Proptech firm EasyKnock was KO’d last week and doesn’t appear poised to rise from the mat.
The company abruptly announced its closure last week, NPR reported. EasyKnock’s website is essentially obsolete, containing only a terse statement and a handful of email addresses for customers to direct inquiries.
Its business plan involved buying homes from their owners, then renting the properties back to them, otherwise known as a sale-leaseback. The lure was instant cash for homeowners with an option to buy back the home later. EasyKnock marketed itself as the country’s first technology-enabled residential sale-leaseback company.
But the business model — which targeted owners whose poor credit disqualified them for a home equity loan — didn’t do much good for many of the homeowners EasyKnock promised to help. Some ended up evicted by EasyKnock for missing payments.
What’s more, according to investigative reporting by NPR, homeowners were potentially losing tens of thousands of dollars in equity and were typically unable to buy their homes back.
More than two dozen lawsuits have been filed against EasyKnock and several states are investigating the company. In May, for instance, Michigan’s attorney general sent a cease and desist letter to the company, alleging “unfair and deceptive trade practices.”
Last year, the company entered into a settlement with the attorney general’s of Massachusetts, where EasyKnock was accused of participating in an equity-skimming scheme. The company allegedly bought homes from financially strained consumers at low prices and then rented them back for unfair rents, violating tenant protection laws and engaging in deceptive practices. As a result of the settlement, EasyKnock suspended operations in the state.
Read more
Residential
National
EasyKnock dinged in Massachusetts sale-leaseback scheme
Tech
National
EasyKnock acquires power buyer Ribbon
Residential
New York
Home sale-leaseback startup EasyKnock raises $57 million
The Federal Trade Commission, while not directly dinging EasyKnock, recently issued a consumer alert regarding sale-leasebacks.
EasyKnock’s closure left its tenants confused about their suddenly nonexistent landlord. Some are receiving notices that property management is being transferred to NESE Property Management, an entity with a sparse website that lists a mailing address in Cleveland. The PO box appears to be an address formerly used by EasyKnock.