EasyKnock, a company known for its controversial sale-leaseback arrangements with financially strained homeowners, unexpectedly announced its closure on Thursday.

“After many years of serving consumers, EasyKnock has closed its doors,” a message on the company’s website stated. “We are deeply grateful for the trust placed in us to be part of the financial journey of so many.”

The company’s model involved purchasing homes from owners and then leasing them back, allowing owners to “unlock” the equity in their homes. This sale-leaseback model targets those unable to secure conventional loans due to poor credit or low income.

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A news investigation in June, using court records from lawsuits against EasyKnock, revealed that these arrangements often lead to homeowners losing significant equity and seldom repurchasing their homes. Some former owners have even faced eviction. Despite this, EasyKnock claims to have positively impacted the finances of many clients.

The firm is currently embroiled in over two dozen legal battles across the U.S. and is under scrutiny from several state attorneys general. Notably, Michigan’s attorney general issued a cease and desist order in May, accusing EasyKnock of “unfair and deceptive trade practices.” EasyKnock contests these allegations and maintains cooperation with legal authorities.

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In October, the Federal Trade Commission warned consumers about the potential risks associated with sale-leasebacks, stating, “The ads make these agreements — called sale-leasebacks — sound like a simple and risk-free way to get cash upfront and stay in your home. But the truth is these agreements are far from risk-free.”

The reason behind EasyKnock’s sudden shutdown was not disclosed in official communications, and the company did not respond to inquiries for comment.

This news was particularly shocking for Randee Noggle, who sold her Michigan home to EasyKnock in April 2023, hoping to ease financial strain caused by the economic effects of the pandemic. Instead, she found her situation worsened. Noggle, now a tenant in her former home, initiated legal action against EasyKnock earlier this year.

“It came as a surprise. It’s just like, well, okay, now what?” Noggle expressed her confusion.

The notification she received indicated that NESE Property Management would take over property management, although NESE’s website, bought on November 26, remains under construction.

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Noggle is somewhat protected by her ongoing lawsuit, which stipulates that EasyKnock cannot pursue eviction while the case is active. She and her husband are paying nearly $400 monthly into an escrow account.

“Everything’s a little bit of a question mark right now, so we’ve got to wait and see what happens,” said Robin Wagner, the attorney representing Noggle and others in lawsuits against EasyKnock.

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EasyKnock positioned itself as the pioneer in technology-driven residential sale-leaseback transactions. However, the legality of these deals, especially regarding mortgage regulations, remains contentious. EasyKnock insists its deals do not qualify as loans.

Stacey Tutt from the National Housing Law Project commented that EasyKnock’s shutdown raises doubts about the sustainability of sale-leaseback models, highlighting potential flaws in their business approach that might lead to accusations of unfair practices.

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The investigation suggested that repurchasing homes under these agreements is rare. Even with EasyKnock’s closure, Tutt believes it’s unlikely individuals like Noggle will regain ownership due to the unaffordable buy-back terms in the contracts.

Noggle, who bought her home with an inheritance from her grandmother, hopes this closure might signal the end of her ordeal. 

“I’m just hoping that maybe this is like the light at the end of the tunnel,” she concluded.

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(Image credit: Zillow)