Single Family Rental Giant Invitation Homes Restarts Eviction Filings

One of the largest single-family rental landlords in the United States, Invitation Homes (NYSE: INVH), has restarted efforts to evict residents of its homes across the country, filing more than seventy eviction cases since July and more than two dozen cases since the US Centers for Disease Control and Prevention (CDC) announced an eviction moratorium on September 1 to limit the spread of COVID-19.

On its August 4 conference call, Invitation Homes President and CEO Dallas Tanner stated that the landlord, which owns 80,000 rental homes, was doing well in the face of COVID-19. By the end of the second quarter of 2020, the company had $1.6 billion in cash, and spent $46 million on acquisitions for the quarter.

Private equity firm The Blackstone Group originally owned Invitation Homes, created it in the years following the 2008 Global Financial Crisis as part of a wave of Wall Street buy ups of single family homes.

Media coverage:

Bloomberg, Sept 14: “Eviction Filings by Big Landlords Surged After Trump Issued Ban”

COVID-19 and rent

While unemployment remains at historic highs and many renters across the country have foregone their monthly rent payments, Invitation Homes, as of August 4, boasted a “near historical”^[i] average rent collection rate. In the second quarter of 2020, the company’s average rental rate actually increased by 3.7 percent, and it saw gross rental revenues increase 4.7 percent versus the same period last year. Conversely, COO Charles Young argued that the company’s income overall decreased from the first quarter 2020 in large part due to “non-enforcement of late fees.”^[ii]

Historically, the company’s average rent collections—before the COVID-19 pandemic— was 99 percent, compared to:

Eviction filings in the face of the pandemic

Even in counties where COVID-19 was on the rise and residents were asked to stay at home, Invitation Homes has recently filed eviction cases. The company’s eviction filings resumed in June and July, corresponding with the reported increase in rent collection.

Many jurisdictions across the country have implemented eviction moratoriums, and the now-expired CARES Act had additionally barred landlords with government-backed mortgages from imposing late fees or other charges related to non or late payment of rent. Invitation Homes, like many corporate landlords, relied a great deal on fees in order to increase profits, though for April 2020, the company waived all fees, saying it was “just trying to be thoughtful with our residents.”[iv]

Invitation Homes’ COO stated that the company had reintroduced late fees in May and June. The practice may have been illegal if levied against residents of government-backed properties (until July 27, 2020).[v] Invitation Homes received nearly a billion dollar loan from federally-backed lender Fannie Mae in 2017 as part of a sale of securities linked to rental income.[vi]

Invitation Homes quietly restarts evictions

Possibly in preparation for the end of the CARES Act eviction moratorium, Invitation Homes quietly altered its statement on COVID-19 in late July. Prior to July 23, 2020, its public facing stance had been a moratorium on evictions:

“We have instituted a moratorium on evictions until further notice. We’re in the business of providing homes for families and always try to work with our residents to keep them in their homes.”[vii]

On July 23^rd, the company quietly announced it was restarting evictions:

“While eviction is always our last resort, we will preserve our legal rights once we have exhausted all other options.”[viii]

Invitation Homes restarted eviction filings even as COVID-19 was spiking in many places. For example during the first week of July, Arizona ranked as the top global pandemic hot spot, adding 3,300 coronavirus cases per million residents. Yet Invitation Homes filed nearly two dozen eviction cases in Maricopa County (Phoenix and Mesa) Arizona between July 6 and July 17.

Invitation Homes also recently filed eviction cases in Texas, Georgia, and Florida during spikes in COVID-19 cases. In a case filed in Florida in September, after the CDC moratorium took effect, the eviction notice Invitation Homes provided to the resident stated “If you have been adversely affected by the COVID-19 emergency you must inform us by the above date. If you do not inform us we will presume you have not been adversely affected by the COVID-19 emergency.” The notice was delivered on August 20, giving the resident just five days to respond.

Despite CDC moratorium, Invitation Homes continues eviction filings

On September 1, the US Centers for Disease Control and Prevention (CDC) announced an eviction moratorium to limit the spread of COVID-19.

Since the CDC’s announcement, Invitation Homes has filed more than two dozen eviction cases in Arizona, Texas, Georgia, and Florida. The majority (15) of these cases were filed on or after September 4, when the CDC’s eviction moratorium took effect.

For example, on September 11, Invitation Homes filed five eviction cases in DeKalb County, Georgia. All of the cases are evictions for nonpayment of rent, meaning they are covered by the CDC eviction moratorium.

Eviction cases filed by Invitation Homes since July 1:

[ii] Ibid.

[i] https://www.fool.com/earnings/call-transcripts/2020/08/04/invitation-homes-inc-invh-q2-2020-earnings-call-tr.aspx, Accessed Aug. 4, 2020.

[viii] https://www.invitationhomes.com/coronavirus-precautions/, Accessed Aug. 6, 2020.

[iii] https://www.fool.com/earnings/call-transcripts/2020/08/04/invitation-homes-inc-invh-q2-2020-earnings-call-tr.aspx, Accessed Aug. 4, 2020.

[iv] Ibid.

[v] Ibid.

[vi] https://www.fanniemae.com/syndicated/documents/mbs/remicsupp/2017-T01.pdf

[vii] https://web.archive.org/web/20200722223957/https:/www.invitationhomes.com/coronavirus-precautions/, Accessed Aug. 3, 2020.