The Federal Trade Commission (FTC) has set its sights on Invitation Homes, the nation’s largest single-family home landlord, accusing the company of a litany of deceptive and unfair practices that have left tens of thousands of renters out in the cold. The FTC’s lawsuit, filed in the U.S. District Court for the Northern District of Georgia, paints a damning picture of a corporate giant that allegedly used hidden fees, false advertising, and predatory tactics to pad its bottom line at the expense of vulnerable tenants.

At the heart of the FTC’s complaint is the allegation that Invitation Homes routinely advertised rental prices that were significantly lower than what tenants actually ended up paying. According to the lawsuit, the company lured in potential renters with attractive monthly rates, only to tack on mandatory “junk fees” that could add up to more than $1,700 per year. These hidden charges, which included fees for “smart home” technology, “utility management,” and even air filter delivery, were not disclosed until after tenants had already paid non-refundable application and reservation fees.

The scale of this alleged deception is staggering. The FTC claims that since 2019, Invitation Homes has collected over $18 million in application fees alone for these deceptively priced properties. Even more alarming, between 2021 and June 2023, the company is said to have charged consumers tens of millions of dollars in undisclosed junk fees as part of their monthly rental payments.

But the deception didn’t stop at hidden fees. The FTC alleges that Invitation Homes made false promises about the condition of its rental properties and the quality of its maintenance services. Despite advertising that every home passes a “quality assurance inspection” before move-in and boasting of “24/7 emergency maintenance,” the reality for many tenants was far different. The lawsuit cites numerous instances of renters arriving at their new homes to find them in significant disrepair, with issues ranging from plumbing and electrical problems to more severe hazards like mold, broken appliances, and exposed wiring.

One particularly damning statistic from the complaint reveals that between 2018 and 2023, residents in 33,328 Invitation Homes properties submitted at least one work order within the first week after moving in. This widespread problem was apparently well-known within the company. The lawsuit quotes one employee as 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.” Another senior employee overseeing thousands of rental houses described the process of preparing homes for new renters as a “train wreck.”

The FTC’s allegations extend beyond move-in issues to the company’s practices when tenants move out. According to the complaint, Invitation Homes systematically withheld renters’ security deposits, often charging for normal wear-and-tear, pre-existing damages, and even renovations that were not the tenants’ responsibility. This practice directly contradicted the company’s own representations to prospective renters that security deposits would only be charged for damage beyond normal wear and tear.

The lawsuit describes a deeply flawed process for assessing move-out charges. An Invitation Homes employee would walk through the vacated property and list all necessary repairs and renovations, regardless of whether they were the tenant’s responsibility. Later, a different employee who never visited the property would decide which costs to pass on to the former tenant. This system resulted in numerous improper charges, with some regions of the company reportedly doing away with any review process altogether and charging tenants for all repairs by default.

The impact of these practices was significant. Between 2020 and 2022, Invitation Homes returned only 39.2% of consumers’ total security deposit dollars collected, compared to the national average of 63.9%. This discrepancy translated into millions of dollars unfairly withheld from tenants.

Perhaps most troubling are the FTC’s allegations about Invitation Homes’ eviction practices during the COVID-19 pandemic. Despite federal and state restrictions on evictions, the company is accused of steering tenants away from filing the CDC declaration that would have protected them from eviction. Instead, Invitation Homes encouraged renters to complete the company’s own “Hardship Affidavit,” which provided no actual eviction protection.

The lawsuit claims that Invitation Homes took active steps to prevent renters from learning about the CDC declaration, including instructing its call centers not to recommend filing the declaration. When tenants reached out for help, company employees allegedly failed to inform them about their right to file the CDC declaration, instead falsely claiming their only options were to pay rent, accept a balance forgiveness and move out, or face eviction.

In some cases, the FTC alleges that Invitation Homes even initiated eviction proceedings against tenants who had already moved out, potentially damaging their ability to rent in the future. One particularly egregious example cited in the complaint involves a tenant who was told that moving out would prevent an eviction filing, only to have the company file for eviction after she had vacated the property.

The FTC’s proposed settlement with Invitation Homes is sweeping in its scope. If approved by a federal judge, the company would be required to pay $48 million to refund consumers harmed by its actions. The settlement also includes a host of requirements aimed at preventing future abuses, including prohibitions on deceptive advertising, unfair security deposit practices, and improper eviction filings.

FTC Chair Lina M. Khan didn’t mince words in her statement on the case: “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.”

This action against Invitation Homes is part of a broader FTC initiative to address unfair and deceptive practices in the rental market. Earlier this year, the agency formed a Renters Working Group to examine issues affecting tenants and has been holding listening sessions to hear directly from renters.

As the housing market continues to squeeze American families, the FTC’s crackdown on Invitation Homes sends a clear message to corporate landlords: deceptive and unfair practices will not be tolerated. For the tens of thousands of tenants who have found themselves at the mercy of these practices, the FTC’s action offers hope for accountability and change in an industry that has long operated in the shadows.