The Federal Trade Commission (FTC) has taken action against Invitation Homes Inc (INVH), the largest U.S. landlord of single-family homes, for engaging in unfair and deceptive practices against its renters. The FTC’s complaint alleges that Invitation Homes misled tenants about lease costs, charged hidden fees, neglected home inspections, and unfairly withheld security deposits.
To resolve these allegations, Invitation Homes has agreed to pay a hefty $48 million settlement. This settlement will be used to refund affected consumers who were subject to the company’s deceptive practices.
FTC Chair Lina Khan stated that Invitation Homes exploited tenants through various deceptive tactics, including hidden fees, unjustified security deposit withholdings, and misleading eviction policies during the pandemic.
The FTC’s complaint detailed several specific violations by Invitation Homes, including deceptive pricing practices. The company advertised rental prices without disclosing mandatory fees that could exceed $1,700 per year. These fees were for services like smart home technology and utility management, which renters were not allowed to opt out of. Between 2021 and 2023, Invitation Homes charged renters tens of millions of dollars in these undisclosed fees.
Furthermore, the company failed to fulfill its promises regarding home inspections and emergency maintenance services. Over 33,000 properties reported serious issues within the first week of tenants moving in, including broken appliances and unclean conditions. Despite claims of providing 24/7 emergency maintenance, renters often faced delays in addressing urgent repairs, leaving some in dangerous conditions.
The FTC’s investigation also revealed that Invitation Homes unfairly withheld security deposits, charging tenants for normal wear and tear or even damages that existed before they moved in. In some cases, the company charged renters for all repairs, only reviewing the charges if residents disputed them. However, renters often struggled to reach anyone to resolve their complaints.
During the pandemic, Invitation Homes implemented unethical eviction practices. The company actively steered tenants away from the CDC’s eviction moratorium by promoting its own document, which offered no eviction protection. Additionally, Invitation Homes initiated eviction proceedings against tenants who had already moved out, negatively impacting their ability to rent in the future.
The settlement reached with the FTC requires Invitation Homes to significantly change its business practices. The company must now clearly disclose rental prices, establish fair security deposit policies, and ensure transparent and reliable maintenance services.
The agreement, which is pending approval from a federal judge, also mandates the destruction of consumer financial data collected before the settlement. This step aims to protect the privacy of affected tenants.
While this settlement marks a victory for renters who were subjected to Invitation Homes’ deceptive practices, it also serves as a reminder to all landlords to operate ethically and transparently. Fair and honest business practices are essential to ensuring a healthy rental market that benefits both landlords and tenants.
