WORLDTECHProgress Residential and Pretium agree to pay $49.75 million over rental pricing claims
Progress Residential and its owner Pretium have agreed to pay $49.75 million to settle charges brought by the US Federal Trade Commission and four states over deceptive rental prices and other alleged misconduct. The FTC calls it the largest enforcement matter it has taken against a landlord.
Undisclosed fees and misleading rent figures
The complaint says Progress advertised a rent figure that left out mandatory monthly charges. According to the FTC and the states, these charges often surfaced only after a lease had been signed or the home occupied, and have cost consumers tens of millions of dollars since at least 2021.
The FTC and the states of Arizona, Colorado, Indiana and Utah also allege that Progress and Pretium charged hidden fees, did not inspect homes before residents moved in, deducted amounts from security deposits improperly and restricted negative reviews.
Condition of homes and deposit handling
Progress described its homes as move-in ready and inspected before occupancy. The complaint states that numerous consumers instead found homes in need of serious maintenance, repair or cleaning.
The regulators further allege that Progress said it would deduct from deposits only for damage beyond normal wear and tear. In practice, it allegedly withheld some or all of deposits for normal wear, for conditions that already existed and for renovations and repairs it was itself responsible for. Many consumers reportedly never received the itemised statement promised within 30 days of move-out.
Customer service and nondisparagement clauses
The complaint also says Progress did not answer consumer requests in a timely way, and sometimes not at all, which allegedly produced billing errors, unanswered repair requests and unresolved deposit disputes. The FTC and the states further allege that several form contracts contained nondisparagement provisions that unlawfully barred consumers from criticising the company.
Settlement terms and the company's position
Under the proposed settlement, Progress and Pretium will pay $48.5 million to the FTC, which will be used to compensate harmed consumers, and $1.25 million to the State of Arizona. The complaint says most of the conduct took place under previous management and that new management has moved to fix the problems.
Pretium founded Progress and wholly owns it. Progress describes itself as the largest property manager of single-family rental homes in the country, managing more than 90,000 homes across 17 states that Pretium owns through its investment funds.
Open questions
- How much of the $48.5 million will reach individual consumers, and how will they be identified?
- Will the settlement terms, once approved by the court, change how the companies handle deposits and fees?