Invitation Homes settles FTC lawsuits and agrees to repay $48 million

In a significant legal resolution, Invitation Homes, the largest landlord of single-family homes in the United States, has agreed to pay a substantial $48 million to settle federal claims of dishonesty and unfair practices against renters, as revealed by the Federal Trade Commission (FTC).

The investigation, which spans from 2021 to 2023, highlighted that the company imposed mandatory monthly fees concealed until after renters had signed leases. These fees, intended for services such as smart-home technology and air filter delivery, amounted to almost $1,700 annually without prior disclosure, causing undue financial burden on tenants.

In addition, the company was accused of misleading tenants about property conditions, withholding security deposits without just cause, and neglecting to inform tenants about federal eviction protections during the pandemic.

Exposing deceptive practices

Federal officials unveiled that potential residents were misled into believing they would experience a 'worry-free leasing lifestyle' in pre-inspected homes with round-the-clock maintenance. However, upon moving in, many faced significant issues including sewage backups, broken appliances, and visible rodent infestations, raising questions about the company's integrity.

The proposed settlement, awaiting federal judge approval, mandates that Invitation Homes disclose all charges in advertised rental prices. Moreover, the company is prohibited from withholding security deposits to address issues not caused by tenants. This marks the FTC's first enforcement action through its dedicated group examining unfair and deceptive practices impacting renters from its formation.

While Invitation Homes, valued at nearly $22 billion and publicly traded, maintained its innocence in related matters, it emphasized its commitment to enhancing customer service moving forward. The settlement aims to not only provide financial restitution to affected residents but also enforce stricter regulatory measures to safeguard renters from similar deceptive practices in the future.