By 2022, large investors were buying more than one in every four single family homes sold in the US. The absolute largest companies really is. There are two. The first is Invitation Homes, which is a publicly traded real estate investment trust. Their business model is built on exploitation and on having a very uneven [00:00:19] playing field tilted in their favor. Finally, one corporate landlord that has helped kill America's dreams of owning a home. And they also screwed over. Renters, is facing the music thanks to Lina Khan [00:00:36] and the Federal Trade Commission. Now, this is an important story because this is what we should have the Federal Trade Commission focusing its energy on, especially since we're still dealing and grappling with a housing crisis, and the people who have taken full advantage of that [00:00:54] and partially contributed to that crisis, are these private equity firms who buy up residential real estate and then rent that real estate out, thus limiting the inventory of homes for Americans to buy and cornering the market as the largest corporate slumlords. [00:01:12] Now, the Federal Trade Commission on Tuesday announced a $48 million settlement with Invitation Homes, the largest landlord of single family homes in the United States, for an array of unlawful actions against consumers. Now, the company owns some 85,000 houses [00:01:31] nationwide and manages thousands more. And according to the FTC, invitation homes engaged in deceptive business practices. Those actions include deceiving renters about lease costs, charging undisclosed junk fees, [00:01:48] failing to inspect homes before residents moved in, and unfairly withholding tenants security deposits when they moved out. The company advertised rentals at prices that did not include those extra fees, including fees for mandatory smart home features and air filters, [00:02:07] and added up to that, added up to an extra $1,700 a year or more for some tenants, the FTC said. Hey, don't scroll away, come back, come back because before the video continues, we just want to urge you to lend your support to TYT. [00:02:24] You power our honest reporting. You do it at tyt.com/team and we love you for it. We shouldn't be surprised that this has been going on right? They are looking at this whole model this private equity firm Blackstone [00:02:40] which is behind Invitation Homes. The whole point of this is to corner the rental market and to make profit for what? For the clients in this private equity firm. Right. They are investing their money and expecting a return. [00:02:56] You're not going to make giant profits by being the kind of landlord who's really looking out for the best interests of your tenants, but let me continue. So as I mentioned, those fees that they were charging the tenants added up to a lot of money. And so an Invitation Homes employee explained that this is how we get upset [00:03:18] residents, but also make the numbers the chief financial officer communicate communicated investors need to see. So it's part of their profit model. They made deceptive claims about the condition of the properties [00:03:34] that it listed for rent, and they also failed to respond to maintenance requests, something that we've covered on this show. We've done stories where we've shown videos of tenants dealing with black mold. You can see the black mold on the ceilings. They provided evidence, documentation that they reached out to their landlord over [00:03:53] and over again and did not get a response. No one showed up to Do something about the black mold, which is going to cause all sorts of health issues. Marketing, a worry free leasing lifestyle and promising pre-inspected homes before move in and 24 over seven maintenance. [00:04:11] New residents instead faced issues like sewage backup, broken appliances and visible rodent feces. Larissa Bungo, a senior attorney at the FTC, wrote. Additionally, Invitation Homes got involved [00:04:27] in all sorts of other bad behavior. They punished renters for normal wear and tear or damages that had existed even before the tenants had moved in. Amazing. They also tried to prevent its tenants from filing declarations of hardship [00:04:43] to protect themselves from eviction. You know, during the pandemic, when we were supposed to have a moratorium on evictions. In fact, I remember covering a story about how, you know, small landlords had to follow suit with the moratoriums, right? [00:04:58] They don't have the kind of resources these private equity firms have to defend themselves. But the private equity firms were evicting people left and right during the pandemic while the moratorium was in place. How is that fair? So on they. [00:05:14] Okay, so on top of the $48 million settlement that they're agreeing to pay, the settlement also requires invitation homes to clearly disclose its leasing prices, establish policies and procedures to handle security deposit refunds fairly, and stop other unlawful behavior. [00:05:30] Now, what is the other unlawful behavior? You know, things like refusing to refund the tenant their security deposit when they move out, stuff like that. The agreement still has to be approved, by the way, by by a federal judge before it can go into effect. [00:05:45] Invitation homes also said in a statement that its agreement with the Federal Trade Commission doesn't mean that they're admitting to any wrongdoing. No, not at all. They're not You know, I too like to pay a 40. What was it? $48 million settlement? [00:06:03] When I'm accused of doing wrongdoing, just to show that I did not engage in the wrongdoing. That's. That's usually what people do. Now, Invitation Homes again says that they didn't do anything wrong. And while it's good that they're actually facing some punishment for once, [00:06:19] well, is it really going to hurt them? Because $48 million is a lot of money to us. But is it enough money to stop Invitation Homes from engaging in the practices that they were caught engaging in? Is it going to stop them from abusing their tenants? [00:06:35] Is it going to cause them to actually respond to their tenants when they're complaining about things like sewage backup or, you know, black mold in their unit or in their home? It depends. It depends what kind of profits are being made by treating tenants this way. [00:06:52] And if you do a cost benefit analysis, maybe that $48 million settlement is way lower than the amount of profits invitation homes can make by being negligent in the way that they treat their tenants, or by pocketing the money that tenants have paid in their security deposits, [00:07:09] which is supposed to be refunded when they move out. So we'll see how it plays out. But this does feel a lot like what we've seen in the past with other corporations that were made to pay settlements after they were caught abusing clients [00:07:25] or customers or tenants. Usually they'll go right back to doing what they were doing previously, because unless you're throwing people in jail, a fine or a fee or a $48 million settlement is not going to be enough [00:07:41] to persuade them to maybe stop doing what they've been doing. You have to actually attack the ability for them to make the kinds of profits they're making through the bad behavior, paying a quick. It's like a parking ticket, like you're going to probably park illegally again [00:07:59] in the future, because a parking ticket is not going to end your life. It's not going to crush you. $48 million settlement for invitation homes. Probably not going to crush them, but I do commend the FTC for actually looking out for the American people. [00:08:14] It's been a while since that's happened, and it's good to see it. Obviously, it's all being done under the leadership of Lina Khan, who's got a target on her back. With all of these billionaire donors funding Kamala Harris's campaign to ensure that she rids her administration of Lina Khan. [00:08:31] Hopefully she doesn't do that, but we'll see how it plays out. Thanks for watching the video, guys. We also love it if you hit the join button below, because that makes you a member. 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