Progress Residential, the single-family rental home property manager in the United States, has agreed to pay $49.75 million to settle accusations brought by the Federal Trade Commission and four states. Headquartered in Scottsdale, Arizona, the company manages over 90,000 rental homes across 17 states. These residential properties are owned primarily by its parent company, private equity firm Pretium Partners, through multiple investment funds. Federal regulators launched investigations into the company's operations stemming from activities dating back to 2021, uncovering widespread patterns of hidden costs, billing errors, and misleading marketing tactics.
According to the official FTC complaint, the property manager routinely deployed digital editing software to make unready rental properties appear prepared for incoming tenants. Internal company guidelines instructed employees and external vendors to actively use Photoshop to digitally erase dirt, grime, and other structural defects from online listing photographs. In certain documented instances, the company digitally inserted missing kitchen appliances directly into photographs before advertising the homes online. Regulators also noted that the firm failed to adequately clean properties prior to move-in dates and misrepresented whether rental units had undergone proper inspections.
Key takeaways
- Progress Residential agreed to pay $49.75 million to settle FTC and multi-state charges.
- The company was accused of using Photoshop to digitally alter listing photos and insert missing appliances.
- Mandatory recurring fees, such as smart home and utility management costs, were omitted from advertised prices.
- The proposed settlement mandates transparent advertised pricing and standardized security deposit procedures.
Hidden Fees and Security Deposit Violations
Beyond digital photo manipulation, renters frequently encountered unexpected financial burdens after signing their lease agreements. The federal complaint highlights that Progress Residential tacked on mandatory recurring costs, such as smart home and utility management fees, which had been intentionally excluded from the initial advertised rental price. Tenants additionally faced a renters insurance exemption fee that typically only came to light once they received their very first monthly billing statement. The company also unfairly levied a myriad of one-time and situational fees.
Security deposit handling formed another major pillar of the federal investigation. Although the company publicly claimed it would only deduct funds for property damage exceeding normal wear and tear, the FTC alleges that Progress Residential routinely violated this promise. Management withheld security deposits for normal wear, preexisting property conditions, and major renovations that legally fell under landlord responsibilities. Furthermore, while contractual terms promised to send consumers itemized statements of deposit charges within 30 days of move-out, many former tenants never received any statement. Contracts also featured controversial nondisparagement clauses that attempted to prohibit renters from publishing negative online reviews.
Settlement Terms and Company Response
Under the terms of the proposed settlement, Progress Residential must fundamentally alter its business practices. The firm is required to prominently advertise rental prices that incorporate all mandatory recurring fees upfront, eliminating the practice of surprising tenants with extra monthly charges. Additionally, the company must standardize its security deposit processes, supply clear itemized explanations for any deductions, and halt false representations regarding pre-occupancy property inspections. The settlement also addresses complaints regarding inadequate customer service and requires the elimination of clauses restricting negative reviews.
A spokesperson for Progress Residential released a statement emphasizing that the agreement contains no admission of wrongdoing. The company maintains that its operational practices have consistently remained transparent, fair, and aligned with standard industry practices. Although the organization explicitly disagrees with the claims brought forward by the Federal Trade Commission, the spokesperson noted that this resolution allows the company to move forward with its mission of expanding access to quality and affordable rental housing across neighborhoods of opportunity.
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