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

Progress ​Residential, the biggest US manager of ‌single-family rental ​homes, agreed on Friday to pay $49.8 million to settle allegations by the Federal Trade Commission and four states that it deceived renters with ‌hidden fees. 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 and Pretium, its private equity owner, 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 said. A Progress spokesperson said the company's practices have been transparent, fair and consistent with industry practice, adding that Progress did not admit to any wrongdoing as part of the settlement and disagrees with the FTC's ⁠claims.

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 FTC said.

Progress and Pretium executives received reports from 2022 through 2024 about renter complaints ⁠about the issues but prioritized profit, according to the complaint. The FTC is receiving $48.5 million, which it will use to reimburse harmed consumers, ⁠and ​Arizona is receiving $1.25 million, according to court documents. Colorado, Indiana, and Utah also joined 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, 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.