A Dallas-based property management company has agreed to pay $48 million in settlement funds after deceiving tens of thousands of renters by withholding security deposits and engaging in other illegal practices.
The Federal Trade Commission (FTC) announced Tuesday that it is taking action against Invitation Homes, the largest landlord of single-family homes in the nation, for its unlawful practices against renters.
The FTC reported that Invitation Homes advertised a false rental price to potential tenants.
Renters only discovered that their rental price would be higher when receiving a copy of their lease, or sometimes not even after signing it. The additional fees on top of the rent could total more than $1,700 yearly and include services such as “smart home” technology, air filter delivery, and internet packages.
Since 2019, the management company has collected more than $18 million in added-on fees.
Additionally, Invitation Homes wrongfully claimed that every home it owns passes a quality assurance inspection before the renters move in, and renters will be provided with 24/7 emergency maintenance.
Between 2018 and 2023, residents in 33,328 properties experienced issues in plumbing, electrical, heating, and air conditioning services within the first week of moving in. Some residents reported houses with mold, broken appliances, rodent feces, and exposed wiring.
Renters reported waiting days and weeks for maintenance, even when they experienced no heat during winter, no air conditioning in the summer, and sewage or flooding in their homes.
The company is also accused of withholding renters’ security deposits when they moved out by charging them for damages that existed before renters moved in.
Between 2020 and 2022, Invitation Homes returned 39.2% of renters’ total security deposit dollars. The national average, per the FTC, is 63.9%.
During the coronavirus pandemic, Invitation Homes employees intentionally did not inform struggling renters about the CDC’s national eviction moratorium that protected renters. Instead, employees allegedly told tenants their only options were to pay rent, accept a balance forgiveness, move out, or be evicted.
The company filed evictions against tenants who had already moved out, making it harder for them to rent homes in the future.
A federal judge approved the $48 million settlement, which will be used to refund previous renters.
“Invitation Homes, the nation’s largest single-family home landlord, preyed on tenants through a variety of unfair and deceptive tactics, from saddling people with hidden fees and unjustly withholding security deposits to misleading people about eviction policies during the pandemic and even pursuing eviction proceedings after people had moved out,” said FTC Chair Lina M. Khan in a statement.
“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,” Khan added.