The Federal Trade Commission (FTC) has filed a complaint against Invitation Homes Inc (NYSE:INVH), the largest U.S. landlord of single-family homes, for engaging in unfair and deceptive practices against renters.
These include misleading tenants about lease costs, charging hidden fees, neglecting home inspections, and withholding security deposits unfairly. The company has agreed to a $48 million settlement, which will be used to refund affected consumers.
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According to FTC Chair Lina Khan, Invitation Homes exploited tenants with various deceptive tactics, from hidden fees and unjustified security deposit withholdings to misleading eviction policies during the pandemic.
The FTC's complaint highlighted several violations by Invitation Homes, including deceptive pricing practices.
The company advertised rental prices without disclosing mandatory fees that totaled more than $1,700 per year. These fees were for services like smart home technology and utility management, which renters could not opt out of.
Between 2021 and 2023, Invitation Homes charged renters tens of millions of dollars in these undisclosed fees.
The company also failed to honor promises of home inspections and emergency maintenance services. Over 33,000 properties had reported serious issues within the first week of tenants moving in, ranging from broken appliances to unclean conditions.
Despite claims of providing 24/7 emergency maintenance, renters often experienced delays in addressing urgent repairs, with some left in dangerous conditions.
Additionally, the report findings claim 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, but often, renters struggled to reach anyone to resolve their complaints.
During the pandemic, Invitation Homes also employed unethical eviction practices. The company steered tenants away from the CDC's eviction moratorium by promoting its document, which offered no eviction protection.
Furthermore, Invitation Homes initiated eviction proceedings against tenants who had already moved out, impacting their ability to rent in the future.
The settlement requires Invitation Homes to change its business practices, clearly disclose rental prices, and establish fair security deposit policies.
The agreement, pending approval from a federal judge, also mandates the destruction of consumer financial data collected before the settlement.
Price Action: INVH stock closed at $35.57 on Tuesday.
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