The case was certainly one of a handful of authorized challenges in a number of states confronted by the sale-leaseback platform that was based in 2016.
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The New York-based sale-leaseback firm EasyKnock scored a authorized win in its battle with a Texas couple who claimed that their transaction was really a mortgage in disguise.
The ruling was an vital early signal for the corporate, which has confronted shopper lawsuits in Maryland, South Carolina, Pennsylvania and Ohio, and enforcement actions in Michigan and Massachusetts that posed dangers to its enterprise mannequin.
EasyKnock scored a victory in Texas final month when an arbitrator who thought-about the case dominated in its favor and awarded the corporate $153,000.
“We are thrilled with the arbitrator’s ruling, which affirms the integrity of EasyKnock’s business model and clearly identifies our sale-leaseback as a true sale,” EasyKnock CEO Jarred Kessler mentioned in a press release. “This victory is a bold statement that EasyKnock operates in full compliance with the law and provides a valuable, lawful option for homeowners to access their equity.”
At subject was a Texas couple who offered their residence to EasyKnock after which agreed to lease it again from the corporate with the choice to purchase it again or direct the corporate to promote it.
The couple later challenged the transaction and claimed it was a disguised mortgage that violated Texas lending legal guidelines, claims that EasyKnock denied.
The lawsuit adopted an investigation by NPR, which included an evaluation of over 400 properties that EasyKnock bought in Texas. The investigation discovered the offers “cost some people tens of thousands of dollars in equity and that the vast majority of people do not buy their houses back.”
EasyKnock advised NPR the civil lawsuits are “meritless” and that it’s cooperating with attorneys basic wanting into its enterprise practices. If householders lose cash on sale-leasebacks, it’s due to private circumstances or the native housing market, the corporate mentioned.
In a Could 20 cease-and-desist letter, Michigan’s lawyer basic ordered the corporate to halt what it claimed had been illegal enterprise practices, together with deceptive advertising and “oral misrepresentations made by EasyKnock representatives” to induce shoppers to enter into sale-leasebacks.
“EasyKnock’s sale-leaseback solution continues to provide a non-lending alternative for homeowners facing financial difficulties,” Kessler mentioned. “This ruling reaffirms that our model is not only innovative but also entirely legal. We are committed to helping more homeowners secure financial stability through our transparent, fair sale-leaseback agreements.”
