The investment company holding the most single-family homes in the United States, Invitations Homes Inc., has received negative press and is now being accused of improper maintenance with its rentals. The fallout could include a class action lawsuit and according to Reuters, issues include plumbing problems, leaks, and spider infestations. While Invitation Homes responded to the report with documentation showing the company had resolved the issues, tenants reacted to that documentation with allegations that the issues were “patched, not fixed” and that the company claims to have completed work that is not completed.

An Issue of Scale

To a degree, it is something of a mystery how the two parties could be on completely different pages about maintenance and repairs. Critics of “Wall Street” institutions entering the rental market say the companies are unable to meet maintenance demands. They need to keep those costs to a minimum in order to meet obligations to the pension funds and other institutions to sustain their portfolio growth. Others suggest institutional investors are simply not equipped to maintain the portfolios they have purchased. Invitation Homes, for example, manages 82,000 properties in 17 metro areas.

Invitation Homes COO Charles Young spoke out against the negative press and pointed out to Reuters that there are two sides to every story. “We are providing a housing option that didn’t exist before [good homes in good school districts where his renters probably could not afford to buy].” He added that his company’s investments have “helped foreclosure-ravaged neighborhoods recover” and noted, “70 percent of tenants renew their leases.” Detractors say the tenants renew because the company controls up to 25% of the inventory in some local markets and residents do not have any other option.

The Proposed Lawsuit

In California, some of the company’s tenants have filed a proposed class-action lawsuit in which they accuse Invitation Homes of “fee stacking.” They claim there are fees “if their rent is even one minute late.” They allege that the fees are designed to make it expensive to remain in the home and that eviction notices are filed too quickly. Invitation Homes filed a motion to dismiss the case in mid-July, stating that the plaintiffs did not have the standing to make their claims on behalf of tenants nationwide.

In the event that the class action suit moves forward, it may set a precedent for other cases against smaller landlords.

Categories | Article | Market & Trends
Tags |
  • Carole VanSickle Ellis

    Carole VanSickle Ellis serves as the news editor and COO of Self-Directed Investor (SDI) Society, a membership organization dedicated to the needs of self-directed investors interested in alternative investment vehicles, including real estate. Learn more at or reach Carole directly by emailing

Related Posts


Submit a Comment