Corporate landlord agrees to refund renters $48 million after federal investigation

Invitation Homes owns or manages roughly 3,500 units in Clark County, where it is the second-largest landlord for single-family homes. The company stands accused of imposing junk fees that were improperly disclosed and other deceptive claims made to tenants. 

The Biden-Harris administration announced this week it has reached a $48 million settlement with the nation’s largest corporate landlord of single-family rentals over claims it deceived renters about so-called junk fees and tenant security deposits. 

The Federal Trade Commission (FTC) on Tuesday announced it had reached a multimillion-dollar agreement with Dallas-based Invitation Homes over, among other things, tens of millions in fees charged to tenants between 2021 and 2023. Officials say Invitation Homes advertised rentals that failed to include required fees for services like smart-home technology and air filter delivery that cumulatively amounted to an extra $1,700 per year. 

The FTC alleged in its complaint that those costs weren’t disclosed to renters until after they received a copy of their lease, or in some cases, already signed their lease. Further, the FTC alleged Invitation Homes made deceptive claims about the condition of properties listed for rent, withheld security deposits without cause, and failed to inform tenants of federal eviction protections during the COVID-19 pandemic. 

The proposed settlement must still be approved by a federal judge, but would require Invitation Homes to disclose fees in advertised rental prices, as well as agree to not withhold security deposits for damages it cannot prove were caused by the previous tenant.

“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,” FTC Chairwoman Lina M. Khan said in a statement. “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.”

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According to Reuters, the company said in a statement it “believes that its disclosures and practices are industry leading, both among its professional peers as well as the millions of smaller owners of single-family homes for lease.” The Reuters report added Invitation Homes did not admit any wrongdoing as part of the settlement. 

Invitation Homes owns or manages more than 100,000 units around the US, including roughly 3,500 around Clark County, where it is the second-largest landlord for single-family homes. 

The $48 million will be used to refund tenants who were impacted by the company’s alleged actions, the FTC said. 

In separate statements, Nevada Democratic Congresswomen Dina Titus (NV-01) and Susie Lee (NV-03) both celebrated the settlement. 

“Invitation Homes owns about 3,500 homes in Clark County. That’s 3,500 families in southern Nevada who have been mistreated in the name of corporate greed,” said Lee. 

She also emphasized the need to pass Rep. Stephen Horsford’s (D-NV) proposal that would outlaw the sale of single-family homes at “unconscionably excessive” or exploitative prices, known as the HOME Act.

The median home price in Nevada has increased from $304,000 in June 2019 to $462,000 as of June of this year, according to the online real estate database Redfin — a nearly 52% increase. Rental prices have also swelled during that stretch, and housing experts estimate Southern Nevada alone needs an additional 80,000 new affordable units to adequately meet demand. 

Titus in her statement added the alleged unfair practices from Invitation Homes helped contribute to the growing issue of housing affordability in and around Las Vegas. 

“The FTC took a major step in addressing deceptive rental practices in Southern Nevada which have contributed to skyrocketing rental costs,” Titus said. “The FTC action requires Invitation Homes to make refunds to consumers and sends a strong message that rent gouging will not be tolerated.”