Invitation Homes, the largest owner of single-family homes in the Bay Area, has agreed to pay $3.72 million in civil penalties and refunds to resolve allegations that it illegally raised the rents on hundreds of homes.
The payment settles a lawsuit filed by California Attorney General Rob Bonta against the Dallas-based company, alleging it violated the tenant protection and price-gouging laws by unlawfully raising rents on some 1,900 homes between October 2019 and October 2022.
Invitation Homes owns and manages approximately 12,000 rental homes across California and more than 1,600 homes across the East Bay and North Bay, according to reporting from the San Francisco Chronicle.
Co-authored by Bonta, the California Tenant Protection Act was enacted in 2019 and included stronger provisions protecting tenants from new rent increases and evictions. Specifically, the law prohibits landlords from increasing the total rent for a unit by 5% over inflation or 10%, whichever is lower.
The state’s price-gouging laws prohibit landlords from raising the price of rental housing for an existing or prospective tenant by more than 10% of the previously charged or advertised rent in the event of a declaration of emergency.
An investigation from the Attorney General’s Office found that Invitation Homes subjected tenants to rent increases higher than those benchmarks allowed.
As part of the settlement, Invitation Homes is paying $2.04 million in civil penalties and has also pledged to refund or credit tenants the amount it collected in excess of state rent caps plus 5%, totaling more than $1.68 million.
The company is also required to restore lawful rental rates for all of its California tenants, perform quarterly audits to ensure they aren’t running afoul of regulations and correct or amend any data on late or unpaid rents to credit reporting agencies.
The company must also provide annual compliance reports on rent increases and potential violations to the state Department of Justice for the next five years.
“We are pleased to reach an expeditious and mutually favorable agreement on this matter with the California Department of Justice. We continue to stand proud of our overall business, and in this case, our transparency, timely cooperation, and active engagement with the Department,” an Invitation Homes spokesperson said in a statement.