Pretium Partners and its subsidiary Progress Residential will pay $49.7M to settle charges from the Federal Trade Commission and four states that the companies misled customers with deceptive rental pricing practices.
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The complaint says Pretium and Progress, which manages more than 90,000 single-family rentals across 17 states, advertised false rental prices, charged hidden fees, failed to inspect homes ahead of move-ins, improperly deducted amounts from security deposits, and restricted negative reviews.
It says that since 2021, these hidden fees have cost renters tens of millions of dollars.
The FTC, which brought the charges alongside Arizona, Colorado, Indiana and Utah, billed the move as the largest enforcement matter taken against a landlord in its history.
"The agreement contains no admission of wrongdoing, and we maintain Progress’ practices have been transparent, fair, and consistent with industry practice," Progress said in a release. "Although we disagree with the FTC’s claims, this resolution allows us to move forward with our mission of expanding access to quality, affordable rental housing in neighborhoods of opportunity."
Pretium has $70B in total assets under management, including $32B in real estate equity and $6B in real estate debt. It also has $29B in residential credit.
As part of the settlement, the companies will be required to advertise a monthly rental price inclusive of all mandatory recurring fees. They will also be required to establish a security deposit refund process and are prohibited from misrepresenting homes' inspection status prior to move-ins.
"The FTC is monitoring the rental housing market and will continue to take action where appropriate to ensure that consumers receive clear and accurate information about the costs of renting a home," Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in a statement.
The settlement comes as the federal government cracks down on large institutional investors' ownership of single-family homes.
The 21st Century Road to Housing Act became law earlier this summer with bipartisan support and capped the number of homes an investor can own at 350 in some instances. The final bill excluded controversial rules on build-to-rent projects that had worried commercial real estate investors.
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