One of Las Vegas’ largest landlords agrees to $48M fine for deceptive practices

Invitation Homes, one of the largest owners of single-family rental homes in the Las Vegas Valley, has agreed to pay $48 million to settle claims by the Federal Trade Commission that it reaped millions of dollars via deceptive business practices, including forcing tenants to pay undisclosed fees on top of their monthly rent.

Under the terms of the proposed settlement, Invitation Homes, which owns about 3,500 rental properties in the valley, also agreed to ensure it is clearly disclosing its leasing prices, establish procedures to handle tenant security-deposit refunds fairly and cease other unlawful practices, the FTC said Tuesday. The company is the largest owner of single-family rental homes in the U.S.

U.S. Rep. Dina Titus, D-Nevada, said in a statement that the proposed settlement order is a good sign for Las Vegas residents feeling the pinch of the area’s housing crisis.

“The FTC took a major step in addressing deceptive rental practices in Southern Nevada which have contributed to skyrocketing rental costs,” she said. “The FTC action requires Invitation Homes to make refunds to consumers and sends a strong message that rent gouging will not be tolerated.”

A Las Vegas Review-Journal investigation found that Invitation Homes was part of the largest single residential real estate transcation in history when it bought 264 Clark County homes from Miami-based investment firm Starwood Capital Group last year.

The deal, made in three separate transactions, closed on July 18, property records show. The largest sale was $57.5 million for 155 homes, the second was $26.3 million for 70 homes and the third was $14.1 million for 39.

The majority of the homes sold are in the city of Las Vegas (94), followed by the city of North Las Vegas with 77. The price range for each home ranged from around $292,000 to $694,000, with the average price at $371,514.

The sale was part of a much larger deal between Starwood Capital and Invitation Homes, a $650 million swap for a portfolio of close to 1,900 single-family rental homes, with the majority being in the Sun Belt, including in Texas, Florida, Phoenix, Las Vegas and Los Angeles.

Invitation Homes admits no wrongdoing in complaint

In the complaint, filed in federal court in Atlanta, the FTC claims that the Dallas-based company used “deceptive advertising and unfair practices” to charge millions of dollars in bogus fees that harmed tens of thousands of people.

These mandatory fees, charged for internet packages, air-filter delivery and other services, were not disclosed in the monthly rental rates that Invitation Homes advertised, the FTC claims.

All told, the company charged consumers tens of millions of dollars in junk fees as part of their monthly rental payments between 2021 and June 2023, the FTC alleges.

The agency also claims that Invitation Homes “systematically withheld” tenants’ security deposits after they moved out, unfairly charging them for normal wear-and-tear, and used “unfair eviction practices,” including starting eviction proceedings against renters who had already moved out.

The funds from the settlement, which is subject to approval by a federal judge, would go toward customer refunds.

In a statement, Invitation Homes touted its disclosures and practices and noted that the proposed settlement “contains no admission of wrongdoing.”

As of June 30, the company owned or managed more than 109,000 homes across the U.S.

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com. The Associated Press contributed to this report.