The Federal Trade Commission sent warning letters to 13 property management software providers nationwide, cautioning them they may be violating federal law if they prevent rental property managers and owners from conveying accurate pricing information when marketing rental housing to consumers.
The letters warn that software providers may be depriving consumers of the ability to make informed purchasing decisions and negatively affecting market efficiency if they hinder the flow of accurate pricing information in rental listings. The FTC did not identify the specific companies that received the warning letters.
"The FTC is committed to rooting out anticompetitive, unfair, and deceptive acts or practices in the rental housing market," said Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection. "Companies need to compete on price and consumers need accurate and non-deceptive information to make the best-informed decisions possible."
The enforcement action comes one week after the FTC announced that Greystar, the nation's largest multi-family rental property manager, agreed to pay $23 million to the FTC and $1 million to the State of Colorado for allegedly deceiving consumers about rental prices. The Greystar settlement signals the agency's intensified focus on rental market transparency.
According to the warning letters, available information suggests that property management software providers are limiting the ability of rental property managers and owners to accurately advertise total monthly rental prices by failing to include all mandatory fees in the price. This practice may cause consumers harm by preventing potential renters from getting complete pricing information on property owners' and managers' websites and internet listing platforms.
The issue affects how rental properties are marketed across digital platforms. When software systems prevent the inclusion of mandatory fees such as parking charges, pet fees, or amenity costs in advertised rental prices, consumers cannot accurately compare properties or budget for their housing expenses. This creates an information asymmetry that disadvantages renters in their decision-making process.
The warning letters carry significant legal weight. Companies engaging in such conduct may be subject to legal action and federal district court injunctions, as well as civil penalties of up to $53,088 per violation under the rules and regulations the Commission enforces. This penalty structure means companies could face substantial financial consequences if they continue practices that hinder pricing transparency.
The FTC advised the companies to conduct a comprehensive review of their practices, including their website hosting platforms and software or coding that controls the flow of information to internet listing sites. This directive suggests the agency expects immediate action from software providers to modify their systems and ensure full pricing disclosure.
The rental housing market has increasingly relied on property management software to handle everything from tenant screening to rent collection and listing management. These platforms often integrate with popular rental websites and apps that consumers use to search for apartments and homes. When software limitations prevent property managers from displaying complete pricing information, the effect cascades across multiple listing platforms.
For consumers, the lack of transparent pricing makes it difficult to comparison shop effectively. Renters may visit properties or submit applications based on incomplete pricing information, only to discover additional mandatory fees during the leasing process. This practice can waste time and resources for both renters and property managers.
The FTC's action also reflects broader regulatory scrutiny of the rental housing market. Housing costs represent the largest expense for most American households, and pricing transparency in rental markets affects millions of consumers. The agency has previously taken action against various entities in the housing sector for deceptive practices.
Property management software providers now face pressure to modify their systems to allow for complete pricing disclosure. Companies in this sector may need to update their platforms to ensure property managers can include all mandatory fees in advertised rental prices across all listing channels.
The warning letters conclude with the FTC's commitment to continued market monitoring. "We are monitoring the marketplace for potentially deceptive or unfair acts or practices relating to the marketing and advertising of rental housing and will take additional action as warranted," the letters state.
This enforcement action represents part of a broader FTC initiative to address what it views as anticompetitive and deceptive practices in the rental housing market. The agency appears to be taking a comprehensive approach, targeting both property managers like Greystar and the software providers that enable potentially problematic practices.
For the rental housing industry, these warning letters serve as notice that the FTC will pursue enforcement actions against companies that impede pricing transparency. Software providers must now evaluate their systems and practices to ensure compliance with federal consumer protection laws while property managers should review their pricing disclosure practices across all marketing channels.