By Randy Hutchinson
President of the BBB of the Mid-South
Reprinted from The Commercial Appeal
Texas-based Invitation Homes is one of the largest single-family home landlords in the country with more than 80,000 rental homes in 16 geographical markets. It touted tenant-friendly procedures, remodeled homes, 24/7 emergency maintenance, and deductions from security deposits only for damage beyond normal wear and tear. The FTC says the reality was very different and the BBB revoked the company’s BBB Accreditation.
The FTC says Invitation Homes advertised monthly rental rates that didn’t include mandatory junk fees that could run more than $1,700 yearly, including application and reservation fees, as well as undisclosed fees for services such as smart home technology, utility management, and air filter delivery and internet packages. Renters didn’t learn about the additional charges until they got a copy of their lease and sometimes not until they signed it.
The company made tens of millions of dollars off undisclosed and non-refundable fees. The CEO sent an email instructing the executive in charge of the fee program to “juice this hog” by making the smart home fee mandatory.
Invitation Homes claimed that every rental home passes a “quality assurance inspection.” But the FTC says that between 2018 and 2023, residents in 33,328 properties submitted a work order in the first week for plumbing, electrical, heating and air conditioning, and other problems. Some complained about mold, broken appliances, rodent feces and exposed wiring. Despite the company’s promise of 24/7 emergency maintenance, residents complained about going days with no heat in the winter and no air conditioning in the summer. Some had to tolerate flooding or sewage backing up in the home for days.
The company represented that security deposits would only be charged for damage the resident caused beyond normal wear and tear, but the FTC says they were charged for preexisting damage and renovations. Between 2020 and 2022, Invitation Homes only returned 39.2 percent of tenants’ total security deposits, compared to a national average of 63.9 percent.
Finally, the FTC says Invitation Homes employed unfair eviction practices, including during the COVID-19 pandemic when national and state restrictions were in place. The company steered tenants away from the eviction moratorium process established by the Centers for Disease Control and Prevention (CDC) to its own “Hardship Affidavit,” which provided no eviction protection. They often failed to tell renters about the CDC’s protections, instead saying the only options were to pay the rent, accept a balance forgiveness and move out, or face eviction.
The proposed settlement with the FTC requires Invitation Homes to pay over $48 million in refunds to customers, to properly disclose all fees, and to only deduct charges from security deposits for damage beyond normal wear and tear caused by the tenant. It must also notify people facing eviction about federal, state, or local programs that might help them.
If you’re going to rent a property:
- Check out a corporate landlord with the BBB (we don’t maintain reports on individuals who rent one or a few properties). Research any landlord online using terms like “complaints,” “reviews,” or “scams” to learn what kind of experience other consumers have had with them.
- Be on the lookout for hidden fees in footnotes, hyperlinks or fine print.
- Take photos when you move in and send them to the landlord, particularly if there’s any damage, and when you move out.