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Few companies have the kind of operations that Curbio enjoys.
The company was founded by Rick Rudman in 2017 and has raised $118 million in three rounds of financing.
It has received several honors, including winning the Pitch Battle sponsored by Second Century Ventures, the for-profit investment arm of the National Association of Realtors.
Currently, the company is conducting home improvement pre-sales in 55 different markets. NAR even partnered with the company last month.
But all of these victories also come against a backdrop of clear growing pains for the company, including strained relationships with some real estate agents and past clients, as well as dozens of lawsuits.
Brian Schwab
In November, Washington, D.C. Attorney General Brian Schwalb filed a lawsuit against Curbiodenounced its approach as a “scheme of deception, intimidation and fraud.”
Cubbio almost denies it Schwalb alleges and told Inman that its record of serving more than 4,000 customers shows why it is growing so quickly.
“We strongly disagree with the claims made by the Washington, D.C. Attorney General’s Office, and we have responded by denying all allegations,” Curbio said in a statement. “These claims are not only baseless, but they also cast a shadow on Curbio and our efforts to Creating a false narrative about the valuable services provided by rehabbing a home and preparing it for sale while allowing clients to wait until the home sells before paying Curbio fees. We have completed thousands of projects and provide real estate agents and their clients with reliable and A successful outcome.”
But interviews with more than a dozen real estate agents, past clients, industry experts, a former Curbio employee and records of lawsuits between Curbio and its clients reveal more cases from around the country matching the allegations in the D.C. lawsuit: Mid-Project Costs were rising; some sellers felt the work of the company’s contractors was subpar; liens were placed on the properties; and customers got into disputes that they ultimately blamed on the brokers who introduced them to Curbio.
“I’ve let them know that I will no longer be working with them,” Philadelphia real estate agent Liora Israel told Inman, adding that her client in the Philadelphia suburb of Melrose Park was sued by Curbio in January.
Delays, Liens and Equity Loss
Online reviews and interviews with agents provide hundreds of examples of real estate agents who say they’ve helped clients get higher sales prices by working with Curbio, which was founded in 2017 and is headquartered in Maryland.
“The services they offer are great for clients who have a lot of equity in their home but can’t afford to upgrade to get their home to sell at least market value or more,” Tennessee agent Lori Tackett told Inman. .” “My particular client would sell it as-is and not receive as much money as she did.”
The company’s model of first determining the scope and price of a renovation and then coordinating subcontractors has earned Curbio several accolades. First, Curbio told Inman that it is “completely aligned with agents” and focused on “Speed, quality and efficiency. “
But not everyone was happy with the experience.
Schwalb—Attorney General of Washington, D.C.— He claimed in his complaint Curbio’s contracts leave homeowners vulnerable to cost overruns, delays and liens against the property in disputes. He also accused the company of filing a lien on the property before both parties agreed the work was completed.Schwalb writes, “In Since 2018, Curbio has repeatedly recorded a deed of trust for the entire contract amount of the homeowner’s property while the homeowner was signing the Curbio contract, but before a dollar of the work was completed. “
Schwalb’s complaint continued: “Curbio utilizes a series of low-cost subcontractors to deliver overpriced, poor-quality products and locks consumers into a one-sided contract from which there is no escape.”
Schwalb’s lawsuit, filed in District of Columbia Superior Court, ultimately claims Curbio violated the Consumer Protection Procedures Act and the Abuse, Neglect, and Financial Exploitation of Vulnerable Adults and Elders Act. Schwalb wants a judge to order Curbio to stop violating those laws, award an undisclosed amount in restitution and damages, and remove liens on the Washington, D.C., property, among other things.
Homeowners in markets across the country have reported similar issues to those raised in Schwab’s lawsuit.
In a lawsuit filed against the company February 29 CompanyAn attorney for a homeowner working with Curbio said the woman’s experience was “eerily similar” to what Schwalb alleged. Complaints allege that costs have risen, construction has been delayed and homes have been damaged.
