Reading the letter sent to tenants and homeowners, imo the key takeaway in the communication seems to be they are transferring the headache of navigating evictions during COVID of nonpaying tenants to the homeowners.
Tough time to be a landlord in an already tenant-friendly state during an economic downturn.
I would say the main issue is that they billed tenants for utilities, yet did not pass the money on to the utility company. Imagine your electricity being turned off after you paid for it, due to a money-burning VC-funded middleman eating up your payments.
> they billed tenants for utilities, yet did not pass the money on to the utility company
That would seem to be criminally fraudulent behavior.
Also, the article mentions:
> That Sept. 23 letter also stated that tenants would not be responsible for paying October rent as their security deposits would be covering that. This posed a problem for anyone set to leave at the end of this month...
Not being able to return a tenant's security deposit could also be criminal behavior. Don't most states have laws saying that a security deposit is the tenant's money, and has to be kept in an escrow account with the tenant's name on it?
And:
> What’s more, HubHaus continued to bill tenants for services that were discontinued during the shelter-in-place, such as housecleaning.
More fraud.
The tenants might want to file complaints with the state Attorney General's office.
Addendum: I looked HubHaus up on Crunchbase[1] to find out who their VCs are:
Their Series A funding ($12M) came from a firm called "Social Capital", whose mission is "to advance humanity by solving the world’s hardest problems".[2]
Also interesting: HubHaus's web site is still up, offering rooms for rent.[3]
Other key takeaways are they've been taking the renter's money, but not using that to pay the bills and they've already spent everyone's security deposits. Sounds like pretty rough situations all around.
Tough time to be a landlord in an already tenant-friendly state during an economic downturn.