What are junk fees? Hidden costs burden tenants in rental agreements

Marley Malenfant , Austin American-Statesman

How much are you paying in rent each month? In Texas, most tenants are paying more, not only for the place they live but hidden fees for appliances that people may not use or need.

These are known as junk fees. Here’s what you need to know.

What are junk fees?

Some landlords try to pad their pockets with unnecessary charges to increase their return. People could be paying for things they were not aware of or asked for when they moved in. For example, renters could be paying up to $20 a month on valet trash fees and another $8 on pest control when they might not even need the service.

Here’s a list of the most common recurring junk fees tenants pay for, according to The Housing Policy Clinic at the University of Texas. 

  • Valet trash fees — Valet trash fees have become very common in the Texas apartment industry and are typically charged to all tenants at a property, regardless of whether they choose to access the valet trash service.

  • Pest control fees — Pest control fees are an add-on fee charged to all tenants regardless of how often a unit is treated for pests.

  • Facility fees — Add-on fees cover the usage of core facilities at the complex that have historically been covered by rent, such as access to the pool and laundry room.

  • Admin fees — Landlords charge these fees for unspecified management tasks.

What are non-recurring junk fees?

Here are some examples of non-recurring junk fees that tenants pay when they’re closing on a new apartment.

  • Application fee — These widespread one-time fees, which can total hundreds of dollars, are charged to applicants during the application process and at move-in.

  • Notice fees — Notice fees include charges for posting notices at the property or sending notices to individual tenants, such as late payment notices.

  • High-risk fee — Landlords charge these fees to tenants who lack a rental history, have a low credit score, or are otherwise deemed “high-risk” by a landlord.

  • Community violation fees — These fees consist of excessive charges for tenant violations of the community rules— rules tenants may not even be aware exist.

Policies to fight tenant junk fees

The Housing Policy Clinic’s report mentioned possible solutions to curb the junk fee problem.

This includes efforts from city and statewide policymakers to require disclosure and transparency of junk fees to tenants before they sign a lease.

Last year, the Federal Trade Commission proposed a rule that would impose significant per-violation penalties for improper disclosure of junk fees.

Texas could also pass laws to prevent junk fees after Attorney General Ken Paxton took action to curb the use of these fees for hotel fees in May 2023. According to a report from KXAN, a spokesperson for Austin's Housing Department said there is room for improvement to improve tenants' lives.

"In the coming months, staff will again work with the development community and advocates to identify areas for improvement," a Housing Department spokesperson said. "The items discussed in this report will be part of that conversation. We look forward to a more transparent process and equitable outcome for all parties.”

Here are examples from The Housing Policy Clinic’s report on what lawmakers could do to prevent junk fees.

  • Ban certain types of fees — Policymakers can prohibit specific types of add-on fees, such as all or a subset of fees for mandatory services and amenities.

  • Restrict fee amounts — Policymakers can restrict the amounts landlords charge for certain types of services or lease violations to protect against excessive and punitive charges.

  • Require disclosure of fees up front — Policymakers can increase transparency in the rental housing market by requiring landlords to inform applicants of all mandatory recurring fees when advertising rental prices.

  • Prohibit fees in the middle of a lease — Policymakers could bar landlords from tacking on new fees or increasing the rent in the middle of a tenant’s lease.

  • Prohibit evictions for unpaid fees — Tenants currently face eviction if they contest a fee, with tremendous unjust consequences, including bans from renting other housing.

This article originally appeared on Austin American-Statesman: What are junk fees? Hidden costs burden tenants in rental leases

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