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Few companies enjoy the kind of management that Curbio enjoys.
Founded in 2017 by Rick Rudman, the company has raised $118 million across three funding rounds.
He has received numerous accolades, including winning the “Pitch Battle” sponsored by Second Century Ventures, the commercial investment subsidiary of the National Association of Realtors.
And it currently performs pre-sale home renovations in 55 different markets. NAR also partnered with the company last month.
But all of these victories come against a backdrop of obvious growing pains for the company, including strained relationships with some real estate agents and past clients and dozens of lawsuits.
Brian Schwalb
In November, Washington, D.C. Attorney General Brian Schwalb filed a lawsuit against Carbio.dismissed the conduct as a “scheme of deception, intimidation, and fraud.”
Mr. Carbio mostly denies it. Mr. Schwalb debunked all claims and told Mr. Inman that his track record of serving more than 4,000 customers shows why it has grown so quickly.
“We strongly disagree with the allegations made by the D.C. Attorney General’s Office and have filed a response denying all allegations,” Carbio said in a statement. “These claims are not only unsubstantiated, but they also compromise Curbio and the valuable services we provide to fix and sell homes while making customers wait to pay Curbio until the home sells.” We have completed thousands of projects and have a strong track record of reliability and success for real estate agents and their clients.”
But interviews with more than a dozen real estate agents, past customers, industry experts, and former Carbio employees, as well as court records between Carbio and its customers, show that many more from around the country match the allegations in the D.C. lawsuit. The lawsuit states: costs rose midway through the project; some sellers deemed the company’s contractors’ work to be substandard; A lien was placed on the property. The customer became embroiled in a dispute and ultimately blamed the agent who introduced him to Curbio.
“I told them I would never work with them again,” Philadelphia-based real estate agent Liora Israel told Inman, adding that her clients in Melrose Park, a Philadelphia suburb, were arrested in January. He added that he had been sued by Carbio.
Delays, Liens and Loss of Capital
Online reviews and interviews with agents show hundreds of examples of real estate agents who say they’ve helped their clients get higher sales prices by working with Curbio, a Maryland-based company founded in 2017. is also published.
“The services they offer are great for customers who have a lot of equity in their home but can’t afford to upgrade to sell their home at least above market value,” said Lori Tackett, a Tennessee agent. he told Inman. “My particular client could not have sold as-is and received as much money as she did.”
The company’s model of setting the scope and price of a renovation and then coordinating subcontractors has won Curbio numerous awards. What’s more, Carbio told Inman that the company is “fully aligned with agents” and is focused on:Speed, quality and efficiency. ”
But not everyone is happy with the experience.
Schwalb — Attorney General of Washington, DC — His complaint alleges: Carbio’s contracts left homeowners vulnerable to cost overruns, delays, and liens placed against their properties during disputes. He also accused the company of filing a lien on the property before the mutually agreed upon work was completed. Schwalb writes: Dozens of times since 2018, around the same time a homeowner signs a Curbio contract, but before $1 worth of work is completed, Curbio has filed a deed of trust for the full contract amount against the homeowner’s property. Recorded. ”
“Carbio locks consumers into one-sided contracts with no escape and then employs low-cost subcontractors to deliver high-priced, low-quality products,” Schwalb said in the complaint. Ta.
Mr. Schwalb’s lawsuit, filed in the Superior Court of the District of Columbia, ultimately alleges that Mr. Carbio violated the Consumer Protection Procedures Act and the Abuse, Neglect, and Economic Exploitation of Vulnerable Adults and Elderly Persons Act. claims. Mr. Schwalb is asking a judge to order Carbio to stop violating these laws, award him undisclosed compensation and damages, and void his lien on the Washington, D.C., property.
Homeowners in markets across the country reported problems similar to those raised in Mr. Schwalb’s lawsuit.
In a lawsuit filed against February 29th company, a homeowner’s attorney who worked with Curvio said the woman’s experience was “eerily similar” to what Schwalb claimed. The complaint alleges that it increased costs, delayed construction and caused damage to homes.
