The Federal Trade Commission is pursuing legal action against Invitation Homes, the largest landlord of single-family homes in the U.S. The complaint filed by the FTC claims the company has taken several illegal actions, including misleading renters about lease costs, charging hidden fees, neglecting to inspect homes prior to move-in, and unfairly withholding security deposits after tenants vacated.
The complaint filed by the FTC alleges that Invitation Homes advertised rental rates that failed to mention fees like smart home tech, utility management, air filter delivery, and internet packages.
Renters were not allowed to opt out of the fees and, in some cases, weren’t informed of these fees until after they’d signed a lease.
The FTC reports these junk fees amounted to more than $1,700 a year for some tenants, which the agency alleges netted Invitation Homes tens of millions of dollars between 2021 and 2023.
One email the release cited in the complaint “called on the senior vice president responsible for overseeing the company’s fee program to ‘juice this hog’ by making the smart home fee mandatory for renters.”
Invitation Homes also promised 24/7 emergency maintenance and home inspections, which were not provided, according to the report. Between 2018 and 2023, residents at 33,328 properties submitted at least one work order in the first week of moving into a property. Issues listed include plumbing, electrical, heating, and air conditioning service requests. Some residents reported dirty houses, mold issues, rodent droppings, broken appliances, and exposed wiring—issues that likely would have been noticed during a property inspection.
These challenges were well known to Invitation Home employees, with one employee sharing in the FTC press release, “The number of resident complaints I field from new move-ins related to the home not being lease ready is both alarming and growing.”
The complaint also alleges Invitation Homes employed unfair eviction practices, even during the COVID-19 pandemic when both national and state eviction restrictions were in effect.
Invitation Homes allegedly discouraged renters from submitting the CDC declaration required to prevent eviction, steering them instead toward the company’s own “Hardship Affidavit,” which, despite its name, offered no protection from eviction.
In response to these and other allegations, the FTC has proposed a settlement (which Invitation Homes has accepted), requiring the landlord to turn over $48 million to give refunds to consumers harmed by the company’s unlawful actions.
The settlement is currently waiting on approval from a federal judge.
Legislatures step in
Invitation Homes says the agreement contains “no admission of wrongdoing.”
The company says the settlement: “puts this matter behind the company” and it will “move forward… to better serve its customers.”
“It’s a win for families. But let’s be clear. These abuses are symptoms of a much larger problem,” Sen. Jeff Merkley (D-Ore.) said. Merkley said corporate investors are invading the housing market.
A forecast by MetLife Investment Management found institutional investors could control 40 percent of single-family rental homes by 2030.
“They’re driving up the price to buy a home, putting a stake through the heart of the dream of homeownership,” Merkley said.
Merkley is sponsoring a bill he says would stop that. It would ban hedge funds from buying single-family homes and make them sell the homes they do own.
“These are common sense guard rails,” Merkley said.
Merkley’s bill has stalled since he introduced it last year, but he says he’s encouraged by the FTC’s actions.
The FTC said the settlement money will refund renters hurt by the company. The funds are subject to approval by a federal judge.
