The Federal Trade Commission on Tuesday announced that Invitation Homes, one of the biggest landlords for single-family homes in the United States, had agreed to refund $48 million after deceiving renters and illegally charging junk fees.
The money from the settlement will go to tenants affected by the company's "abusive and deceptive practices," Douglas Farrar, director of the FTC's Office of Public Affairs, said in a press release.
In addition to the settlement, Invitation Homes will also be required to disclose its leasing prices and establish policies for handling security deposit refunds fairly as part of the agreement.
Invitation Homes owns or manages over 109,000 properties across the United States, as of June 30, per 8NewsNow.
The Firm's "Deceptive Practices"
One of the allegations against Invitation Homes is that it deceived renters about the condition of the properties it listed for rent. Marketing materials used by the company to promote its properties claimed that all homes it lists passed a "quality assurance inspection." The materials also promoted a "24/7 emergency maintenance" service it provides to its tenants.
However, over 33,000 tenants of Invitation Home properties submitted at least one work order within a week of moving in. The work orders were for a variety of issues, including electrical, HVAC, and plumbing.
READ NEXT: These 10 States Lead the Nation for the Most Expensive Homeowners Insurance: Report
In addition to issues with utilities, the FTC also noted that some renters complained of unclean homes, mold, rodent feces, and exposed wiring.
The FTC further noted that Invitation Homes knew about the problems. One employee reportedly called the number of resident complaints they received shortly after the tenants moved in "alarming and growing."
Illegal Fees Charged to Tenants
Apart from issues with its properties, Invitation Homes also allegedly advertised monthly rental rates that did not include mandatory fees---that the FTC called "junk fees---such as charges for rental applications, unit reservations, and pet fees. Renters were only told of the junk fees either after they were given a copy of their lease or after they signed the document.
The fees could amount to $2,000 a month. Per the FTC, Invitation Homes earned over $18 million in application fees alone.
RELATED ARTICLE: Real Estate Agent To Pay Back $7.4M After Misleading Clients in One of Australia's Largest Ponzi Schemes