San Francisco-based “co-living platform” HubHaus has collapsed, saying it has no funds, leaving people using its platform to rent rooms in the Bay Area, Los Angeles, and Washington DC, in limbo. From a report: HubHaus’ business model seemed simple enough: lease large, single-family units and then cut them up into as many rooms as possible in order to sublet each room. Upon closer examination, however, there seem to have been numerous red flags. In interviews with tenants, the San Francisco Chronicle found that they were still being charged for services (e.g. housekeeping) that were no longer provided and some were charged double their rent after setting up auto-pay. Landlords told the Chronicle that HubHaus stopped paying for utilities and slashed its leasing payments to them. One former employee also reported that the company consistently paid him less than he earned or would pay him late, causing financial hardship that led him to quit. In a September 30 letter sent to homeowners and tenants, and obtained by the Chronicle, HubHaus owner Diablo Management Group said “HubHaus is completing a liquidation and closure of the company.” As part of that process, an analysis by Diablo found there were “no funds available to pay the claims of unsecured creditors (e.g., claims by landlords, tenants, trade creditors, or contractors).”

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Source: Slashdot – A San Francisco ‘Co-Living’ Startup Suddenly Shut Down, Leaving Tenants In Limbo