Moreover, the complaint highlights that homes rented out by Invitation Homes frequently arrived in poor condition, contrary to the company’s claims of thorough inspections. Between 2018 and 2023, many tenants reported significant maintenance issues shortly after moving in, including plumbing, electrical, and mold problems.
The Federal Trade Commission (FTC) is cracking down on Invitation Homes, the nation’s largest landlord of single-family homes, over a series of deceptive practices that harmed renters. The agency has initiated action against the company for misleading tenants about lease costs, charging undisclosed fees, neglecting home inspections, and unfairly withholding security deposits.
As part of a proposed settlement, Invitation Homes will pay $48 million to refund affected consumers. Additionally, the company must improve transparency by clearly disclosing rental prices, creating fair policies for security deposit refunds, and ceasing other unlawful behaviors.
“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. “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.”
The FTC's complaint reveals that Invitation Homes advertised rental rates without including mandatory junk fees, which could add over $1,700 annually. Renters were often unaware of these fees, which included nonrefundable application and reservation charges, until after signing their leases.
The mandatory fees were also highly profitable for Invitation Homes. Between 2021 and June 2023, the complaint alleges, Invitation Homes charged consumers tens of millions of dollars in junk fees as part of their monthly rental payments. The complaint cites a 2019 email from Invitation Homes’ CEO calling 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.
Moreover, the complaint highlights that homes rented out by Invitation Homes frequently arrived in poor condition, contrary to the company’s claims of thorough inspections. Between 2018 and 2023, many tenants reported significant maintenance issues shortly after moving in, including plumbing, electrical, and mold problems. Additionally, promised 24/7 emergency maintenance often failed to materialize, leaving residents in unsafe conditions for extended periods.
The FTC also accuses Invitation Homes of unfairly withholding security deposits, charging renters for normal wear-and-tear, and even for damages that predated their residency. Between 2020 and 2022, the company returned only 39.2% of security deposits, far below the national average of 63.9%.
These problems were known to Invitation Homes, with one employee noting, “The number of resident complaints I field from new move-ins related to the home not being lease ready is both alarming and growing.” A senior employee overseeing thousands of rental houses called the process of preparing houses for new renters a “train wreck.”
Even after renters moved in, the company’s supposed “24/7 emergency maintenance” was frequently nonexistent. According to the complaint, numerous residents complained about being forced to endure days and even weeks in unacceptable—and sometimes dangerous—conditions, including no heat in the middle of winter, no air conditioning in the middle of summer, and flooding or sewage backing up in the home.
According to the complaint, before a renter moves out, an Invitation Homes employee walks through the home and assesses all the damages, repairs, and renovations the home needs before a new tenant moves in. All such items then are placed on the renter’s account, regardless of whether the renter is actually responsible for the cost.
The lawsuit claims that during the COVID-19 pandemic, Invitation Homes employed unfair eviction tactics, misleading tenants about their rights and even initiating evictions against renters who had already vacated their properties.
The complaint notes that Invitation Homes took steps to prevent renters from being made aware of the CDC declaration, including ensuring that the company’s call centers did not recommend that renters file the CDC declaration. When consumers would reach out to company employees for help, employees regularly failed to inform renters about their option to file the CDC declaration, instead falsely telling tenants their only options were to pay rent, accept a balance forgiveness and move out, or undergo the eviction process.
The complaint alleges Invitation Homes even started eviction proceedings against renters who the company knew had already moved out of their houses, which in some cases resulted in eviction filings appearing on tenant screening reports, making it harder for them to rent houses in the future. In one instance noted in the complaint, a renter was told by Invitation Homes that if she moved out of her house, she would not have an eviction filed against her, but after she moved out the company still filed the eviction
Under the terms of the proposed settlement, Invitation Homes will be prohibited from deceptive pricing practices, will have to provide clear information about security deposits, and must notify tenants of eviction assistance programs. This settlement, pending approval from a federal judge, also requires the company to destroy consumer financial data collected prior to the settlement, with some exceptions.
Invitation Homes is set to pay $48 million to the Federal Trade Commission (FTC) as part of a proposed settlement addressing its unlawful actions that harmed renters. The funds will be used to refund affected consumers.
The settlement includes strict new requirements for Invitation Homes going forward. The company must:
Stop misleading consumers about the true rental costs, ensuring that all mandatory fees are included in advertised prices and clearly labeled as such.
No longer withhold security deposits for normal wear and tear; any withheld funds must be used solely for specific damages.
Avoid using security deposits to address pre-existing issues or routine maintenance unrelated to tenant-caused damage.
Inform tenants about federal, state, or local eviction assistance programs.
Refrain from filing eviction proceedings against tenants who have already moved out and notified the company of their departure.
Before the settlement can take effect, it must receive approval from a federal judge. Additionally, Invitation Homes will be required to destroy consumer financial data collected before the settlement, except in cases where that information is necessary for current renters.
This action comes as part of the FTC's broader initiative, having established a Renters Working Group earlier this year to tackle unfair practices affecting tenants. The agency has been actively engaging with renters to gather insights and has taken this enforcement action as a continuation of its efforts in the housing sector, following previous cases involving companies like TransUnion and Opendoor.
This enforcement action marks the FTC's first major move since forming an agency-wide Renters Working Group, aimed at addressing unfair practices in the rental market. The FTC’s decision to file the complaint was unanimous among commissioners, underscoring the agency's commitment to protecting renters across the country.
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