The allegations behind Invitation Homes' $48 million settlement

"No American should pay more for rent or be kicked out of their home because of illegal tactics by corporate landlords," said FTC Chair Lina Khan in a statement. 

FTC attorneys in a 52-page federal complaint filed this week cite numerous customer complaints and Invitation employees who were alarmed with their workplace's alleged wrongdoings. Tenants collectively paid millions of dollars in excessive application fees; moved into homes with significant disrepair; and were hit with eviction proceedings even after moving out, according to the filing.

The company, which went public in 2017, owns over 84,000 homes outright and reported $73.4 million in net income in the second quarter, a figure down 46% year-over-year. Single-family rental industry veteran Dallas Tanner has been the company's CEO since 2019. It's the largest player in the residential investor space which, according to some analyses, accounts for around a quarter of home purchases nationwide. 

"Invitation Homes 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 company said in a statement Tuesday. 

The FTC's findings
Illicit activity allegedly began before consumers moved in, as the company collected over $18 million in application fees since 2019 for deceptively priced homes. Application and reservation fees could reach up to $55 and $500, respectively, while junk fees could total up to $1,700 annually, the FTC said. 

Hidden, mandatory fees included a "smart home technology" expense up to $60 per month and "internet package" fee up to $85 per month. The FTC complaint describes executives discussing the alleged deceptive fees, with a CEO in 2019 telling an executive to "juice this hog" regarding the smart home fee. 

The company's around-the-clock emergency maintenance was "nonexistent," according to feds, as 33,328 properties between 2018 and 2023 submitted work orders for plumbing, electrical, heating and air conditioning requests within the first week of a move-in. Residents say they went days and weeks in conditions including no heat during the winter nor AC in the summer, flooding and sewage in homes. 

In another two-year stretch, Invitation allegedly only returned 39.2% of customers' total security deposit funds compared to a national average of 63.9%. Although a company employee performed walkthroughs of homes before a tenant moved out, the landlord charged renters for all repairs by default and often left tenants no recourse to dispute the charges.

During the coronavirus pandemic, Invitation ignored a federal eviction moratorium, discouraging tenants from filing the necessary declaration and forcing them to pay rent, move out or be evicted, according to the suit. Further, Invitation allegedly began eviction proceedings on renters who already moved out, placing the unfair inquiries on their tenant screening reports. 

The settlement agreement, yet to be approved by a Georgia federal court, prohibits Invitation from carrying out its earlier deceptive practices and requires them to notify consumers about eviction protections. The company will also have to destroy consumer financial data it collected prior to the settlement, outside of necessary data for current renters. 

Invitation's stock took a slight hit on the news Tuesday, dropping almost $2 per share. It's since stabilized and was trading at $35.46 per share around noon Thursday.