Invitation Homes Settles California Price-Gouging Lawsuit

Invitation Homes has agreed to pay $2.04 million in civil penalties to settle a lawsuit brought by California Attorney General Rob Bonta, the California Department of Justice announced on Jan. 8.

Invitation Homes also promised to refund or credit tenants the amount it collected in excess of state rent caps, plus 5 percent interest, totaling more than $1.68 million.

The California AG’s complaint alleged that Dallas-based Invitation violated California’s price-gouging law and the California Tenant Protection Act by unlawfully increasing rents on 1,900 of the 12,000 rental homes the company owns and manages throughout California.

“These included rent increases that violated the Tenant Protection Act and rent increases over 10 percent that Invitation Homes issued following proclamations of state emergencies,” the complaint stated.

California’s price-gouging law prohibits landlords from increasing the price of rental housing by more than 10 percent during and in the aftermath of a state of emergency or local emergency.

Invitation’s violations of the Tenant Protection Act took place from October 2019 to December 2022. A stipulation for final judgment and permanent injunction noted that Invitation neither admitted or denied wrongdoing, but agreed to resolve the complaint. A State of California Department of Justice announcement said the company had identified some of the violations through its own reviews.

The five-year-old TPA law prohibits landlords from evicting tenants without just cause. It also bars landlords from raising rents for most tenants for more than 5 percent plus the percentage change in annual cost of living, over a 12-month period.

In another legal note involving Invitation Homes, the company filed a $5 million lawsuit against United Dwelling, an accessory dwelling unit startup, alleging the Culver City business “misappropriated” funds in regards to a real estate project that involved constructing ADUs.