Invitation Homes Class Action Challenges Rental Late Fees

Invitation Homes Inc. has been hit with a class action lawsuit challenging its practice of charging tenants late fees even when the rent is paid just one hour late and the company incurs no actual damage from the delay.

According to the rental late fee class action lawsuit, the rental market has changed substantially since the market crash 10 years ago caused millions of families to lose their homes through foreclosure, short sale, or surrender to a lender.

“Since then, national and global private equity firms have snatched up tens of thousands of single-family homes at hugely discounted prices (sometimes subsidized by the government and taxpayers), which they have then turned into rental properties,” the Invitation Homes class action lawsuit says.

“In short, the residential rental industry has recently undergone a massive transformation and consolidation out of the hands of small and family landlord businesses (who had direct ties to and relationships with their tenants), and into the large arms of private equity, hedge fund, and other Wall Street giants whose allegiances run solely to their investors, and whose motivations are driven purely by stock price and by showing and growing those all-important quarterly earnings.”

Plaintiff Jose Rivera says these Wall Street landlords evict their tenants at a far higher rate than other landlords of single-family homes. According to the Invitation Homes class action lawsuit, they also increase the rent for the properties, fail to do necessary maintenance, and assess illegal fees on tenants.

Rivera says the Wall Street landlords impose inflated “late” rent penalties and “penalties that stack on top of penalties that, themselves, cause a tenant to fall behind (even when they are paying their actual rent), leading to their eviction.”

According to the rental late fees class action lawsuit, publicly-traded Invitation Homes is the “largest player in this newly transformed rental market.” Rivera claims Invitation Homes charges tenants an initial fee of $95 for late rent payments, even if the payment is received just one hour past the grace period.

Rivera says he was a tenant of an Invitation Homes property in California. He claims he was subjected to the company’s allegedly illegal late rent penalty policy and was forced to pay the fees to Invitation Homes.

On at least one occasion, when Rivera attempted to pay his rent online through the company’s web portal, the web portal was not working. He contacted the company and was allegedly told not to worry about it and to keep trying. After multiple attempts to pay online were unsuccessful, he mailed in his payment, at which point it was technically “late.”

Invitation Homes reportedly returned Rivera’s check to him because the payment was late and did not include payment for the additional late fees and penalties.

According to the late rent fees class action lawsuit, Invitation Homes threatened to evict Rivera even though he paid his rent in full but failed to pay the late fees. Not wanting to be evicted from his home, he paid the $95 late fee plus $895 in “legal” fees.

Rivera claims these fees are arbitrary amounts and constitute illegal penalties. He filed the Invitation Homes class action lawsuit on behalf of himself and a proposed nationwide Class of tenants who were charged penalties or fees for paying rent that was deemed late or deficient. He also seeks to represent a California Class.

The plaintiff is represented by Craig M. Nicholas, Adam Tomasevic and Shaun Markley of Nicholas & Tomasevic LLP.

The Invitation Homes Late Fees Class Action Lawsuit is Jose Rivera v. Invitation Homes Inc., Case No. 3:18-cv-03158-JCS, in the U.S. District Court for the Northern District of California.