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(ThyBlackMan.com) The nation’s largest corporate landlord for single-family home rentals was recently fined $48 million by the Federal Trade Commission (FTC) for years-long financial abuses of tenants. The firm, Invitation Homes, also will be required to change its practices, and agree to long-term monitoring of its rental activity.
According to the September 24 settlement, renters who resided in one of Invitation Homes’ over 33,000 properties between 2018 and 2023 will be the beneficiaries. Its rental properties across the nation are located in both cities and suburbs including – but not limited to: Atlanta, Chicago, Dallas, Denver, Houston, Los Angeles, Miami, Minneapolis, and Seattle.
“Invitation Homes, the nation’s largest single-family home landlord, preyed on tenants through a variety of unfair and deceptive tactics, from saddling people with hidden fees and unjustly withholding security deposits to misleading people about eviction policies during the pandemic and even pursuing eviction proceedings after people had moved out,” said FTC Chair Lina M. Khan in a September 24 announcement. “No American should pay more for rent or be kicked out of their home because of illegal tactics by corporate landlords. The FTC will continue to use all our tools to protect renters from unlawful business practices.”
Founded in 2012, Invitation Homes’ initial public offering (IPO) raised approximately $1.77 billion, making it and is the second- largest real estate investment trust (REIT) IPO in history, according to its website.
Regulators said Invitation Homes was guilty of anti-consumer practices that included:
Deceiving renters about lease costs including $500 ‘reservation fees’ in addition to application fees. Since 2019, Invitation Homes has collected more than $18 million in application feesalone for deceptively priced houses;
Charging undisclosed junk fees – costing consumers up to $1,700 per year;
Failing to inspect homes before residents moved in;
Unfairly withholding tenants’ security deposits when they moved out; and
Other misrepresentations including total monthly leasing price, property condition, and availability of emergency maintenance,
In a related consumer alert posted on FTC’s website, Larissa Bungo, a senior attorney, shared more details documenting why the enforcement action is warranted.
“Landlords must truthfully advertise the prices and services they’re offering, said Bungo. “The FTC says Invitation Homes advertised an overall “worry-free leasing lifestyle” and promised pre-inspected homes before move-in and “24/7 emergency maintenance” for any issues, but failed to deliver.”
“Instead, new residents faced major issues like sewage backup, broken appliances, and visible rodent feces,” continued Bungo. “The promises didn’t live up to the hype and, to add insult to injury, according to the FTC, Invitation Homes wrongly withheld some or all of renters’ security deposits for things like normal wear and tear or damage that was already there before renters moved in. Which is also illegal.”
The fall settlement also marks a milestone victory for consumer advocates that in recent years have urged federal regulatory agencies to adopt and enforce rules to better protect consumers from an array of junk fees.
For example, in 2022, four national consumer advocates – Americans for Financial Reform, the Consumer Federation of America, the National Consumer Law Center, and the Center for Responsible Lending (CRL), jointly urged the Consumer Financial Protection Bureau (CFPB), to enact junk fee rules.
“Hidden fees and costs strip wealth from the most vulnerable consumers who are struggling to make ends meet,” wrote the advocates. “The most impacted consumers often come from communities of color already burdened by other predatory practices, further exacerbating racial inequities… Disclosure is intended to give consumers an opportunity “know before they owe.” But that knowledge is worthless if charges are imposed under circumstances that most consumers would not expect even if, with hindsight, the fees were disclosed.”
By early February 2023, junk fee advocacy grew to involve more than 40 national and state consumer advocates who together appealed to the FTC for its own agency rules and actions.
Created in 1915, the FTC has two primary missions: protecting competition and protecting consumers. It is empowered to investigate as well as prevent unfair methods of competition, and unfair or deceptive acts or practices affecting commerce.
Consumers who suspect a company may be engaging in fraud, scams or bad business practices can share their concerns at https://reportfraud.ftc.gov/.
Written by Charlene Crowell
Official website; http://twitter.com/charlenem2
