Invitation Homes deceived renters and will refund $48 million, FTC says

Invitation Homes has agreed to pay $48 million to settle federal claims that the nation's biggest landlord for single-family homes deceived renters about lease fees and other costs, while unfairly pocketing tenants' security deposits, the Federal Trade Commission said Tuesday.

The Dallas-based company charged tens of millions of dollars in "junk fees" between 2021 and 2023, the FTC said in a statement. The mandatory monthly fees covered services such as smart-home technology and air filter delivery that could cost up to $1,700 a year, but that weren't disclosed until renters received their lease or sometimes not until after they'd signed it, according to the agency.

"No American should pay more for rent or be kicked out of their home because of illegal tactics by corporate landlords," FTC Chair Lina Khan said in a statement.  

The settlement comes as the Biden administration takes action to stamp out junk fees in the airline, event ticket and other businesses.  

"Visible rodent feces"

Invitation Homes, which owns or manages more than 100,000 homes around the U.S., "will be refunding $48 million to residents and changing its practices," said Larissa Bungo, a senior attorney at the FTC, said in a post on the agency's website. 

The company also made deceptive claims about the condition of the properties it listed for rent, withheld security deposits without cause and failed to let tenants know about federal eviction protections during the pandemic, the agency alleged.

Marketing a "worry-free leasing lifestyle" and promising pre-inspected homes before move in and 24/7 maintenance, new residents instead faced issues like "sewage backup, broken appliances and visible rodent feces," Bungo wrote. 

In a statement, Invitation Homes said its agreement with the FTC doesn't admit any wrongdoing by the company, which is publicly traded and valued at nearly $22 billion. 

"Today's agreement brings the FTC's three-year investigation to a close and puts this matter behind the company, which will, as always, move forward with its continuous efforts to better serve its customers," Invitation Homes said.

The proposed settlement, which must be approved by a federal judge, requires Invitation Homes to disclose fees in advertised rental prices. It also stipulates that the company cannot withhold security deposits to fix things not caused by tenants. 

The enforcement action is the first by the FTC since the agency formed a working group to examine unfair, deceptive and anticompetitive practices affecting renters.