“Curbio did not wait until … the project was completed before he issued a mechanics’ lien on her property and told her that she would be personally liable in excess of $130,000 for work that Curbio never performed,” the complaint states.
Other real estate agents and clients detailed similar experiences in interviews with Inman.
Talia Lewis
“It’s a good theory,” says Southern California real estate agent Taria Lewis, who recounts multiple experiences using Curbio. “If you can get the job done and pay for it with the sale proceeds, you certainly want to go that route.”
After referring her third client to Curbio to fix up his Los Angeles home before selling it, the job ended up taking much longer than expected.
“This should take several months,” Lewis said. “It took a year and a half.”
She said Lewis’s clients kicked her out of a $2 million property. Curbio sued the homeowner, claiming the owner failed to list the home for sale within five business days of the work being completed and filed a lien.
Like Lewis, Israel recommended a seller client to Curbio in early 2021. Israel said the terms sounded simple, but the client ultimately felt she was overcharged thousands of dollars. Curbio eventually sued the homeowners, filing liens and urging Israel to lower the price.
leola israel
“This is crazy,” Israel said, adding, “They kept sending threatening emails saying she needed to lower the price or they would add interest.”
The Israeli client eventually relinquished her position as listing agent as well.
Curbio said it has updated its policy so that, while it previously offered a price range for renovated homes, contracts no longer include price requirements or price reduction clauses.
Over the past five years, Curbio has filed an average of nearly one lawsuit a month against its clients, often placing liens on the properties and alleging the clients breached their contracts by not listing their renovated homes for sale after the company believed the work was complete. court records show.
When asked about complaints and lawsuits, Curbio said most customers are satisfied.
“We hope you will consider these disputes in the context of thousands of completed projects, most of which were completed to everyone’s satisfaction,” the company said in a statement to Inman. “If you do, we are happy to Happy to provide hundreds of such references.”
perspective problem
Whether these legal battles are a warning sign or just the cost of doing business may be just a matter of perspective.
With about one lawsuit per month, Curbio may not engage in unusual litigation behavior. A Chicago Lawyer, Expert in Construction and Breach of Contract Law It’s not uncommon for contractors to sign an agreement, start work on a home and then try to change the cost or scope of work, leading to disputes that end up in court. The attorney said Curbio’s size compared with the number of lawsuits may not indicate a problem.
“There are 60 (lawsuits) compared to 4,000 transactions in the same period, which is disproportionate for Curbio,” the lawyer said. The lawyer declined to be named for fear of disparaging a private company. “Compared to 4,000 people, it’s not really that many. Especially in the construction field.”
On the other hand, Inman begins to compete Pre-sale decoration company Freemodel.The company declined to comment specifically on Curbio but said it has completed The four markets provide a total of 550 job opportunities. A review of court documents by both the company and Inman shows that the company has not been sued or sued by past clients.
Asked if it was concerned about the legal case involving Curbio, a spokesman for NAR, which recently signed a partnership with the company, said it had the best interests of its members in mind.
“We evaluate potential partnerships based on their alignment with our strategic goals and the potential benefits they provide to our members,” a spokesperson said in a statement. “We work closely with Curbio and all The collaboration with other Realtor Benefit Partners is designed in the best interest of our members and is designed to provide them with valuable benefits and services.”
Under the terms of Curbio’s agreement with the association, NAR members will have free access to Curbio’s application to estimate the cost of renovations. They will also receive free digital floor plans from Curbio for each proposal if the job is expected to cost at least $10,000.
The price of doing business is high
It remains to be seen how the various legal proceedings involving Curbio play out. But at this stage at least, it’s clear that Curbio’s rapid growth and long-term influence have earned it some friends and plenty of detractors. Sometimes, even friends at work can become lukewarm: Elizabeth Colon, an eXp agent in Florida, said she referred a client to Curbio based on the convenience it provided.
“I have to say it’s a good job,” Colon said. “Everything was done very well. They had a very approachable case manager.”
But even a good job wasn’t enough to keep Colon coming back: The price, she said, was higher than other pre-sale renovation options she’d gotten from subcontractors on the market.
Email Tyler Anderson
