Community Economic Defense Project, believes that this is a problem mostly among corporate landlords, rather than smaller, locally-based providers. However, there is a lack of data on how much of the state's rental housing market is controlled by these large companies.
The National Consumer Law Center estimates that millions of renters across the country are affected by junk fees, and the White House's Council of Economic Advisers reported that application fees alone generate over $270 million in excess revenue every year. Attorneys and advocates also claim that collusion plays a role, with large landlords using form leases from trade organizations to ensure that their fee practices are shared and that tenants have limited options to avoid them.
Aaron Schultz, a renter at One City Block Apartments, stated that he specifically asked about fees before signing his lease, but was still surprised by the numerous addendums and hidden charges he encountered. He felt that the disclosure of these fees was not transparent, and believes that they should be included in the upfront rent instead.
In response to Schultz's complaint, a Greystar employee, who manages the property, acknowledged that the fees were standard but promised to do a better job of communicating them to potential renters. Schultz felt taken advantage of and believed that he had to be constantly vigilant to avoid being deceived. "It feels dishonest," he said.
Greystar, the largest property management company in the country, did not respond to The Post's request for comment on their fee practices. Hamrick, from the apartment association, agreed that last-minute disclosure of fees, if it happens at all, is problematic. He also reiterated that landlords would be better off incorporating some fees into the rent. However, Neumann argues that the current approach is opaque and particularly harmful for tenants on a fixed income or those who cannot afford sudden increases in their monthly expenses. He believes that it would be better for landlords to charge a higher upfront rent instead.
With over a third of Colorado residents being renters, and half of them being cost-burdened, it is clear that the issue of "junk fees" is a pressing concern. Tenants are being charged for services that should be covered by the landlord or included in the rent, and the lack of transparency and accountability in this practice is cause for alarm. While efforts have been made to address this issue, there is still a long way to go to protect renters from these deceptive and unfair fees.
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