A new law requires landlords to be upfront about charges and limits certain tenant fees.

Christie Thomas of Pacific Grove says she was “retired and just sitting around” when a friend who is running a business and has three children needed help finding a new place to live. Thomas offered to help look. She did an internet search for rentals in Marina, where her friend works, and was flabbergasted when she saw the fees one property management company was charging, including a $308 “lease admin fee” due at signing.

“I was just blown away,” she says.

The other fees included $59 per adult for an application fee. There was also the first month’s rent of $4,400, due at signing, and a $5,000 security deposit. Tenants are also required to carry renter’s insurance, costing about $250 a year.

“You’re close to 10 grand to move. What worker bee in Monterey County can do that?”

“You’re close to 10 grand to move into something,” says Thomas. “What worker bee in Monterey County can do that?”

The list of fees was included in the March advertisement for the rental. For those landlords or property managers who have not included a list of fees in their ads, SB 611 requires that consumers are told up-front about all charges included in the rental. It also restricts landlords from charging certain fees.

“The bulk of SB 611 is kind of banning what we consider junk fees,” says Jonathan Torres, housing programs coordinator for ECHO Fair Housing.

Those fees include charges for notices sent by landlords to tenants, like a notice to pay rent or leave the rental, or for a lease violation or about an eviction. Torres says some landlords and property managers would use the fees for what he called a “hostage situation,” threatening a tenant with eviction if they don’t pay the fees.

Torres says landlords would charge such fees because they had to pay an attorney to help prepare notices. The new law “is telling them that’s your issue,” he says. “The tenant is not going to pay those fees.”

Thomas questions whether an “admin lease fee” charged by a property management company, in her case Monterey Bay Property Management, is legal, especially in the case of the $308 for the rental she was looking at. Torres says it’s hard to say, not knowing exactly what the fee is for. “This is a business and property management companies are going to try to offset as many costs as possible,” he says.

Torres advises renters to ask what administration fees specifically cover before paying them: “If it’s $100, that’s a red flag,” he says, suggesting that figure is too high.

Jan Leasure, managing broker for Monterey Bay Property Management, says the fees usually include things like drafting the lease agreement, preparation of property disclosures, tenant onboarding materials and several other tasks.

“The lease admin fee is similar to the document prep fee charged to the buyer when buying a house,” Leasure says by email. She adds the fee hovers around $300 and covers 10 hours of work, “so you can see that the hourly rate is pretty low by today’s standards.”