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Investors That Bought Up All the Houses Are Now Bad Landlords

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Former tenants of private-equity-mega-firm-turned-single-family-house-landlords Blackstone Group have filed a lawsuit alleging their Sun Valley dream home turned out to be a mold-infested, leaky "slum" that the company didn't do enough to fix. (It kind of sounds like they made it worse, actually.) House rentals, long a "mom-and-pop" operation working on mostly local scale, has in the last few years drawn more attention and money from mega-investor groups who have decided to "professionalize" the business by buying up a ton of houses and renting them out. In fact, in the last two years, "institutional investors spent $20 billion to acquire more than 130,000 homes" with the intention of renting them. And all that "investment" has driven up prices post-recession so that regular people are having trouble affording houses they actually want to live in. How's that all working out? Well the market in SoCal's a mess. And for one family, their freshly-remodeled rental house turned out to be "disgusting,"says the LA Times. And it went downhill from there.

The lawsuit filed by the tenants against Invitation Homes/Blackstone Group alleges all of this, unless indicated otherwise:

· On the day the tenants moved into the house, they found "trash strewn about and urine on the bathroom floors." (No word on what the tenants did when they found this gross mess.)
· After their May move-in, it wasn't long before "[c]ockroaches infested the house, the air conditioner failed, tap water turned brown and a bathroom flooded." The tenants also found leaks, which they reported.
· It took 10 days for someone to come out to fix the leaks in two of the homes' bathrooms, but the problem must have been larger, because in early June Invitation Homes told the tenants that piping in the house needed to be replaced.
· A month later, the couple moved in with family so repairs could be done. By that time, "the white moldings in the newborn's room had turned brown." The moldings ran along pipe outside of the house.
· A few days later, Invitation Homes told the tenants there was mold in their house, but the tenants probably already knew that because they were suffering "nose bleeds, headaches, fatigue, memory loss, inability to concentrate, chronic runny nose, respiratory issues and other chronic flu-like symptoms."
· Invitation offered to rent the tenants another house, but before they'd moved out of their Sun Valley house, the house had been rented out to someone else and all the locks had been changed.
· Invitation is still seeking back rent from the renters because, as attorneys for the company say, the lease stipulated that the tenants had "to pay rent while they did not occupy the property."
· Blackstone unit Invitation Homes sued over rental house's condition [LAT]