The nation's largest apartment manager is in the spotlight as legislators and tenants across the United States criticize what they say are "junk fees" used by landlords to extract added revenue from renters for services such as controlling rodents or collecting trash.

Greystar, a global real estate firm with a more than $74 billion national multifamily property portfolio, was sued for charging tenants fees along with their monthly rent payments that renters say are hidden, a practice that over the past year has drawn criticism from the White House and federal housing officials.

The proposed class-action lawsuit, filed in Denver District Court on behalf of a former Greystar tenant, claims the Charleston, South Carolina-based real estate giant charges unnecessary fees for services such as valet garbage removal that it said many tenants are unaware of until after signing traditional lease agreements.

The fees “operate as a hidden tax” on tenants, and “late disclosure of junk fees is particularly problematic in apartment rental contracts, where tenants may not learn of the fees, or see a copy of their lease, until shortly before move-in, after they have given notice to a prior landlord or invested significant moving expenses,” according to the lawsuit.

Two nonprofit law firms, Justice for the People Legal Center and Towards Justice, are representing the former tenant, who the suit said lived in a Greystar-managed property until April 2023 when the firm is said to have doubled the monthly rental rate upon the lease renewal.

“Greystar sent her a lease renewal offer that only disclosed the headline rent," Jason Legg, lead attorney from Justice for the People Legal Center, said in a statement to CoStar News. He added that most tenants are not aware of the "junk fees" until after they move in and it is too late to back out of their leases since they've likely already paid nonrefundable application fees, administrative fees, security deposits, pet deposits and at least the first month’s rent.

Greystar, owner of upward of 45,000 apartment units across Colorado, did not respond to CoStar News' phone and email requests to comment.

The National Multifamily Housing Council trade group also did not respond to requests to comment, but it has publicly pushed back against the characterization of junk fees. Instead, the association has argued that many of the service charges are legitimate and comply with both state and local laws.

The lawsuit joins similar complaints around the country and across industries.

The White House and Federal Trade Commission teamed up late last year in an effort to crack down on charges they claim are hidden, surprise fees that companies slip onto customer bills. Those can include anything from bank overdraft fees to the resort and amenity fees hotels charge for services such as gym access or Wi-Fi.

The Colorado lawsuit against Greystar is one of the first of its kind following a state law that took effect in 2022 that bans landlords from billing tenants for undisclosed charges and mandates that they refund any illegally imposed fees.

That law predates efforts undertaken by the White House and the U.S. Department of Housing and Urban Development last year that called on the multifamily industry to increase the transparency of any housing-related charges that can add hundreds of dollars for services such as application fees, maintenance or service expenses.

"Every renter should know the true costs of finding and staying in their home, and any fees charged to renters should be fair and transparent," HUD Secretary Marcia L. Fudge wrote in an earlier letter addressing concerns about the fees across the multifamily industry. "However, many renters today face fees that are hidden, duplicative or unnecessary as part of the housing search and leasing process. These fees limit options for renters and strain household budgets, particularly for renters with low and modest incomes who already face high rental cost burdens."

Along with Colorado, states such as Virginia, Washington and Vermont have implemented laws capping some tenant fees or eliminating them altogether.

Earlier this year, the Colorado Attorney General’s Office reached a $1 million settlement with property management company Front Range over the firm's practice of what it said was illegally billing tenants for routine apartment services, unnecessary repairs, unrelated damages or other fees not disclosed in lease agreements.

The Boulder, Colorado-based firm manages about 5,000 rental units — many of them catering to off-campus and student housing tenants — across the state.

“Too often, landlords and property management companies nickel and dime tenants by deceiving them into paying for things like normal wear and tear or damage from previous tenants, or by charging fees not reflected in leases,” Colorado Attorney General Phil Weiser said in a recent statement. “For consumers who are able to act effectively as their own lawyers, they may complain and get their money back; most consumers, however, are unable to do so and are mistreated in violation of the law.”

That settlement marked the first time the Department of Law acted upon the state's 2022 housing law. Weiser's office declined to comment on the Greystar lawsuit.