CALIFORNIA – The Federal Trade Commission (FTC) announced September 24, that Invitation Homes, the country’s largest landlord of single-family homes with 12,000 in California, has agreed to a $48 million proposed settlement to refund renters harmed by its actions.
The company is accused of an array of unlawful actions against consumers.
These actions include deceiving renters about lease costs, charging undisclosed junk fees, failing to inspect homes before residents moved in, and unfairly withholding tenants’ security deposits when they moved out.
Fee bundle added $720 to one-year lease
According to court documents, Invitation Homes charges people for mandatory junk fees that are not included in the advertised rental price and are not adequately disclosed before someone submits a rental application.
“For example, since at least 2018, Invitation Homes has added undisclosed fees to residents’ rent, first in the form of a “utility management fee,” and later a “Lease Easy bundle” fee, which includes the utility management fee, an “air filter delivery” fee, and a “smart home technology” (or “smart home”) fee,” said the court document.
This fee bundle, which can add $60 per month to the rental payment – $720 over the course of a one-year lease, is mandatory for the substantial majority of the company’s homes.
The FTC says from 2021 to June 2023, Invitation Homes charged consumers over $60 million in Lease Easy fees as part of their monthly rental payments.
People do not learn the total monthly cost to rent a home from Invitation Homes until they receive a copy of their lease, which is the first time that Invitation Homes itemizes the mandatory add-on fees.
“By this time, all applicants have paid nonrefundable application fees, and many have paid holding fees and other expenditures related to moving—only to learn that their rent could be as much as $1,740 higher per year,” said the court document.
Tenants charged for normal wear and tear at move out
Other unlawful practices alleged in the court document are tenants moving into a home in disrepair and a 24/7 emergency maintenance that is non-existent.
The FTC also alleges that Invitation Homes withheld renters’ security deposits when they moved out and unfairly charged them for normal wear-and-tear, damages that existed before renters moved in, and even renovations.
During the pandemic, the FTC says Invitation Homes purposely steered renters away from filing the Centers for Disease Control and Prevention, (CDC) declaration required to prevent renters from being evicted, instead encouraging renters to complete the company’s own “Hardship Affidavit.”
“Despite its name, this document provided no eviction protection to renters,” said the FTC in a statement.
Invitation Homes must include all mandatory fees in advertised rent price
In addition to the $48 million payout to refund consumers, Invitation Homes must include all mandatory fees in a house’s advertised rental price and are prohibited from withholding security deposit money for normal wear-and-tear, along with other requirements.
The settlement must be approved by a federal judge before it can go into effect.
Consumers can get more information by contacting the FTC Consumer Response Center at 877-382-4357.
To read the full court document visit https://www.ftc.gov/system/files/ftc_gov/pdf/InvitationHomes-StipulatedOrder-fully-executed-final_0.pdf
