Key Takeaways
- • Progress Residential, the largest single-family rental property manager in the U.S., agreed to pay $49.75 million to settle FTC and four state charges of deceptive practices, according to the FTC press release.
- • The FTC alleges the company, owned by private equity firm Pretium Partners, used undisclosed "smart home" and "utility management" fees, one-time situational fees, and misleading Photoshopped listing photos since 2021.
- • The settlement requires Progress to advertise rental prices including all mandatory recurring fees, standardize security deposit handling, provide itemized deduction statements, and stop misrepresenting pre-move-in inspections.
- • Progress manages over 90,000 rental homes across 17 states, mostly owned by Pretium Partners' investment funds, and denies wrongdoing, stating the agreement contains no admission of liability.
Summary
Progress Residential, headquartered in Scottsdale, Arizona, will pay $49.75 million to resolve charges brought by the Federal Trade Commission and four states, according to a press release from the federal agency. The company, the largest property manager of single-family rental homes in the U.S., is owned by private equity firm Pretium Partners. The FTC accused it of several deceptive practices dating to 2021, including hidden fees, billing errors, and failing to properly clean homes before tenants moved in.
According to the FTC's complaint, the company maintained an internal policy of using Photoshop to make rental properties appear ready for occupancy. Guidelines instructed employees and vendors to digitally remove dirt and defects from listing photos and insert appliances that were missing from properties. The agency also alleges that "smart home" and "utility management" fees were added after they had not been disclosed in advertised rental prices, and that a "renter's insurance exemption fee" was often discovered only after a tenant received the first monthly bill. The FTC said the company "unfairly charged a myriad of one-time and situational fees."
The FTC further alleges that Progress withheld portions of security deposits for normal wear and tear, preexisting conditions, and repairs that were the company's responsibility, despite promising to deduct only for damage beyond normal wear. Quoting the agency, the FTC said many consumers never received the itemized statements the company promised within 30 days of move-out. Contracts also contained nondisparagement provisions that the FTC says barred renters from posting negative reviews, and the agency alleges inadequate customer service.
Under the proposed settlement, Progress must prominently advertise rental prices that include all mandatory recurring fees, standardize its security deposit process, provide itemized explanations of deductions, and stop misrepresenting whether homes were inspected before move-in. The company manages more than 90,000 homes across 17 states, primarily owned by Pretium Partners through its investment funds. A company spokesperson told the publication that the agreement contains no admission of wrongdoing and that the company believes its practices "have been transparent, fair, and consistent with industry practice," adding that the company disagrees with the FTC's claims but views the resolution as a way to continue its mission of expanding access to affordable rental housing.
According to the FTC's complaint, the company maintained an internal policy of using Photoshop to make rental properties appear ready for occupancy. Guidelines instructed employees and vendors to digitally remove dirt and defects from listing photos and insert appliances that were missing from properties. The agency also alleges that "smart home" and "utility management" fees were added after they had not been disclosed in advertised rental prices, and that a "renter's insurance exemption fee" was often discovered only after a tenant received the first monthly bill. The FTC said the company "unfairly charged a myriad of one-time and situational fees."
The FTC further alleges that Progress withheld portions of security deposits for normal wear and tear, preexisting conditions, and repairs that were the company's responsibility, despite promising to deduct only for damage beyond normal wear. Quoting the agency, the FTC said many consumers never received the itemized statements the company promised within 30 days of move-out. Contracts also contained nondisparagement provisions that the FTC says barred renters from posting negative reviews, and the agency alleges inadequate customer service.
Under the proposed settlement, Progress must prominently advertise rental prices that include all mandatory recurring fees, standardize its security deposit process, provide itemized explanations of deductions, and stop misrepresenting whether homes were inspected before move-in. The company manages more than 90,000 homes across 17 states, primarily owned by Pretium Partners through its investment funds. A company spokesperson told the publication that the agreement contains no admission of wrongdoing and that the company believes its practices "have been transparent, fair, and consistent with industry practice," adding that the company disagrees with the FTC's claims but views the resolution as a way to continue its mission of expanding access to affordable rental housing.
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