Residential
sale-leaseback
platform

EasyKnock
continues
to
face
scrutiny
from
state
regulators
and
is
now
under
fire
from
disgruntled
consumers.

As
of
early
July,
the
firm
was
facing
consumer
lawsuits
in
Texas,
Maryland,
South
Carolina,
Pennsylvania
and
Ohio,
and
actions
from
state
regulators
in
Massachusetts,
Michigan
and
Connecticut.

The
increased
interest
in
EasyKnock
began
in

December
of
2023,
when
Massachusetts
Attorney
General
Andrea
Joy
Campbell
announced
that
she
had
entered
into
a
settlement
with
EasyKnock
for
what
her
office
alleged
was
deceptive
practices
that
stripped
consumers
of
their
home
equity.

Campbell’s
office
claimed
that
EasyKnock
“engaged
in
an
unfair
and
deceptive
equity-skimming
scheme
that
involved
purchasing
the
homes
of
cash-strapped
consumers
at
bargain-basement
prices
and
then
renting them
back
to
the
consumers,
at
times
for
unfair
rents,”
in
violation
of
the
state’s
consumer
protection
law.
In
addition,
her
office
alleges
that
EasyKnock
violated
some
of
Massachusetts’
landlord-tenant
laws.

According
to
the
attorney
general’s
office,
their
investigation
found
that
“EasyKnock
targeted
consumers
with
online
advertisements
that
used
loan-like
language
and
failed
to
adequately
disclose
that
the
company’s
products
require
the
consumer
to
sell
their
home
to
EasyKnock.”

EasyKnock
agreed
to
permanently
end
its
sale-leaseback
solution
in
Massachusetts,
and
to
pay
$200,000
to
the
state
as
part
of
the
terms
of
its
settlement.

The
action
in
Massachusetts
was
followed
up
in
February
with
Connecticut’s
commissioner
of
consumer
protection
issuing
a

civil
investigative
demand
(CID)
into
EasyKnock.
The
CID
was
in
conjunction
with
a
probe
“into
business
practices
regarding
residential
sale-leaseback
agreements
which
may
constitute
unfair
or
deceptive
acts
or
practices.”

The
most
recent
state
regulator
to
take
action
against EasyKnock
is
Michigan’s
Attorney
General
Dana
Nessel,
who

announced
that
her
office
had
sent
a
notice
of
intended
action
to
company,
ordering
it
to

cease
and
desist
from
it
“unlawful
business
practices.”

In
a
release,
the
attorney
general’s
office
claimed
that
EasyKnock’s
marketing
was
misleading
and
that
the
firm
had
“made
misrepresentations
or
misleading
statements
to
pressure
homeowners
into
transactions,
caused
confusion
about
escrow
fund
disbursements,
and
failed
to
make
necessary
home
repairs
in
a
timely
manner.”

In
addition
to
these
actions,
EasyKnock
is
facing
several
consumer
lawsuits,
one
of
which
is
seeking
class
action
status.

Filed
by
Randee
Noggle,
Adam
Noggle,
Catherine
Rodgers,
Leonard
Rodger,
Kendrick
Rouser,
Gunther
Hamann
and
Lauren
Hamann
on
June
25,
2024,
in
U.S.
District
Court
in
Detroit,
the
suit
alleges
that
EasyKnock
uses
a
“deceptive
and
unfair
lending
scheme”
to
“lure
homeowners
with
poor
credit,
but
with
significant
home
equity,
into
unlawful,
usurious
loans
known
as
‘Sell
&
Stay’
transactions.”

“While
Defendant’s
“Sell
&
Stay”
transaction
is
ostensibly
structured
as
a
sale-and-lease-back
scheme,
in
fact,
it
bears
all
the
hallmarks
of
what
Michigan
courts
have
long
held
to
be
an
“equitable”
or
“disguised”
mortgage,”
the
complaint
states.
“The
primary
hallmarks
of
a
disguised
mortgage
are:
the
adverse
financial
position
of
the
grantor,
the
intent
of
the
parties,
and
the
inadequacy
of
the
purchase
price
for
the
property.”

Due
to
this,
the
plaintiffs
in
the
Noggle
suit,
as
well
as
the
other
suits,
have
brought
their
complaints
under
the

Truth
in
Lending
Act,
which
protects
consumers
from
unfair
and
deceptive
mortgage
lending
practices
and
requires
lenders
to
provide
clear
and
upfront
information
about
borrowing
costs,
interest
rates
and
fees.

However,
in
response
to
similar
claims
made
in

an
investigation
done
by
NPR,
EasyKnock
states
that
it
cannot
be
in
violation
of
the
Truth
in
Lending
Act
as
the
deals
are
not
loans,
but
instead
a
home
sale
transaction
and
a
rental
agreement.

EasyKnock,
which
was
founded
by

Jared
Kessler,
did
not
immediately
return
a
request
for
comment.

EasyKnock
was
founded
in
2016
and
is
based
in
New
York
City.
The
platform
closed
a
$3.5
million
seed
funding
round
in
2018
that
included
$100
million
in
new
debt
funding
from
investors
including

Montage
Ventures,

Crestar
Partners
and

Blumberg
Capital.
Most
recently,
EasyKnock
announced
a

$28
million
series
D
funding
round
from
new
and
existing
investors
including

Gaingels,

Moderne
Ventures,

QED
Investors,
and


Zillow
co-founder
Spencer
Rascoff.

Over
the
past
year,
the
firm
has
been
on
an
acquisition
spree
of
sorts,
staring
with
its
acquisition
of

struggling
power
buyer firm Ribbon
in
May
2023, home
maintenance
company Onder,home
equity
investment firm
Balance
Homes,
and
home
equity
investment
firm

HomePace.

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