The notice of proposed rulemaking is just the first step in the process. The public comment period closed on April 13, 2026.

Attorneys general from 26 states and the District of Columbia have joined forces to urge the Federal Trade Commission (FTC) to adopt a federal rule prohibiting landlords from imposing hidden fees and charges on prospective renters. The coalition of states—led by Colorado, New Jersey, Pennsylvania and Tennessee— sent a letter to the FTC on April 13, 2026, calling for decisive action against deceptive rental fee practices that, the states allege, harm consumers nationwide.

Key Takeaways

• The FTC and state attorneys general from both parties are showing a willingness to combat unfair and deceptive practices in the rental housing market.
•  Multifamily developers, owners, operators and investors can anticipate increasing scrutiny of their pricing policies and practices at the state and federal level.

Background

The letter from the attorneys general was in response to the FTC’s March 13, 2026, notice of proposed rulemaking, which sought public comment on whether a rule to prevent unfair or deceptive practices in connection with rental housing fees and charges is needed. As examples of such practices, the FTC notice highlighted “advertising rent that fails to include all mandatory fees and charges, imposing fees and charges without express informed consent, and misleading consumers about the nature and purpose of fees or charges.”

The FTC stated in the notice that a rule addressing unfair or deceptive rental housing fee practices could serve as a deterrent against these practices because such a rule would allow for civil penalties to be sought against violators.

The notice of proposed rulemaking is just the first step in the process. The public comment period closed on April 13, 2026.

The Attorneys General Letter

In their letter, the state attorneys general discussed rental fee practices that they claim are prevalent in their states, such as “bait-and-switch” tactics when renters are applying for or entering into residential housing leases—where landlords or property managers bait consumers with advertisements and statements promising low monthly rents and fail to disclose mandatory fees and charges that make the true monthly rent much higher. Often, they allege, these mandatory fees and charges are not disclosed until late in the application process or even after the renter has moved in. They argue that these practices not only harm renters—they also undermine competition in the rental housing marketplace by making it harder for landlords and property managers to understand and compete on price and services, “inhibiting competition and giving dishonest businesses an advantage over honest businesses.”

The attorneys general point out that some states have reacted to such practices by enacting legislation such as capping tenant screening fees and late fees, requiring disclosure of all mandatory and optional fees before requiring tenant screening information, and requiring landlords to provide tenants with a method to pay rent that does not involve additional processing fees.

The letter also highlighted various enforcement actions that states have brought in recent years alleging unfair and deceptive rental practices such as collecting excessive late fees, charging illegal or undisclosed application and screening fees, improperly and arbitrarily deducting “administrative fees” from security deposits, imposing a “moveout coordination fee” without disclosing the fee in the lease, and failing to clearly and conspicuously disclose fees prior to the submission of an application.

The letter stated that the states’ experience has shown “both the pervasiveness of the problem and the difficulty of addressing it through state law alone, particularly where large corporate landlords and property managers operate across multiple jurisdictions.” The attorneys general urged the FTC to proceed with a proposed rulemaking to address these practices. They also stated that they support rulemaking that establishes “clear, consistent minimum standards” regarding such practices, but that preserves the authority of each state to protect its consumers consistent with the state’s needs.

In addition to the four lead states and the District of Columbia, the other states signing the letter were Alaska, Arizona, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington and Wisconsin.

Conclusion

The rulemaking process takes time, so any FTC rule addressing rental fee housing practices is likely months if not years away. But the FTC’s notice of proposed rulemaking, and the state attorneys general letter representing more than half the states in the country, show that rental fee housing practices are getting a lot of attention from federal and state enforcers. Multifamily developers, owners, operators and investors—particularly those operating in the states that signed the April 13 letter—should consult with experienced counsel to review their fee policies and practices to ensure they are consistent with federal and state consumer protection laws.

For More Information

If you have any questions about this Alert, please contact Christopher H. Casey, Paul P. Josephson, Daniel R. Walworth, George J. Kroculick, any of the attorneys in our State Attorneys General Group, any of the attorneys in our Real Estate Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.