Massachusetts is the latest state to enforce “junk fee” regulations. For landlords here, both large and small, this has significant implications. It means that the additional charges landlords and management companies tag on above the base rent, such as the cost of parking, amenities, trash pickup, pest control, and extra utilities, must be fully disclosed upfront as the overall cost before they ask a tenant to commit.
“We’ve all been there: booked a hotel room, purchased concert tickets, or paid for a service that was advertised at one price and then charged for one exponentially higher—all because of hidden junk fees,” Massachusetts Attorney General Andrea Joy Campbell said in a statement. “These regulations seek to keep more money in residents’ pockets by combating these unnecessary fees and ensuring consumers understand exactly how much and what they are paying for.”
According to the new law, which falls under the Massachusetts Consumer Protection Law, landlords must explain why they are adding additional fees above the rental price, and tenants have the right to know whether any of the charges are optional.
The Greater Boston Real Estate Board has suggested a straightforward solution for landlords: bundling all additional fees into the overall rental price, thereby eliminating the need for any further disclosures.
A National Push Against Junk Fees
The housing crisis and the high cost of living have put rental expenses in the national spotlight, with several states seeking complete transparency. These include:
- Colorado: “Unexpected, undisclosed fees cost consumers hundreds of dollars every month,” Democratic Sen. Lisa Cutter, one of the sponsors of a bill to address junk fees, said in a statement.
- Minnesota: In May, Governor Tim Walz signed a bill establishing the failure to disclose mandatory fees in any transaction as a deceptive trade practice.
- Maine: Maine’s law extends to mobile home parks, where landlords must now supply a 45-to-75-day notice for rent increases of 10% or more, and a 75-day notice for increases exceeding 10%. It also prohibits rental application fees and move-out fees.
- Connecticut: Connecticut’s new rule covers junk fees for tenants, in addition to numerous other safeguards for people purchasing goods and services.
Other states imposing some form of legislation regarding junk fees include Georgia, Illinois, Minnesota, Virginia, Washington, and Rhode Island. Several cities have also introduced their own versions of the law.
The Bigger Picture
The clampdown on junk fees echoes a broader goal of reducing high rent prices, a move orchestrated by the Biden administration. In July 2023, the Biden White House announced an initiative to combat rental junk fees and received commitments from rental housing platforms, including Zillow, Apartments.com, and AffordableHousing.com, to display all-inclusive rental costs, including application fees and deposits, as part of their listings.
This coincided with the Department of Justice’s lawsuit against algorithmic rental management software company RealPage, which it accused of unlawfully conspiring to increase rental prices with its client base. During the Biden administration, HUD also released research and encouraged state-level reforms, such as fee caps and one-time application models, to promote rent clarity and support fairer rental markets.
How the New Laws Could Affect Landlords
The new rental “junk fee” laws are unquestionably aimed at larger, corporate landlords such as REITs, who routinely include ancillary fees to increase revenue, which in turn boosts their stock price. Business Insider reports that since the 1990s, major REITs such as Equity Residential, Camden Trust, Avalon Bay, and Invitation Homes have separated services like pest control and waste management that were previously included in the overall rent.
Small “mom-and-pop” landlords, who own three to 10 rental properties, make up the majority of U.S. residential property owners. Generally, they do not add on junk fees to the same extent as institutional investors and are more open to negotiation from tenants.
“Owner-managed properties are easier to negotiate,” John Kilpatrick, managing director of Greenfield Advisors in Seattle, told U.S. News & World Report. “If you’re trying to rent from a property manager or a large REIT, you’re probably out of luck.”
Many mom-and-pop landlords also have “off-lease” arrangements with their tenants, such as grass cutting, snow removal, and garbage disposal, for an agreed-upon rent reduction. From now on, officially including these agreements in a lease agreement is a good idea as oversight increases.
A Change of Administration, a Change of Heart
The Trump administration’s “Big Beautiful Bill” has chosen to limit the time period tenants can receive Section 8 vouchers to two years.
Corporate landlords are the winners of the new legislation. It remains to be seen whether the government will also choose to help landlords increase revenue by blocking anti-junk fee laws.
What Landlords Should Do to Comply With Junk Fee Laws
If a landlord fears they might face an investigation over additional fee charges, there are some concrete steps they can take:
- Audit your fees: List all charges, including application costs, admin, and services, and determine which are mandatory or optional. Provide this upfront to tenants, and keep a record.
- Update advertising and leases: Ensure the total cost of rent is clearly displayed upfront in all listings. Include an itemized fee breakdown, with opt-out instructions for optional charges.
- Improve cancellation and renewal transparency: Make opt-out cancellation straightforward, clarifying timing for auto-renewal services.
- Monitor developments in your local state/locality: Don’t be caught unaware by new legislation. Stay informed by connecting with landlord associations or consulting with legal advisors.
Final Thoughts
Transparency is the key. If all fees are clearly outlined in writing, there is no cause for complaint. Alternatively, including fees within the overall rent and clearly stating what is included in the rent should be acceptable to everyone as well.
While blindsiding tenants with additional fees they were not aware of is never a good look for landlords, property owners are often portrayed as the bad guys, when it’s increased taxes, insurance, and maintenance, as well as municipalities’ code compliance, that make it difficult for many landlords to make a living.
There is no easy solution. Landlords don’t have an obligation to provide housing to people who cannot afford it, and tenants are not obligated to rent from them.
It boils down to supply and demand. More housing supply would create more options for everyone.
