Tenants Are Being Charged Eviction Fees Even If They Aren’t Evicted | Invesloan.com

Tenants can face a multitude of extra fees — including for their own evictions if they fall behind on the rent. Some residents, however, are getting charged these fees even if an eviction case is not filed and a judge doesn’t sign off.

And they’re taking their big corporate landlords to court over it.

In September 2023, Karen Ransome of Jacksonville, Florida, was behind on her rent and facing possible eviction. She had already accrued $370 in fees, including late charges, when the property management giant Progress Residential added two new charges the day before Thanksgiving.

One was a $200 “eviction admin fee;” the other was an $827 “attorney filing fee,” a court filing shows. Afraid she was about to lose her home, Ransome came up with the money and sent a check for the full balance on her account — including the eviction-related fees — within days, the court documents say.

A few days later, she said she received an email from Progress that said: “Due to your prompt payment, the eviction proceedings have been officially dismissed.”

In reality, though, there was nothing to dismiss. Progress had not filed an eviction case against Ransome, and no judge approved the $1,027 in eviction-related fees.

Last year, Ransome sued Progress over the attorneys’ fees, alleging the landlord violated the state’s consumer collection practices act.

In March, Ransome’s lawyers withdrew the suit and consolidated it with one filed by a Progress tenant in a suburb of Orlando. Progress lawyers argued in a court filing that the fees were permitted under the tenants’ leases and that the company was entitled to them because the tenants fell behind on rent, breaching the contract. Tiffany Broberg, a senior vice president at Progress, said the company would not comment on pending litigation.

“We are invested in the success of our residents. In circumstances in which a resident is unable to pay rent, eviction is a last resort,” Broberg said in a statement.

A nationwide issue

A survey of tenant advocates conducted by the National Consumer Law Center tallied 10 states — California, Colorado, Georgia, Maryland, New Mexico, New York, Ohio, Texas, South Carolina, and Washington — where landlords reportedly charged eviction-related costs immediately upon starting the eviction process or when merely threatening to file a case.

“It is not that uncommon,” Ariel Nelson, an attorney at NCLC, told Business Insider.

As BI has reported, big residential landlords have found more and more ways to charge tenants fees on top of rent — even for paying rent with a credit card. Eviction-related fees are part of that trend.

In court filings, landlords say lease agreements signed by tenants authorize fees for their legal costs if renters fall behind on rent and that there are real costs associated with preparing an eviction case.

Gov. Kathy Hochul in 2021 barred landlords in New York from charging such fees without a court order, describing them as “increasingly expensive and unwarranted.”

Some leases mention eviction-related fees, but they aren’t always spelled out clearly. And if the case doesn’t make it before a judge, the billing may be opaque; a tenant might not know if what they are being charged represents the actual cost to the landlord. A newer version of a 2024 Progress lease reviewed by BI says tenants agree that certain fees are “a reasonable pre-estimate of the probable loss” to the landlord.

Tenants take the landlords to court

There’s no way to know how many tenants are paying such fees without question, but some are pushing back. A class-action lawsuit filed in a Baltimore city court in 2017 alleged that Westminster Management, which is owned by Kushner Companies, hit residents with “agent fees” and legal costs before eviction cases were resolved — or even filed.

Westminster argued that it was entitled to treat and recover legal fees as rent if the parties freely agreed to them. The case ended up before the state Supreme Court, which issued an opinion last year that landlords cannot recover costs other than rent and some late fees in an eviction proceeding without a judge’s order. It sent the tenants’ suit back to the city court, where it’s pending.

Jane Santoni, a lawyer who represented one of the tenants, said the decision was a “matter of fundamental fairness.”

“If the court does not award judgment against the tenant, including those costs, landlords are not entitled to collect,” Santoni said. “They can put whatever they want in their lease, it doesn’t make it legal.”

A Kushner Companies spokesperson said Westminster won’t comment on ongoing litigation but added the company “continues to abide by the law, including as to the definition of rent, as interpreted and clarified for the first time in the Maryland Supreme Court’s 2024 decision.”

Two tenants of a Boston apartment building filed a class-action federal lawsuit against the rental giant Greystar in 2023, alleging it regularly charges tenants legal fees without a judge’s order, and keeps the money even if the landlord pulls the case.

“Tenants pay these fees upon belief that if they do not, they will be evicted and forced to leave their homes,” the suit says. “These fees have not been assessed by any court, and no judgment has been rendered prior to their assessment.”

In its response, Greystar said the fees did not violate Massachusetts law and that the tenants’ lease made clear it would be on the hook for them. In March, a judge dismissed some counts but allowed others to proceed.

And in a different case, a group of tenants in Virginia sued in federal court, arguing that attorneys’ costs passed on by their landlords before an eviction case was filed were illegitimate under federal debt collection laws.

Brenda Castañeda, the attorney who represented the tenants, said the fees created an impossible situation.

“They’d be behind, so they’d have more than one case filing at once, and with it, you’d have another set of fees,” Castaneda said.

A federal judge ruled the law firm would be subject to debt collection laws banning misrepresentation of debt owed and noted the “sheer number” of evictions the landlords’ law firm facilitated. The parties settled in 2023.

While cases over eviction fees can span years, others are resolved much more quickly.

In Indianapolis, Jennifer Schaefer fell behind on her rent last fall because of a foot injury, she said. Her landlord, Progress Residential, went to court to evict her and charged her more than $600 in related fees — over a third of her monthly rent — some before the case was filed and some after.

Schaefer did not have an attorney when she went to court and said she never talked to a judge. The landlord’s lawyer offered her a deal: If she paid the back rent and the fees, she could stay.

Schaefer wanted to keep her home and agreed. Progress — which declined to comment on specifics about Schaefer’s case “out of respect for our residents’ privacy” — dismissed the eviction proceeding, court records show. A judge did not award legal costs to Progress in connection with the case.

To come up with the money, Schaefer said, she started making DoorDash deliveries around December and withdrew all of the money she contributed towards her retirement over the past year.

“Your Christmas present may be the fact just that we still have the same house,” Schaefer said she told her sons. “Your Christmas present is me paying the rent.”

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