What the FTC's Warning Letters Mean for Property Managers Buying Software

On December 9, 2025, the Federal Trade Commission sent warning letters to 13 property management software providers nationwide. The message was direct: if your software prevents property managers from showing accurate pricing to renters, you're violating federal law.

The letters stated that software programs "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."

If you manage properties and use software to do it, this matters to you. Here's what happened, why the FTC cares, and what red flags to watch for when evaluating or renewing your property management software.

What the FTC Actually Said (And Why It Targeted Software)

The FTC's enforcement action focused on a specific problem: software that restricts property managers from displaying complete pricing information to prospective renters. According to the warning letters, these platforms "do not always display complete pricing information, including the total monthly rental price inclusive of all fees" and can "restrict the ability to aggregate or convey cost information to consumers on third-party listing sites."

The FTC warned that deceptive pricing conduct could result in federal court injunctions and civil penalties of up to $53,088 per violation.

This isn't theoretical. In September 2024, the FTC settled claims against Invitation Homes for $48 million in penalties for deceptive pricing and junk fees. In December 2025, Greystar, the nation's largest multifamily rental property manager, agreed to pay $23 million to settle allegations that it deceived consumers about rental prices.

The FTC's Rule on Unfair or Deceptive Fees took effect on May 12, 2025. While the rule specifically covers live-event tickets and short-term lodging, the FTC has made clear that it has authority under Section 5 to bring actions for deceptive pricing practices across industries. The FTC estimates this Rule will save consumers approximately 53 million hours annually that were previously spent deciphering hidden fees.

The broader context matters. In March 2026, the FTC sent warning letters to 97 auto dealership groups about deceptive pricing. In December 2025, the FTC reached a $60 million settlement with Instacart for allegedly deceptive advertising and subscription practices. The FTC alleged that subscription term length, payment amount, and cancellation terms were hidden in fine print that consumers weren't required to read and may not have seen without scrolling past the enrollment button.

The pattern is clear: the FTC is cracking down on companies that bury critical pricing information. Property management software is now in that crosshair.

Why Property Managers Are Especially Vulnerable

Property managers face unique pressures that make hidden software fees especially damaging.

Long-term contract lock-ins are common in property management software. You sign a multi-year agreement, then discover that essential features require upgrades or additional modules. By the time you realize the true cost, you're locked in.

Module-gating forces upgrades mid-contract. You start with a "basic" plan, then learn that compliance tools, advanced reporting, or resident portals require a "professional" or "enterprise" tier. The base price you budgeted no longer reflects what you actually pay.

Payment processing markups are often buried in fine print. According to industry research, payment processing fees ranging from 2-3% are common hidden costs in property management software pricing models. Some providers charge transaction fees for processing rent payments that add up quickly. When you're processing thousands of dollars in rent each month, these fees drain your margins.

Affordable housing operators face budget constraints that make surprise fees especially damaging. For small landlords managing 1-50 units, property management software costs can range from $50 to $150 per month, while mid-sized portfolios (51-200 units) may budget $150 to $500 monthly. These costs can strain affordable housing operators who work with tight budgets. When hidden fees appear, they force difficult choices about where to cut costs.

5 Red Flags to Watch When Evaluating Property Management Software

When you're evaluating software or reviewing your current contract, watch for these warning signs:

1. Per-module or per-feature pricing that isn't disclosed upfront

Plan tiers often differ by the features offered: basic plans include online rent collection and tenant screening, while higher tiers add accounting integrations, maintenance management, and other advanced features. Hidden costs include customization, implementation of unique company branding, and integration with existing software such as CRM, payment processing, and accounting software.

If the pricing page shows a low monthly rate but doesn't list which features are included, assume you'll pay more to access what you actually need.

2. Payment processing fees above 2.5%

Payment processing fees are where most property software companies make their real money. They advertise low monthly rates, then gouge you with transaction fees that drain your revenue with every rent payment. Ask for the exact ACH and credit card processing rates before signing. If the vendor won't provide specific numbers, that's your answer.

3. Implementation/onboarding fees not included in the base quote

While competitors charge hefty setup fees or require expensive consultants to get you started, transparent pricing includes implementation costs upfront. Setup fees can range from $100 to $1,000 or more. Data migration charges can add another $200 to $1,000. If implementation fees aren't mentioned in the initial quote, ask directly. Get it in writing.

4. Tiered plans that require upgrades to access compliance tools

Compliance isn't optional. If your software locks HUD reporting, TRACS integration, or Fair Housing documentation behind a premium tier, you're paying extra for tools you're legally required to use. Ask which compliance features are included in the base plan. If the answer is vague, assume they're not included.

