The country’s largest single-family landlord is settling a probe into its alleged use of “junk fees” and other hidden costs.
Invitation Homes agreed to pay $48 million to settle the case launched by the Federal Trade Commission, according to a statement reported by Bloomberg. A federal judge will need to approve the settlement, which includes no admission of wrongdoing.
The three-year investigation by the FTC found that Dallas-based Invitation Homes collected tens of millions of dollars in hidden costs from renters between 2021 and 2023, according to a statement from the agency. Those costs included smart-home technology, utility management and services that weren’t disclosed until after a tenant locked in their lease.
The FTC alleged other wrongdoing on the part of Invitation Homes. It accused the landlord of making false promises about the condition of its properties, unjustly withheld security deposits and didn’t inform renters about federal Covid-19 eviction protections.
Invitation Homes returned only 39.2 percent of total security deposit dollars collected between 2020 and 2022. The national average was 63.9 percent, according to the FTC complaint.
The news marks the first enforcement action from the FTC’s newly formed Renters Working Group.
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Under the terms of the settlement, Invitation Homes will need to list mandatory monthly fees in advertised rentals and destroy select consumer financial data collected before the settlement. The landlord is also barred from withholding security deposits when a needed repair doesn’t stem from damage wrought by a tenant.
Invitation Homes previously disclosed in regulatory filings that it was cooperating with the FTC and set aside money to deal with the issue.