FTC targets Invitation Homes for deceptive practices

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Alvaro Bedoya | Commissioner | Federal Trade Commission website

FTC targets Invitation Homes for deceptive practices

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The Federal Trade Commission (FTC) is taking action against Invitation Homes, the largest landlord of single-family homes in the United States, for several unlawful practices. These include deceiving renters about lease costs, charging undisclosed fees, failing to inspect homes before residents moved in, and unfairly withholding security deposits.

Invitation Homes has agreed to a proposed settlement that would require the company to pay $48 million to refund affected consumers. The company must also disclose leasing prices clearly, establish fair security deposit refund policies, and cease other unlawful activities.

“Invitation Homes, the nation’s largest single-family home landlord, preyed on tenants through a variety of unfair and deceptive tactics,” said FTC Chair Lina M. Khan. “No American should pay more for rent or be kicked out of their home because of illegal tactics by corporate landlords.”

The complaint alleges that Invitation Homes advertised rental rates without including mandatory fees that could total more than $1,700 annually. Consumers often discovered these fees only after signing leases. Since 2019, Invitation Homes has collected over $18 million in application fees alone based on deceptively priced houses.

Invitation Homes also failed to inspect homes properly before renters moved in and did not provide promised emergency maintenance services. Between 2018 and 2023, residents submitted numerous work orders within the first week of moving in due to issues like plumbing and electrical problems.

The FTC further alleges that Invitation Homes systematically withheld security deposits by charging tenants for normal wear-and-tear or pre-existing damages. This practice contradicted the company's promises about security deposit usage.

During the COVID-19 pandemic, Invitation Homes used unfair eviction practices despite national and state restrictions on evictions. The company steered renters away from filing CDC declarations required to prevent evictions and misled them about their options.

Under the proposed settlement, Invitation Homes would need to:

- Disclose all mandatory monthly fees in advertised rental prices.

- Prohibit withholding security deposit money for normal wear-and-tear or pre-existing issues.

- Notify consumers about programs designed to assist those facing eviction.

- Avoid filing evictions against renters who have already moved out.

The settlement requires federal judge approval before it takes effect. It also mandates that Invitation Homes destroy consumer financial data collected before the settlement unless needed for current renters.

Earlier this year, the FTC formed a Renters Working Group to examine unfair practices affecting renters. This action against Invitation Homes is the first enforcement since the group's formation.

The FTC's vote authorizing staff to file the complaint was unanimous at 5-0. Commissioner Melissa Holyoak issued a concurring statement while Commissioner Andrew Ferguson issued a concurring and dissenting statement. The complaint was filed in the U.S. District Court for the Northern District of Georgia.

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