FTC to send $47 million back to renters — see who qualifies for payments

Hundreds of thousands of renters across the United States are set to receive compensation after a major settlement involving one of the nation’s largest single-family home landlords. The Federal Trade Commission says the payout comes after allegations that renters were misled about costs and faced unfair charges.

The agreement follows a lawsuit filed by the agency that accused the company of deceptive leasing practices and excessive fees. Now, affected tenants could soon receive checks as part of the settlement.

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What accusations did the FTC make against Invitation Homes?

The Federal Trade Commission filed a lawsuit in September 2024 accusing Invitation Homes of a range of deceptive practices involving renters.

According to the complaint, the company allegedly misled applicants about the true cost of leasing homes. The agency said renters were sometimes charged additional fees that were not clearly disclosed in advance.

Among those charges were fees tied to services such as “smart home technology” and “utility management.” The lawsuit also alleged that renters were charged unfair amounts when they moved out.

The FTC claimed that tenants were sometimes billed for damage that occurred before they moved in, for normal wear and tear or for renovation work unrelated to their tenancy.

Security deposits were another focus of the complaint. The lawsuit stated that the company returned only 39.2% of security deposit dollars between 2020 and 2022. By comparison, the national average return rate was reported to be 63.9%.

Some renters also faced what the FTC described as mandatory junk fees that could add up to $1,700 per year.

The lawsuit further alleged that prospective tenants paid non-refundable reservation and application fees ranging from $55 to $500. Application fees alone reportedly generated $18 million for the company between 2019 and 2024, as per a report by USA Today.

Investigators also accused the landlord of misleading tenants about pre-move-in inspections while leaving some renters to deal with significant disrepair.

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How many renters will receive settlement payments?

The settlement announced by the FTC includes a compensation fund worth $47.2 million.

As part of the agreement, checks will be distributed to 444,131 consumers who were affected by the company’s practices.

The payments stem from the broader settlement, which totals about $48 million and also requires the company to change several of its policies, as per a report by USA Today.

Those changes include providing clearer disclosure of leasing prices and introducing a new system designed to ensure security deposits are refunded fairly.

The FTC has said the action is part of a broader effort to protect renters from unlawful business practices in the housing market.

"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," then-FTC Chair Lina M. Khan said in a September 2024 statement, as per a report by USA Today.

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Who qualifies for compensation in the FTC payout?

Not every renter will receive a payment from the settlement. According to the FTC, eligible consumers must have paid Invitation Homes at least $45 in covered fees or charges between January 2021 and September 2024.

Additionally, those consumers must not have already received a credit or refund from the company for those charges.

Checks will be mailed directly to qualifying individuals. Recipients are advised to cash their checks within 90 days, as per a report by USA Today.

Consumers with questions about the settlement can contact the refund administrator, Rust Consulting, Inc., for further assistance.

The payments mark the latest development in the case as regulators continue examining alleged unfair practices in the rental housing market.

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FAQs

Who will receive money from the FTC settlement?
More than 444,000 renters who paid certain fees to Invitation Homes between 2021 and 2024 may receive checks.

How long do recipients have to cash their checks?
Eligible consumers must cash their checks within 90 days.