Curbio To Pay .5 Million To Settle Washington D.C. Fraud Lawsuit

Curbio To Pay $7.5 Million To Settle Washington D.C. Fraud Lawsuit

The pre-sale home renovation company denied all allegations and said it decided to settle to focus on its path forward. Attorney General Brian Schwalb called it a win for consumers

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Pre-sale home renovation company Curbio agreed to pay $7.5 million and enact business changes as part of an agreement it reached with the Washington, D.C., Attorney General on Thursday.

The company will also begin disclosing any revenue-sharing agreements it has with real estate agents and brokerages who refer homeselling clients to Curbio, according to the settlement agreement.

The settlement comes after Washington, D.C., Attorney General Brian Schwalb accused the company of fraudulent conduct that trapped customers into contracts that siphoned off their home equity.

“For many District families, the equity in their home is, by far, their most valuable asset — and Curbio’s deceptive scheme preyed upon homeowners seeking, through the sale of their home, to realize that equity,” Schwalb said in a statement.

“This is a significant win for nearly 200 DC homeowners who Curbio lured in with false promises of quick, high-quality renovations designed to increase sale prices, but who were then exploited, intimidated, and overcharged,” he said.

Schwalb’s office and Curbio said the changes would apply to customers nationwide.

Schwalb sued Curbio in November, alleging that the company engaged in deceptive practices.

The lawsuit came after complaints from homeowners and real estate agents who said the company conducted slow and shoddy work and that the price would skyrocket after contracts were signed.

In a statement, Curbio denied all allegations and called the lawsuit “aggressive,” “inflammatory” and “baseless.” It said the decision to settle the lawsuit was “difficult,” but that it made the decision to save the time and money it would have needed to spend to fight the lawsuit.

“Curbio remains the leading pre-sale home improvement company in the dozens of markets we serve from coast to coast,” the company said. “Our partnerships with many of the leading real estate brokerages in the country are a testament to the trust we’ve earned from thousands of licensed real estate agents and their clients through quality project work and successful home sales.”

Of the $7.5 million, $2.58 million will go to D.C. customers who worked with Curbio between its inception and the date the lawsuit was filed. Another $920,000 will go toward a balance reduction for D.C. customers who owe Curbio money, and the remaining $4 million will go to Washington, D.C.

Within two months, Curbio will create and post a process that outlines how clients and the company can resolve disputes over whether work was completed adequately or at all. A new full-time employee will act as a consumer advocate who will refer disputes to a third-party inspector and mediator. That mediator’s decisions will be considered binding on Curbio and its customers.

That stipulation gets to the heart of disputes that have occurred at least dozens of times between the company and its clients and the real estate professionals who refer their clients to Curbio.

In an investigation earlier this year, Inman interviewed more than a dozen Realtors, past clients, industry experts, and a former Curbio employee and reviewed records from litigation between Curbio and its clients. It found more cases from across the country that track with the allegations in the D.C. lawsuit: costs rose mid-project; some sellers deemed the company contractors’ work sub-par; liens were placed on properties; clients got tied up in disputes and ultimately blamed the agent who introduced them to Curbio.

Homeowners who became involved in disputes with the company said that at times Curbio filed liens against their homes before the disputes were resolved.

Curbio denied those allegations and said it had served over 4,000 clients while rapidly growing to become one of the nation’s largest pre-sale home renovation companies.

As part of the agreement, Curbio will no longer file liens against homes whose owners are disputing the adequacy or completeness of the company’s renovations.

It will also be required to review the contracts it uses within Washington, D.C., and make sure they don’t include various provisions around work quality, who pays attorneys fees, and other rights of the customer and company, among the provisions Schwalb’s office called “unconscionable.” 

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