“Carbio issued a mechanic’s lien against her property without waiting for the project to be completed, making Carbio personally liable for over $130,000 for work he never performed. ”, the complaint states.
Other real estate agents and clients detailed similar experiences in interviews with Inman.
Talia Lewis
“The theory is great,” said Talia Ruiz, a Southern California real estate agent who shared multiple experiences using Curbio. “If you can get a job done and pay for it with the proceeds from the sale, obviously you want to go down that path.”
When she referred her third client to Carbio to fix up their Los Angeles home before selling it, the process ended up taking much longer than expected.
“It was supposed to take several months,” Lewis said. “It took a year and a half.”
Lewis’ client removed her from his $2 million listing, she said. Carbio filed a lien against the owner for not listing the home within five business days of being told the work was complete.
Like Lewis, Israel introduced seller clients to Carbio in early 2021. Israel said the terms sounded easy enough, but in the end customers felt they were being charged thousands of dollars in additional fees. Mr. Curvio eventually sued the homeowner, filed a lien, and forced Israel to lower the price.
Liora Israel
Israel “went crazy,” he said, adding: “We kept sending threatening emails saying we had to lower the price or we’d add interest.”
The Israeli client also eventually removed her as a listing agent.
Carbio has updated its policy, saying that while it previously provided price ranges for post-renovation homes, it no longer includes price requirements or reduction clauses in contracts.
On average, over the past five years, Carbio has filed lawsuits against customers approximately once a month, many of which have placed liens on properties and renovated them after the company deems the work complete. The customer claims that the customer breached the contract by not putting the house up for sale. Court records show.
Asked about complaints and lawsuits, Curbio claimed that most of its 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. . “We would be happy to provide you with hundreds of these references if you would like.”
problem of perspective
Whether these legal battles are a red flag or simply a cost of doing business is perhaps a matter of perspective.
With about one lawsuit per month, Curbio may not be unusually litigious.a Chicago attorney specializing in construction and contract violations After a contractor signs a contract and begins work on a home, it’s not uncommon for contractors to try to change the cost or scope of work, leading to disputes that end up in court, he said. The lawyer said Carbio’s size relative to the number of cases may not be indicative of a problem.
“sixty [lawsuits] “Compared to the 4,000 deals in the same period, this is disproportionate in favor of Curbio,” said the lawyer, who declined to be named for fear of disrespecting the private company. “Compared to 4,000 people, that’s not really that many, especially in the construction industry.”
Meanwhile, Inman reached out to competitors Freemodel, a pre-sale renovation company.The company declined to comment specifically on Curbio, but said Curbio was completed. 550 jobs in four markets. A review of court filings by the company and Inman shows that the company has not been sued by or against past customers.
Asked if they were concerned about litigation surrounding Curbio, a spokesperson for NAR, which recently partnered with the company, said it has the best interests of its members in mind.
“We evaluate potential partnerships based on their alignment with our strategic objectives and the potential benefits provided to our members,” a spokesperson said in a statement. “Our collaboration with Curbio and all of our other realtor benefits partners is designed with our members’ best interests in mind and we aim to provide them with valuable benefits and services.”
According to the terms of Curbio’s agreement with the association, NAR members can access Curbio’s app for free to generate cost estimates for renovations. For jobs expected to cost at least $10,000, Curbio also provides a free digital floor plan with every proposal.
The high cost of doing business
It remains to be seen how the various legal proceedings regarding Carbio will play out. But it’s clear, at least for now, that Curbio’s rapid growth and long reach have won it some friends and many critics. And sometimes even friends at work end up being lukewarm. Elizabeth Colon, an eXp agent in Florida, said she referred her clients to Curbio based on the convenience the company offers.
“I have to say the job was good,” Colon said. “Everything went well. They had a project manager who was very easy to contact.”
But even if he did a good job, it wasn’t enough to make Colon a repeat customer. That price was higher than other pre-sale renovation options available from subcontractors in her market, she said.
Email Taylor Anderson
