EasyKnock, Residential Sale-Leaseback Company, Abruptly Shuts Down Amid Legal Scrutiny
It turns out that running a sale-leaseback business in the residential market isn’t that easy.
Real estate investor EasyKnock, which purchased homes and then leased them back to the former owners, abruptly shut down Monday. The closure comes as the embattled firm faces more than two dozen lawsuits and investigations from state attorneys general.
It also follows an October consumer alert from the Federal Trade Commission that warned of the potential predatory nature of the entire sale-leaseback business model in traditional housing.
“After many years of serving consumers, EasyKnock has closed its doors,” the company’s website says. “While EasyKnock may no longer be around, arrangements have been made to ensure continued services for our customers.”
Jared Kessler founded New York-based EasyKnock in 2016 and raised millions of dollars in venture capital funding.
It closed a Series D funding round in February with $28M raised from investors including Zillow co-founder Spencer Rascoff, HousingWire reported. Its Series C funding round closed in early 2022 with $57M raised.
The firm grew through acquisitions in 2023, including Ribbon in May, Onder in September and Balance Homes last December. Most recently, the company completed the May 2024 acquisition of HomePace.
EasyKnock’s expansion coincided with increased scrutiny over its business practices. In December 2023, the firm agreed to pay $200K in a settlement with Massachusetts Attorney General Andrea Joy Campbell over allegations that EasyKnock engaged in deceptive marketing tactics.
A June investigation by NPR identified more than 20 lawsuits and found that the sales to EasyKnock can end up costing homeowners tens of thousands of dollars in equity.
The Michigan attorney general sent the company a cease and desist order in May, adding to mounting lawsuits, including from disgruntled customers. EasyKnock denied liability in all of its cases and was cooperating with investigators, the company told NPR.
EasyKnock didn’t respond to Bisnow’s request for comment.
The FTC highlighted the company’s business model in October as a risky choice for homeowners. In a consumer alert, the agency said sale-leaseback deals include risks “often hidden in the fine print of complicated contracts” that catch unsuspecting sellers with hefty fees, exorbitant rent and potential eviction.
It is unclear how EasyKnock will unwind its assets and what agreements it has made to sell the houses it purchased from sellers who became tenants.
Stacey Tutt, a senior staff attorney at the National Housing Law Project, told NPR that the company’s sales contracts typically include a buyback provision, but she questioned whether customers who had sold their homes for cash to become renters would have the funds to repurchase the property.
“That's where I get very concerned about their ability to stay in the homes, given the terms of the contracts themselves,” she said.
