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Private equity-owned landlord to pay $49.8 million over hidden fees

By Reuters News

By Jody Godoy

Nov 6 (Reuters) - Progress Residential, the biggest US manager of single family rental homes, will pay $49.8 million to settle allegations by the Federal Trade Commission and four states that it deceived renters with hidden fees, an FTC official told Reuters on Friday.

The action builds on the FTC's work tackling corporate cost of living issues, as it explores requiring landlords to list mandatory fees and charges upfront as part of advertised rental rates.

Progress violated the law with charges, such as smart home fees or fees for lack of renters' insurance, that were not included in advertised rental rates, the FTC official said.

Roughly 35% of Americans rent their homes. According to a survey by Zillow, 60% of renters paid a recurring fee on top of rent last year.

Progress also routinely failed to return renters' security deposits and advertised homes as "move-in ready" that were in need of serious cleaning or repairs, the official said.

The FTC is receiving $48.5 million, which it will use to reimburse harmed consumers, and Arizona is receiving $1.25 million, the official said. Colorado, Indiana, and Utah were also expected to join the settlement.

Progress is a subsidiary of Pretium, a real-estate focused investment firm that owns and manages more than 82,000 rental homes across the US.

The company founded by former Goldman Sachs executive Don Mullen has said it aims to become one of the biggest homebuilding lenders by 2027.

Invitation Homes INVH.N, another owner of single family rental homes launched in the wake of the subprime mortgage crisis, agreed to pay $48 million to settle an FTC action over hidden fees in 2024.

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