Press Release  AG Campbell Reaches Precedent Setting Settlement Against Real Estate Company EasyKnock For Deceptive Practices That Stripped Consumers Of Home Equity

BOSTON — Attorney General Andrea Joy Campbell has announced a precedent setting settlement, via an assurance of discontinuance (AOD), with the “PropTech” company EasyKnock, for engaging in an unlawful sale-leaseback scheme. The settlement resolves allegations that the company 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. According to the AG’s Office, EasyKnock then violated laws designed to protect tenants, including by charging unlawful and untimely fees and failing to make necessary repairs. The AG’s Office alleges that this unfair and deceptive sale-leaseback scheme violated Massachusetts consumer protection law.  

Under the terms of the settlement, EasyKnock has agreed to permanently cease its unfair and deceptive “sale-leaseback solution” business in Massachusetts and to undertake changes to their business practices, including returning tens of thousands of dollars of improperly held funds to consumers, lowering rents for certain existing tenants, and complying with landlord-tenant laws. Additionally, EasyKnock will make a payment of $200,000 to the Commonwealth. Notably, the AG’s settlement has set a precedent that will reinforce efforts to protect consumers from companies who similarly bamboozle consumers out of their hard-earned home equity. 

“I am proud of the leadership of my team in this precedent-setting settlement with EasyKnock,” said AG Campbell. “We will continue to protect consumers, especially in the housing sector.”  

“PropTech” companies like EasyKnock operate under an emerging business model that uses technology like AI and big data to conduct real estate transactions, including complex and confusing ones such as EasyKnock’s “sale-leaseback solutions.” Unfortunately, such technology can be used to target and exploit vulnerable “house-rich, cash-poor” consumers, who, despite having significant home equity, have little cash income or savings. Some “PropTech” companies, such as EasyKnock, take advantage of these consumers by offering cash up front in exchange for significantly larger amounts of home equity.  

An investigation by the AG’s Office 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. The investigation also found that EasyKnock deceived consumers about market rent and engaged in bait-and-switch tactics, changing the terms of its contract at the last minute to consumers’ detriment. Consumers ended up saddled with complex and lopsided terms which they did not always fully understand. 

The AG’s Office also found that EasyKnock violated Massachusetts landlord-tenant law by charging up-front fees and deposits to its tenants far in excess of the legal maximum. It also failed to consistently maintain its properties as required under the state sanitary code, and illegally shifted the costs of repairs to tenants. Additionally, EasyKnock illegally charged tenants late fees prior to 30 days and illegally charged tenants for water. Under the terms of the settlement, EasyKnock will ensure compliance with landlord-tenant laws and lower rental amounts for existing tenants.  

Consumers who believe they may have been subject to unfair and deceptive business practices may file a consumer complaint with the AG’s Office.   

This matter has been handled by Assistant Attorneys General Matthew Lashof-Sullivan and Colin Harnsgate, Division Chief Yael Shavit, and Paralegal Sky Karp, all of the AG’s Consumer Protection Division, assisted by Marlee Leo of the AG’s Civil Investigations Division.  

###