Progress Residential, one of the country's largest landlords of single-family rental homes, and its private equity owner, Pretium Partners, have agreed to pay $48.5 million to settle charges that they hid monthly fees, overcharged on security deposits and advertised homes as move-in ready when they weren't.
The Federal Trade Commission brought the case in federal court in Atlanta with Arizona, Colorado, Indiana and Utah. Under the stipulated order, the companies also owe Arizona $1.25 million in legal fees and costs, for $49.75 million in all. They neither admit nor deny the allegations. A judge still has to sign the order.
In a statement on its website, Progress said it disagrees with the FTC's claims and maintains that its practices have been "transparent, fair, and consistent with industry practice." The company said its management made changes over the past several years, including redesigning how it discloses fees and how it handles move-outs and security deposits.
Progress manages more than 90,000 rental homes in 17 states, according to the complaint.
The fees regulators say renters didn't see
The complaint says Progress advertised one monthly rent and then added mandatory fees that it revealed only after collecting an application fee of up to $55 per adult and, in many cases, a holding fee of up to $500. Regulators say renters typically paid $30 to $330 or more a month above the advertised price.
| Monthly fee named in the complaint | Amount |
|---|---|
| Smart home | $17 to $30 |
| Utility management | $7.95 to $9.99 |
| Air filters | $9.99 |
| Resident benefit package | $15 |
| Landscaping | $35 to $120 |
| Pest control | $10 |
| Pool | $100 to $175 |
| Septic tank | $40 |
Other charges in the complaint include a $125 lease administration fee at move-in, a $14.95 monthly renter's insurance exemption fee, $45 for each homeowners association notice and late fees of $125 to $150. Regulators also say the company used Photoshop on listing photos to hide dirt and broken or missing appliances. Its own internal reports, the complaint says, found tenants "are being charged more than the agreed-upon amount for rent."
What changes for renters
The order requires Progress to show the total monthly price, fees included, more prominently than any other price in its ads and listings. Mandatory fees must be disclosed before anyone commits to a home. It can no longer deduct ordinary wear and tear from security deposits. Any deduction has to be itemized and backed by records and photos.
The companies also have to stop enforcing lease terms that bar tenants from posting reviews, and to let renters dispute a charge without being blocked from paying rent.
Who gets the money
Payments start with $4.5 million within 10 days after the order is entered, then $4 million every 30 days for 11 more installments. The FTC will hold the money for consumer relief, such as refunds, and decides how to distribute it.
No claims process has been announced. Renters don't need to file anything yet. Current and former Progress tenants who want to report a problem can contact their state attorney general's office. In Indiana, the attorney general's office takes complaints at indianaconsumer.com or 1-800-382-5516.
