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Invitation Homes, the largest owner of U.S. single-family rental homes, has agreed to pay $48 million to consumers and change some of its practices, according to a proposed settlement with the Federal Trade Commission (FTC) that was announced Tuesday.
According to the FTC, Invitation Homes advertised monthly rent prices without including mandatory “junk fees.” It also allowed renters to move into homes in “significant disrepair,” “systematically withheld renters’ security deposits” when they moved out, and used unfair eviction practices.
The action against Invitation Homes is the first resulting from an FTC workforce formed earlier this year. The group was tasked with examining unfair, deceptive and anti-competitive practices in the rental housing space.
“No American should pay more for rent or be kicked out of their home because of illegal tactics by corporate landlords. The FTC will continue to use all our tools to protect renters from unlawful business practices,” FTCC Chair Lina M. Khan said in a statement.
In a statement, Invitation Homes said it’s paying monetary relief but no civil penalties, and the agreement contains no admission of wrongdoing.
“Invitation Homes believes that its disclosures and practices are industry leading, both among its professional peers as well as the millions of smaller owners of single-family homes for lease,” the company said. “Today’s agreement brings the FTC’s three-year investigation to a close and puts this matter behind the Company, which will, as always, move forward with its continuous efforts to better serve its customers and enhance its practices.”
The FTC claims that the company hid certain fees — such as those for smart-home technology, air filters and internet packages — that potentially added more than $1,700 per year to the cost of renting. Renters only learned about the charges after receiving or signing their leases, and after paying application fees of up to $55 and reservation fees of up to $500.
Invitation Homes also promised a “quality assurance inspection” and “24/7 emergency maintenance.” But residents in more than 33,000 homes submitted at least one work order, including plumbing and electrical issues, within the first week after they moved in, according to the FTC complaint. Invitation owns or manages more than 100,000 homes.
The agency also alleges that the company systematically withheld renters’ security deposits for normal wear-and-tear damages. Per the FTC, in some regions of the country, the company charged renters for all repairs needed in a unit and reviewed charges only when residents disputed them. This resulted in the return of only 39.2% of consumers’ total security deposits collected between 2020 and 2022, compared to the national average of 63.9%.
The FTC also alleges that, during the COVID-19 pandemic, Invitation Homes steered its tenants away from filing a declaration required by the Centers for Disease Control and Prevention (CDC) to prevent them from being evicted amid a national moratorium.
As part of the proposed settlement, the company is required to disclose fees on lease prices and handle security deposit refunds fairly. The settlement must be approved by a federal judge before going into effect.
Editor’s note: This story has been updated with a statement from Invitation Homes.
