The Federal Trade Commission on Friday announced that Progress Residential and its owner, the private equity firm Pretium Partners, have agreed to pay $49.75 million to resolve charges that they used deceptive rental pricing practices. Arizona, Colorado, Indiana and Utah joined the FTC in bringing the case. The FTC said it is the largest enforcement matter against a landlord in the agency’s history.
According to the FTC, Progress is the largest manager of single-family rental homes in the country. It manages more than 90,000 homes in 17 states, which Pretium owns through its investment funds. The allegations are claims made in a complaint, and the companies have not been found liable by a court. The announcement did not say whether the companies admitted wrongdoing.
The complaint alleges that Progress advertised monthly rents that left out mandatory monthly fees, such as “smart home” and “utility management” charges. It also alleges that the company did not clearly disclose a fee for renters who did not provide proof of renters’ insurance. Many consumers learned of that fee only on their first bill, the FTC said. The complaint says hidden fees have cost consumers tens of millions of dollars since at least 2021.
The complaint also alleges that Progress advertised homes as “move-in ready” and inspected, but many renters found homes that needed serious maintenance, repair or cleaning. On security deposits, it alleges the company routinely kept some or all of a deposit for normal wear and tear, preexisting conditions, and repairs that were the companies’ responsibility. Progress also promised itemized deposit statements within 30 days of move-out, but many renters never got one, according to the complaint.
The FTC and the states further allege that Progress failed to answer renters in a timely way, which led to billing errors, late fees and unfulfilled repair requests. They also allege that the companies’ form contracts contained nondisparagement clauses that unlawfully barred renters from making negative comments. The complaint says most of the conduct happened under prior management and that new management has moved to fix the problems.
Under the proposed settlement, $48.5 million will go to the FTC to provide redress, meaning repayment, to harmed consumers. The other $1.25 million will be paid to the State of Arizona. The announcement did not say how consumers will apply for or receive redress, or how many will qualify.
The order would also require Progress to advertise a “true total monthly rental price,” including all mandatory recurring fees, more prominently than any other price information. Progress and Pretium would be barred from claiming homes are inspected or pass inspection before move-in unless that is true. They would have to set up a security deposit refund process with uniform withholding standards, staff training and records of home conditions.
The order would require an itemized statement of all deposit deductions and account charges within 30 days of move-out, or within the time state law requires. It would bar deductions for normal wear and tear, conditions that predate a renter’s possession, and certain renovation or capital improvement costs not tied to renter damage. It would also bar standardized nondisparagement clauses and certain unfair customer service practices.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said clear pricing lets housing providers compete on price, quality and service. He said the agency is monitoring the rental housing market.
The Commission voted 2-0 to authorize staff to file the complaint and proposed order. The FTC and states filed them in the U.S. District Court for the Northern District of Georgia. The order has the force of law once the judge approves and signs it. The FTC did not say when that might happen.