5. Auto-renewal clauses with narrow cancellation windows

Auto-renewal clauses are standard, but watch for narrow cancellation windows that make it nearly impossible to leave. Some contracts require 90 or 120 days' notice before renewal. If you miss the window, you're locked in for another year.

Read the cancellation terms before signing. Mark the cancellation deadline on your calendar immediately.

What Transparent Pricing Actually Looks Like

Transparent pricing means you know exactly what you'll pay each month before you sign. No surprises. No hidden modules. No premium tiers that gate essential features.

All-inclusive pricing means every feature is included from day one. Resident portals, compliance tools, accounting, maintenance tracking, document management—everything you need to manage properties is available without upgrades or add-ons.

Flat per-unit pricing eliminates guesswork. You pay one predictable rate per unit, regardless of which features you use. If you manage 100 units, you multiply the per-unit rate by 100. If you grow to 150 units, you multiply by 150. No punitive pricing tiers that penalize growth.

The lowest payment processing fees in the industry keep more money in your account. ACH processing rates and credit card rates should be disclosed upfront, not buried in fine print. If your software vendor views your residents' payments as their profit center, you're losing money every month.

U.S.-based support should be included, not invoiced separately. When you call with a question about TRACS submissions or CAM reconciliation, you should talk to someone who's actually dealt with those issues. Support shouldn't cost extra.

ExactEstate's flat per-unit pricing model delivers exactly this: $3 per unit per month (or $300 flat for portfolios under 100 units). Everything included. No tiers. No hidden modules. No payment processing markups that drain your margins.

How to Audit Your Current Software Contract

If you're already under contract, you can still evaluate whether your current software is costing you more than it should.

Pull these documents from your current agreement:

Ask your current vendor these questions before renewal:

If the answers are vague or require "checking with the billing department," that's a red flag.

Consider switching if:

Most property managers wait until their contract expires to switch. You don't have to. Many software providers, including ExactEstate, can run in parallel with your current system until your old contract ends. You don't lose data, and you don't pay double.

The FTC's Message to Property Managers

The FTC's warning letters weren't just aimed at software vendors. They were a signal to property managers: the tools you use to run your business matter. If your software prevents you from showing accurate pricing to renters, it's creating compliance risk for you.

Software vendors can no longer hide behind vague pricing pages and premium tiers. Property managers can no longer ignore the true cost of their software. Transparent pricing protects you. It protects your budget. It protects your residents. It protects your business from compliance risk. If your current software doesn't offer it, it's time to ask why.

Frequently Asked Questions

What did the FTC warn about software pricing?

On December 9, 2025, the FTC sent warning letters to 13 property management software providers for limiting property managers' ability to accurately advertise total monthly rental prices by failing to include all mandatory fees in the price. The FTC warned that deceptive pricing conduct could result in federal court injunctions and civil penalties of up to $53,088 per violation.

How do I know if my property management software has hidden fees?

Review your contract and recent invoices for per-module pricing, payment processing fees above 2.5%, implementation or onboarding fees not disclosed upfront, tiered plans that require upgrades to access compliance tools, and auto-renewal clauses with narrow cancellation windows. If your total monthly cost has increased significantly since signing or the pricing page doesn't clearly list which features are included, your software likely has hidden fees.

Is tiered pricing illegal in property management software?

No, tiered pricing itself isn't illegal. However, the FTC requires that pricing be clear and conspicuous. If essential features like compliance tools are locked behind premium tiers without clear disclosure, or if the base price doesn't reflect what property managers actually pay to use the software effectively, that creates regulatory risk.

What are normal payment processing fees for property management software?

Payment processing fees typically range from 2-3% for property management software, though some providers charge more. ACH processing rates should be significantly lower than credit card rates. Transparent providers disclose exact processing rates upfront rather than burying them in fine print or contract amendments.

Can I switch property management software before my contract ends?

Yes. Many software providers, including ExactEstate, can run in parallel with your current system until your old contract expires. This allows you to migrate data and train staff without paying double or losing information. Review your cancellation terms to understand notice requirements and any data export fees.

What should transparent property management software pricing include?

Transparent pricing should include all features (resident portals, compliance tools, accounting, maintenance tracking, document management) with no premium tiers or add-ons required. You should know the exact per-unit or flat monthly cost, payment processing rates, implementation fees, support costs, and cancellation terms before signing.

Ready to see what transparent pricing actually looks like? See ExactEstate's pricing or book a demo to see how we handle property management without the pricing games.