Invitation Homes Agrees To $48M Settlement For FTC Complaint Over Junk Fees, Poor Maintenance

Invitation Homes has agreed to settle a complaint from The Federal Trade Commission that the landlord is acting unlawfully toward consumers. 

The FTC filed a complaint Tuesday against the nation's largest single-family landlord, alleging it is charging junk fees and deceptive leasing costs, unfairly withholding security deposits and not inspecting homes.

The settlement, which needs a judge's approval before going into effect, includes paying $48M to refund customers. The landlord will also have to clearly state leasing prices, establish procedures for fair security deposits and "stop other unlawful" practices. 

The complaint states Invitation Homes markets homes that pass quality inspections and offers 24/7 emergency maintenance, only for renters to find them in disrepair upon moving in. Residents in over 33,000 properties submitted at least one work order within a week of moving in between 2018 and 2023, with some finding mold, rodent feces, exposed wiring, as well as plumbing and other electrical issues. 

Some renters had to live in uninhabitable conditions, such as lack of heat in the winter or air conditioning in the summer, for weeks, the complaint states.

An Invitation Homes employee called the landlord's process for preparing homes for new residents a "train wreck," according to the complaint. 

The complaint states Invitation Homes charges renters for all damages, repairs and renovations needed before a new tenant moves in regardless of whether the renter is responsible. The FTC alleges the landlord systemically withheld security deposits and contradicted Invitation Homes’ stated policy that security deposits would only be withheld for damage beyond wear and tear.

In some cases, according to the complaint, Invitation Homes began the legal process to evict residents who had already moved out, making it harder for those renters to secure housing in the future.

This complaint isn't the first for the landlord. In July, Invitation Homes agreed to settle for $20M over a dispute that alleged the company failed to pull the required permits for renovations on thousands of homes it purchased across California. 

“Invitation Homes, the nation’s largest single-family home landlord, preyed on tenants,” FTC Chair Lina Khan said Tuesday regarding the latest complaint.

“The FTC will continue to use all our tools to protect renters from unlawful business practices,” she added.

The FTC formed a Renters Working Group this year to crack down on unfair practices that affect renters. In June, the commission announced a plan to go after antitrust and price-fixing schemes that affect renters. Most recently, that included RealPage — the DOJ filed an antitrust suit in August after a two-year probe. 

“The Biden-Harris Administration is fighting to lower housing costs—from calling on Congress to build millions of new homes, to enacting the largest increase in rental assistance in 20 years, to capping rent increases for federally financed units. Today’s FTC action supplements these efforts, returning $48M to American renters that were allegedly ripped off by corporate landlords charging hidden junk fees," White House Spokesperson Jeremy Edwards said in a statement emailed to Bisnow. 

As a result of that lawsuit, landlords and apartment owners have become wary of using AI to determine rental prices and are examining alternative ways to determine market-rate rents.

UPDATE, SEPT. 25, 1:40 P.M. ET: A statement from White House Spokesperson Jeremy Edwards has been added.