The Better Business Bureau
Since 2016, more than 600 complaints have been filed against Invitation Homes with the Better Business Bureau.
On March 19, 2019, BBB contacted Invitation Homes to notify that a twelve-month follow-up review of consumer complaints filed against the business was conducted in order to determine if the steps taken during their monitoring period have sufficiently addressed the identified concerns detailed in BBB’s original correspondence.
Specifically, BBB originally identified multiple patterns alleging that Invitation Homes does not provide a timely response to fix damages when a tenant has brought it to their attention.
Our most recent review of consumer complaints has determined that, as of March 2019, the pattern of complaints remains, and that Invitation Homes has failed to sufficiently reduce or eliminate the identified pattern.
By the way, the BBB gave Invitation Homes a C+.
Massachusetts Senator and former Presidential Candidate, Elizabeth Warren
Senator Warren called out Blackstone Group Inc. for its real estate practices as she laid out her tenants’ rights plan, accusing the company of “shamelessly” profiting from the 2008 housing crisis.
And shamelessly, some of the same Wall Street firms that tanked the dream of homeownership for millions of American families are now the country’s biggest landlords profiting off the destruction they caused. In the wake of the 2008 crisis, private equity firms like Blackstone went on a shopping spree, snatching up single-family homes that had been foreclosed.
The United Nations
In a UN letter to the CEO of Blackstone, Mr. Schwarzman, the UN made aware of their principle concerns with respect to Blackstone’s engagement in residential real estate, from the prospective of human rights. In the UN report directed to Blackstone’s CEO, Mr. Schwarzman, it was noted:
- They reported that Invitation Homes through an automated system is quick to threaten eviction or file eviction notices due to late payment of rent or late payment of fees ($95- per incident), no matter the circumstances. If in the following month the tenant can pay their rent but not the additional charge, the tenant may be evicted for partial payment of rent. When tenants choose to challenge the eviction with Invitation Homes, they incur additional fees and penalties.
- In Charlotte, North Carolina, for example, it was found that in 2013 Invitation Homes filed eviction proceedings against 10 percent of its renters, compared to other investor housing providers, such as Camden Property Trust, with a rate of 2.5 % over the same period. The high rate of evictions is noted to be a direct result of the securitized bond model of real estate investment that is operated by Invitation Homes, and which requires the company to maintain a 94 percent paying occupancy rate across its properties in order to satisfy investors.
- Blackstone and its subsidiaries’ business model are pushing low-income and increasingly middle-income people from their homes. Blackstone’s practices, as noted above, have abruptly increased the rental payments of SFRs, making them unaffordable for millions of the existing residents. They have decreased the availability and affordability of social housing and have undertaken aggressive evictions to protect rental income streams to satisfy investors.
- Evictions which result in homelessness are a violation of the right to housing under international human rights law.
- In turn, we draw your attention to the fact that a number of your policies and measures are inconsistent with international human rights law and norms. The threat of eviction creates fear, anxiety and housing insecurity, inconsistent with requirements of the right to housing. Evictions which result in homelessness are a violation of the right to housing under international human rights law. Furthermore, access to affordable housing with affordability defined by level of household income, not what the market can bear, is a cornerstone obligation of the right to adequate housing under international human rights law. International human rights law also imposes a positive obligation to ensure access to affordable housing for the most vulnerable populations. Furthermore, housing policies that may be neutral on their face must not have a discriminatory effect.
In California, a recent survey of tenants in Los Angeles County suggests that evictions by large single-family rental companies are common. Over a fifteen-day period, an MIT researcher visited over 300 homes and found four notices of eviction, including two court orders and two notices to pay or quit. At one home in the San Fernando Valley, Invitation Homes had posted a large “Keep Out” sign next to a “Pay or Quit Notice,” while covering the home in caution tape and placing a large construction cone in front of the door. Marking a home in this dramatic way may be a tactic used by such companies to shame or humiliate tenants.
Because of securitizations, companies like Invitation Homes, have to deal with Rating agencies and investors who often pressure these companies into adopting strict eviction practices. According to Kroll Bond Rating Agency, “delinquent tenants should generally be contacted immediately following missed payment dates, and it is expected that the eviction process will begin shortly thereafter… KBRA will evaluate eviction strategies to determine whether adequate controls are in place to ensure compliance with local laws while providing for the timely removal of tenants.” If a company is unable to “remove” tenants in a “timely manner” and lacks a “detailed eviction plan,” KBRA threatens to increase the loss assumptions in its risk model, which can result in a lower rating. The constant monitoring of rental rates, late payments, and “concessions” to tenants prevents local staff from negotiating with residents and forces them to initiate eviction processes.
According to a letter by the UN to the United States mentions Invitation Homes throughout the report. All of these acts and omissions are disproportionately affecting African American households, and other minority groups contrary to the United States of America’s obligations under the Convention on the Elimination of All Forms of Racial Discrimination (CERD). CERD requires States to guarantee the right of everyone, without distinction as to race, color, or national or ethnic origin, to equality before the law, economic and social rights including the right to housing. Corporate landlords, like Invitation Homes, are concentrating their property acquisitions in neighborhoods of color. In California and Fulton Georgia, for example, the highest levels of investments by private equity firms like Invitation Homes were in communities that were over 70% African American. Neighborhoods that have a higher concentration of African Americans have a higher rate of tenants receiving eviction notices.
Capitol Forum is a source used by many influential people such as Karl A. Racine, D.C. Attorney General.
According to the Capitol Forum, Invitation Homes Tenants Say Rental Homes Poorly Maintained, Violate Habitability Standards and Local Housing Codes, Company Deaf to Concerns
- Tenants who lease houses from Invitation Homes, a leader in the single-family rental industry, are deceptively put into dwellings with maintenance issues, code violations and life-threatening safety risks, according to interviews with twenty current and former tenants and complaints filed with attorney generals in two states. The company additionally has failed to make requested repairs and signaled to residents that they may be held liable for fix-up costs when they move out, the tenants said.
- Twenty Invitation Homes tenants with complaints against the company including two military families were interviewed for this article. Other tenant complaints submitted to the attorney general of Florida and North Carolina, to the Better Business Bureau, and on social media platforms detail similar conduct by the company.
- The company runs a variety of risks by providing tenants with problem homes. Complaints from residents may trigger scrutiny by local code inspectors, neighborhood homeowner associations and state attorney generals and real estate commissions. Monetary and legal settlements with tenants are also a possibility, along with early lease terminations and an inability to shift maintenance, repair and turnover costs to tenants.
- When Invitation Homes acquire properties in bulk, the company often does not inspect the interior or conduct more than a brief exterior inspection, and major defects in the properties may be overlooked, according to its 2016 10-K. After acquiring a home, the company may prioritize curb appeal and interior aesthetics over function and safety, intentionally delaying maintenance and repairs in order to execute business practices such as chargebacks that shift expenses to tenants.
- “The day after we signed the lease and moved into the home, we reported a problem with the AC because it was not blowing cold air,” Ashley Seal, a pregnant mother of two young children, wrote to the Florida attorney general in May 2017. Her complaint indicated her active duty military family was living in a Pasco County, Florida Waypoint Homes (merged with Invitation homes 2017) rental home.
Seal’s complaint states that multiple technicians and contractors recommended replacing the failed, 25-year old cooling system but Waypoint refused to move on the request. Over the next three-and-a-half months, the family dealt with ineffective repairs, unreturned calls and frustrating delays. “They are putting a Band-Aid on the problem but not fixing it. At this point I want out of the lease with this company. They are a horrible company,” she said.