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EasyKnock, which offers sale-leaseback solutions to homeowners, announced a legal victory in Texas on Wednesday as it was awarded more than $153,000 by an arbitrator. The company has been fighting legal battles on multiple fronts through a series of consumer-initiated lawsuits and actions by regulators in several states.
The arbitrator’s decision, issued in U.S. District Court in Dallas, must be confirmed by a judge. The ruling states that EasyKnock’s sale-leaseback agreement was a “valid and enforceable contract,” and the total amount awarded includes back rent owed, late fees and attorneys fees.
“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,” co-founder and CEO Jarred Kessler said in a statement. “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.”
The case dates back to 2019, when homeowners Randy Sitzman and Anne Sadovsky Sitzman agreed to sell their home to EasyKnock. In exchange, EasyKnock agreed to pay off the existing mortgage balance of about $229,000 and unpaid property taxes of more than $9,000, along with a cash payment of roughly $75,000. The sale-leaseback agreement allowed the Sitzmans remain in the home and pay rent of $4,467 per month for the initial 12-month term, with options to renew the lease each year at higher rental rates.
According to legal documents, the couple later asserted that the sale-leaseback contract was a “disguised loan” under Texas law. They filed suit against EasyKnock in October 2021, declaring that the company had no right to title or ownership, along with violations of the Truth in Lending Act, allegations of fraud and other charges. The documents also show that the plaintiffs have been living in the home without paying rent since May 2023, having racked up about $74,000 in arrears to that point.
The court ordered the case to be moved into arbitration, where the arbitrator rejected the claims of fraud and misrepresentation and awarded compensation to EasyKnock late last month.
The case represents a victory for EasyKnock, which has faced criticism for its sale-leaseback model in several states. As of July, the company was defending itself from consumer lawsuits in Texas, Maryland, South Carolina, Pennsylvania and Ohio, while state regulators in Massachusetts, Michigan and Connecticut had also taken action.
At the end of last year, EasyKnock agreed to permanently end its sale-leaseback program in Massachusetts and paid $200,000 to the state as part of a settlement.
In May, Michigan Attorney General Dana Nessel took action by filing a cease-and-desist order against the company’s sale-leaseback practices in the state, alleging that EasyKnock targeted “financially distressed homeowners with low credit and high home equity.“
That was followed soon after by a separate case in Texas in which a homeowner accused EasyKnock and its subsidiary Ribbon Home of deceptive practices. She claims the companies moved to evict her even after she had made payments for three years and saw significant appreciation in the value of her home.
“EasyKnock’s sale-leaseback solution continues to provide a non-lending alternative for homeowners facing financial difficulties,” Kessler said. “[This week’s] 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.”
