NC corporate landlord tenants must decide: Take cash or challenge company solo?
Some North Carolinians have two weeks to decide if they’ll take part in a multi-million dollar settlement with one of the country’s biggest corporate landlords who was accused of charging excessive fees even if people paid rent just one hour late.
According to the class action lawsuit, which was filed in 2021 and settled last year, Invitation Homes often charged renters a $95 fee for a late payment and an additional “legal” fee of $75 or more.
If tenants did not pay the fees, they were threatened with eviction, the lawsuit states.
Invitation Homes settled the lawsuit in May of 2023 for $7.5 million.
Renters who accept the settlement will split $1.875 million evenly, with the rest paying attorneys and other costs, according to the agreement. Those eligible for the money have until March 24 to opt out of the agreement.
The case involves more than 10,000 renters, said Craig Nicholas, a San Diego-based attorney who represents tenants. In North Carolina, these tenants were wrongly charged fees between Jan. 14, 2017 and Nov. 29, 2023.
Nicholas expects 98% of the renters to accept the settlement agreement, he said, with some opting out because they believe that their own lawsuits could bring a higher reward.
“You just can’t charge people an exorbitant amount because they were two hours late,” Nicholas said. “The late fees they pursued were penal and designed to be revenue streams and not what they were truly intended to be under the law — compensation for any loss.”
Invitation Homes is a publicly traded company that owns, leases or manages about 80,000 homes in a dozen states, including North Carolina, according to the complaint.
A company spokesperson did not answer The Charlotte Observer’s written questions but provided a statement.
“We always believed this suit was without merit, and we settled without an admission of liability to avoid more protracted litigation,” the statement read. “We remain committed to transparent communications with our residents. The court granted preliminary approval of the settlement, and we kindly refer you to that court order for details on how the settlement will be administered.”
Late fees for on-time payments
Brian Majka is the lawsuit’s North Carolina representative.
He and his wife moved into a house owned by Invitation Homes in Concord in 2017. Over the next three years, they were charged six to 12 times with a $95 late fee — even though their payment was on time, Majka said.
“I don’t think anytime in three years my wife and I actually had a late payment,” he said. “And somehow, someway, they’d just charge you a late fee. It was a recurring issue.”
About half the time, the couple got their money back, said Majka, 33. But that was like “pulling nails,” he said.
The 2022 Charlotte Observer and News & Observer investigation Security for Sale revealed that institutional investors owned about one-quarter of all rentals in Mecklenburg County and tens of thousands of single-family houses across the state.
That year, Invitation Homes owned about 5,700 houses in North Carolina, including about 2,600 in Mecklenburg County, data showed.
Complaints against corporate landlords have increased in recent years, the newspapers’ investigation found. From 2017 to early 2022, the state attorney general and the Real Estate Commission received at least 80 consumer complaints against the institutional investors.
Of those, 15 were made against Invitation Homes.
“These giant companies just steamroll over people,” Majka said.
For more information about the settlement agreement or to opt out, email info@invitationhomessettlement.com.
News & Observer reporter Tyler Dukes contributed to this report.
