A deal with a regulator shone a light on some ugly allegations in the company’s conduct with tenants.
Invitation Homes (INVH -2.60%) is getting ready to raid its coffers in order to satisfy the terms of a new settlement with a regulator, and it’s clear investors aren’t all that happy with it. On news of the agreement with the U.S. Federal Trade Commission (FTC) over alleged wrongdoing by the company, Invitation Homes’s share price fell to close the day 2.6% lower. Meanwhile, the trading session saw the basket of stocks that comprise the S&P 500 index collectively rise slightly, by 0.3%.
A $48 million settlement
The FTC had accused Invitation Homes, the country’s top institutional landlord for single-family homes, of a range of misdeeds. The federal agency found that the company deceived customers about lease costs, did not inspect residences prior to the arrival of new tenants, charged “junk fees” that it failed to disclose, and unfairly retained security deposits after tenants departed.
The regulator and the company announced in separate press releases Tuesday that they had reached a $48 million settlement in the matter. These monies will be used to refund consumers that were allegedly harmed by the company’s practices.
Additionally, Invitation Homes has agreed to clearly detail its leasing prices and manage tenant security deposits properly, among other remedial measures.
No admission of wrongdoing
In its tersely worded press release, Invitation Homes stressed that the settlement contains no admission of wrongdoing by the company. It wrote, “Today’s agreement brings the FTC’s three-year investigation to a close and puts this matter behind the company, which will, as always, move forward with its continuous efforts to better serve its customers and enhance its practices.”
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Invitation Homes. The Motley Fool has a disclosure policy.