A group of seven Democratic senators have launched an investigation into the abrupt closure of home sale-leaseback company EasyKnock.
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In a letter to Jarred Kessler, the former CEO of the company that collapsed earlier this month, the senators demanded details about the defunct company’s financials as far back as 2016 along with an explanation for the sudden decision to shut down.
“We are deeply concerned about EasyKnock’s lasting impact on vulnerable homeowners, including homeowners with pending residential sale-leaseback agreements with your company,” the senators wrote.
EasyKnock didn’t respond to requests for comment Friday morning.
The company brought the sale-leaseback model into the single-family residential market, with EasyKnock paying homeowners for their properties and turning them into renters.
Critics say the company deceptively advertised to and targeted distressed homeowners and rarely paid fair market value for the homes it purchased.
The senators are requesting EasyKnock respond to their request by Dec. 30. They are asking EasyKnock to open its books, disclose the number of homes it purchased and provide detailed statistics about the number of sellers whose homes were repurchased by the original owners or sold to third parties.
They’re seeking information about the number of evictions EasyKnock initiated, the company’s gross profit and an explanation for why the company hastily dissolved.
The letter was signed by Sens. Bernie Sanders and Peter Welch of Vermont, Chris Murphy and Richard Blumenthal of Connecticut, Massachusetts’ Elizabeth Warren, Minnesota's Tina Smith and Chris Van Hollen of Maryland.
New York-based EasyKnock launched in 2016 and raised at least $88M in venture funding, including from Zillow co-founder Spencer Rascoff. Issues with regulators began by 2023.
In December of that year, the firm agreed to pay $200K to settle a suit brought by the Massachusetts attorney general that alleged EasyKnock engaged in deceptive marketing tactics.
The Michigan attorney general sent the company a cease and desist order in May and a June investigation by NPR increased scrutiny on the firm.
In October, the Federal Trade Commission highlighted the company’s business model in a consumer alert, calling sale-leasebacks a risky choice for homeowners with clauses “often hidden in the fine print of complicated contracts” that lead to increased costs or eviction for sellers.
The firm suddenly shut down Dec. 10, posting a short statement on its website that “arrangements have been made” for customers who had sold their homes to the company.
The senators said in their letter that EasyKnock’s customers had been left scrambling to figure out who now owns their home.
“EasyKnock’s decision to ‘shut down’ raises even more questions about how it will handle ongoing agreements and properly compensate homeowners who were negatively affected by the company’s actions,” they wrote.
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