Westside homebuyer reaches tentative settlement in Divvy Homes lawsuit

Matthew Cardinale, a homebuyer who’s been embroiled in a lawsuit with his rent-to-own landlord Divvy Homes, reached a tentative settlement this week with the company, signaling a possible end to the legal melee.

Divvy, a San Francisco-based tech startup, recently introduced to Atlanta its unique spin on homebuying. The company’s high-profile squabble with Cardinale recently shed light on the struggles some Atlantans are facing when trying to find creative ways to enter the homebuying fold.

Unlike typical rent-to-own operations, which largely exist to help lower-income people work toward homeownership when credit is too poor to secure a mortgage, Divvy allows people to pick out their homes, rent for a few years, and then buy at a predetermined price.

Cardinale, who publishes local politics blog Atlanta Progressive News, identified a house he liked in Westside Atlanta’s Hunter Hills neighborhood, knowing the area was primed to see property values jump in years to come.

In February, he contracted to eventually buy the property from Divvy for about $146,000—after a few years of renting from the company, granted.

Divvy, however, might not have understood how low a price tag that is, especially considering the impact the Beltline’s nearby Westside Trail will likely have on the neighborhood.

Cardinale has told Curbed Atlanta he knew his new place was going to be a fixer-upper before he moved in. But, after he had Divvy make some $12,000 worth of fixes to bring the structure up to housing code, the company seemed to realize it was likely to lose money on the home and stopped working on it, he said.

So, in early April, Divvy sued Cardinale, hoping to void their lease, claiming, among other complaints, that his experience as a self-proclaimed housing advocate meant he’d entered into the lease agreement in poor faith.

“Cardinale appears to have entered into the lease for purposes of his own agenda as a housing advocate and not in a good faith effort to pursue homeownership under the Divvy Homes program,” according to legal documents provided by Divvy.

Divvy retained law firm Troutman Sanders to handle the lawsuit, while Cardinale, a recent law school graduate, was prepared to represent himself. They were set to spar in Fulton County Superior Court on May 25, but, Cardinale told Curbed, the judge was feeling under the weather, and the hearing was postponed.

On Monday, just a day before the rescheduled court date, Cardinale announced on Facebook that he and Divvy had come to a tentative settlement agreement, and that a “joint statement [is] coming in a week or two with good news to report.”

Cardinale told Law.com he feels confident the final settlement agreement will pave the way for him to one day purchase the home.

• Court battle brews between new Westside homeowner and rent-to-own company [Curbed]
• Law Student Settles With Landlord Over Repair Demands [Law.com]