Baltimore sues RentCafe and property manager over alleged hidden fees

Baltimore is suing RentCafe, a property management platform, and one of the city's largest property managers over alleged hidden, or "junk," fees.

The lawsuit names RentCafe and its partner, Yardi Systems, as defendants, along with the Pennrose Management Company, which owns and manages hundreds of low-income rental units in the city.

Mayor Brandon Scott and the City Council announced the legal action Monday, accusing RentCafe and Pennrose of using "predatory practices to squeeze every last dollar out of economically vulnerable renters."

"The complaint alleges that RentCafe steers tenants toward fee-generating payment options by obscuring the fees associated with each payment method behind multiple clicks, embedding fee information across several web pages in fine print, and failing to disclose the fee associated with a selected payment method until the last step of the payment flow," the announcement said. 

The announcement went on to say tenants are forced to pay these fees in order to pay their rent, and they do not receive any additional service in exchange. If tenants do not pay the fees, they risk being charged late fees or even evicted.

"These illegal junk fees effectively raise the rent for thousands of Baltimore residents," Scott said in a statement. "This is about holding these businesses accountable for their deceptive practices and protecting Baltimoreans' hard-earned money."

Hidden fees, also known as "service fees," "administrative fees," or "processing fees," are illegal under Baltimore's Consumer Protection Ordinance. 

"Renters should not have to navigate a maze of web pages and fine print to understand what they are being charged," City Solicitor Ebony M. Thompson said in a statement. "When companies obscure the true cost of rent, we will use the City's consumer protection laws to hold them accountable."

"Hard-earned money paid in fees to RentCafe means less money for groceries, transportation, or medical bills," said Tara K. Ramchandani, Co-Managing Partner at Relman Colfax. "We are proud to partner with the City of Baltimore to protect these consumers."