Single-family landlord Invitation Homes misled consumers over cost of a home
Invitation Homes Settles Allegations for $48 Million
Invitation Homes, the largest single-family landlord in the United States, has agreed to a $48 million settlement to resolve several allegations, including the illegal imposition of undisclosed fees, improper withholding of tenant security deposits, and unfair eviction practices. The Federal Trade Commission (FTC) announced the settlement on Tuesday.
The FTC's primary allegation was that Invitation Homes misled tenants about the total cost of renting its properties. The company, which owns or manages over 100,000 homes nationwide, including more than 11,000 in California, failed to disclose mandatory fees for services such as smart home technology and utility management in its advertised rental rates. These fees could increase the annual rent by more than $1,700 and were often only revealed when tenants were about to sign their lease. By this point, tenants had typically already paid nonrefundable application fees of up to $55 and possibly $500 to reserve a specific home, which they would only get back if they signed the lease. In some cases, tenants were not informed of these fees until after they had signed the lease and moved in.
In addition to the undisclosed fees, the FTC accused Invitation Homes of renting out properties that were frequently in disrepair and systematically withholding security deposits for damages that were not the tenants' responsibility. The company also engaged in unfair eviction practices, particularly during the COVID-19 pandemic. The FTC alleged that Invitation Homes told struggling tenants that their only options were to pay, move out, or face eviction, without informing them of federal eviction protections available at the time.
FTC Chair Lina M. Khan emphasized the agency's commitment to protecting renters from unlawful business practices, stating, "No American should pay more for rent or be kicked out of their home because of illegal tactics by corporate landlords."
Invitation Homes, in a news release, denied any wrongdoing and described its disclosures and practices as "industry leading." The company stated that the settlement concludes a three-year FTC investigation and allows it to move forward with efforts to better serve its customers and enhance its practices.
Invitation Homes has faced multiple settlements this year. In July, the company agreed to pay nearly $20 million to resolve allegations of unpermitted renovations across its California portfolio. In January, it settled for several million dollars over allegations of violating the state's rent cap law. The latest settlement, which still requires judicial approval, will provide refunds to consumers and mandate that Invitation Homes include all mandatory monthly fees in its advertised rent.
Additional recent settlements in the housing sector include the AIDS Healthcare Foundation's resolution of a class-action tenant case over poor living conditions and a nearly $40 million settlement by Los Angeles for allegedly misusing federal housing grants.
