Spiders, Sewage and Fees

Leasing Lifestyle – The rental home seemed so beautiful when McKayla Ferreira first laid eyes on it. The roof had three gables, fruit trees grew in the backyard, and the front porch gleamed with a fresh coat of paint.

Then Ferreira moved in.

First, she noticed water leaking through the bathroom and kitchen ceilings. Then she found a furry black mold spreading across the walls and raw sewage sluicing through the crawl space. Worst, to her, were the black widow spiders swarming her kitchen cupboards and linen closets. “Those spiders were so big you could hear them,” Ferreira said. “They sounded like fingernails scraping a table.”

Ferreira called her landlord, Invitation Homes Inc (INVH.N), a creation of private equity giant Blackstone Group LP (BX.N). The spiders were a “housekeeping issue,” the company representative told her, and she should “clean the place up.” Invitation Homes wasn’t enthusiastic about fixing the leaks, either. Two months passed before it sent someone to cut through the ceiling and fix the pipes, Ferreira said. Then the company took seven more months to patch it all up.

By the time the next tenants, Jennifer and Mike White, settled into the house on Craig Street, the spiders had been joined by colonies of roaches and ants, the couple said.

After Whitney Hurst and her family moved into the property last year, Hurst said, she immediately called in a work order for a long list of complaints, including leaky pipes, vermin and a broken garage door that nearly fell on her children. She said the repairman who showed up to fix one of the leaks told her that he didn’t have the right wrench for the job and to “have your husband fix it.”

“I have given up calling them,” Hurst said, sitting in a lawn chair in her driveway, while her two boys, ages 3 and 9, played hide-and-seek inside. “I mean, there are spiders in my kids’ toys.”

An Invitation Homes spokeswoman acknowledged that the house had some problems when Ferreira rented it, including roof and plumbing leaks and “a spider issue.” The company said it compensated Ferreira $887.30 for maintenance and utility billing issues caused by the plumbing leak, plus two weeks’ rent. It said its records show that other issues with subsequent tenants have been “minimal” – termites and a problem with the heating and cooling system – and that they were addressed.

Invitation Homes pitches itself as a singular landlord providing unprecedented ease and comfort for renters of its tens of thousands of single-family homes. But in interviews with scores of the company’s tenants in neighborhoods across the United States, the picture that emerges isn’t as much one of exceptional service as it is one of leaky pipes, vermin, toxic mold, nonfunctioning appliances and months-long waits for repairs.

Tenants also complain about excessive rent increases and fees that can add up to hundreds of dollars a year. In a proposed class-action lawsuit filed in May in the U.S. District Court for Northern California, renters accuse the company of “fee-stacking.” They allege that Invitation Homes charges tenants $95 if their rent is one minute late – even if the late payment is due to the company’s own nonfunctioning online payment portal – and then files an eviction notice to add more fees, penalties and legal costs if the tenant wants to stay in the home.

Invitation Homes filed a motion on July 20 to dismiss the case, saying the suit did not substantiate that the company’s fees were “unfair” and that the plaintiff lacked standing to assert the claims on behalf of tenants nationwide.

This is far from the alluring vision of life in a rental home that Invitation Homes has promoted since Blackstone, the world’s largest private equity firm, built the company on the wreckage of the foreclosure crisis.

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