Progress Residential Pays $49.75 Million in FTC Settlement

Why is Progress Residential paying $49.75 million?

Progress Residential, the largest property manager of single-family rental homes in the U.S., will pay $49.75 million to settle charges brought by the Federal Trade Commission (FTC) and four states over alleged deceptive practices. The case concerns rental fees, security deposits, property listings and tenant service.

The settlement resolves allegations about Progress Residential’s rental practices without an admission of wrongdoing.

Progress Residential is owned by private equity firm Pretium Partners. The FTC accused the company of deceptive practices since 2021, including charging hidden fees, making billing errors and failing to properly clean homes before renters moved in.

What rental listing practices did the FTC challenge?

The FTC complaint alleged that Progress Residential used Photoshop to make rental properties appear ready for occupancy. Internal company guidelines reportedly instructed employees and vendors to digitally remove dirt and other defects from listing photos and to insert appliances that were missing from properties.

The FTC alleged that altered listing photos misrepresented the condition and contents of rental homes.

The FTC also alleged that the company deducted amounts from security deposits for basic wear and tear, prohibited negative reviews and failed to provide adequate customer service.

Which rental fees were not included in advertised prices?

The FTC said some junk fees, including smart home fees and utility management fees, were added after they were omitted from the advertised rental price. The agency also alleged that the company charged one-time and situational fees.

The FTC alleged that some mandatory and situational rental fees were disclosed only after tenants had committed to renting.

One example was a renter’s insurance exemption fee for tenants who did not provide proof of renters’ insurance. According to the FTC, tenants often discovered the fee only after receiving their first monthly bill.

How were renters’ security deposits handled?

Progress Residential represented that it would deduct money from renters’ security deposits only for damage beyond normal wear and tear. The FTC alleged that the company routinely withheld some or all of deposits for normal wear and tear, preexisting conditions, renovations and repairs that were the company’s responsibility.

The FTC alleged that Progress Residential withheld deposits for costs that were not tenants’ responsibility.

The FTC also said that Progress Residential promised to send itemized statements of deposit charges within 30 days of move-out, but that many consumers did not receive statements.

What changes does the proposed settlement require?

Under the proposed settlement, Progress Residential must prominently advertise rental prices that include all mandatory recurring fees. The company must also standardize its security deposit process, provide itemized explanations of deductions and stop misrepresenting whether homes were inspected before tenants moved in.

The proposed settlement requires clearer rental prices, standardized deposit procedures and accurate statements about home inspections.

• Advertised prices: Include all mandatory recurring fees.
• Deposit process: Use standardized procedures and itemize deductions.
• Inspection claims: Stop misrepresenting whether rental homes have been inspected before move-in.

These requirements address three parts of the renter experience: understanding the full monthly price, reviewing deposit deductions and knowing whether a property was inspected.

Where does Progress Residential operate, and what does it say?

Headquartered in Scottsdale, Arizona, Progress Residential manages over 90,000 rental homes across 17 states. Its properties are owned primarily by parent company Pretium Partners through various investment funds.

Progress Residential manages over 90,000 homes in 17 states, while its properties are primarily owned by Pretium Partners.

A company spokesperson said by email that the agreement with the FTC contains no admission of wrongdoing. The spokesperson said the company believes its practices “have been transparent, fair, and consistent with industry practice.”

The company said it disagrees with the FTC’s claims and views the settlement as a way to move forward.

“Although we disagree with the FTC’s claims, this resolution allows us to move forward with our mission of expanding access to quality, affordable rental housing in neighborhoods of opportunity,” the spokesperson said.

What did the FTC allege about rental fees?

The FTC alleged that Progress Residential added fees, including smart home and utility management fees, after leaving them out of advertised rental prices. It also said tenants often learned about the renter’s insurance exemption fee on their first monthly bill.

What does the proposed settlement require for security deposits?

The proposed settlement requires Progress Residential to standardize its deposit process and provide itemized explanations of deductions. The FTC’s complaint also alleged that many renters did not receive promised statements within 30 days of moving out.

Did Progress Residential admit wrongdoing?

No. A company spokesperson said the agreement contains no admission of wrongdoing and said Progress Residential disagrees with the FTC’s claims.