Tiny home clients say a Sacramento-area company scammed them. Now, it’s filed for bankruptcy

Anchored Tiny Homes, the fast-growing Fair Oaks family firm that once set sights on a national expansion , before fending off claims that it scammed its clients of millions of dollars , has filed for bankruptcy protection.

The firm owes more than $12.8 million to more than 870 creditors, the Sept. 30 filing in Sacramento federal court shows. With the Chapter 7 filing, the home builder plans to liquidate assets to pay off the debts.

Anchored Tiny Homes’ Austin James Paulhus signed the bankruptcy petition. It lists slightly more than $1.25 million in assets.

It appears an abrupt end to a story that began just five years ago, in 2019. Fair Oaks house builder Colton Paulhus, brother Austin and father, Scott, a general contractor, jumped headlong into the affordable housing market with their tiny homes concept, auxiliary housing units or “granny flats” built on homeowners’ existing property. The price of the 600 to 800-square-foot homes would be between $100,000 and $350,000, with an average price of $185,000.

By 2023, their company had already built 200 homes in Northern California and had contracts for another 300, capitalizing on California’s growing demand for affordable housing and 2019 legislation signed by Gov. Newsom that streamlined cities’ zoning requirements and lifted barriers to tiny home construction.

“Seventy percent of our sales is building auxiliary living units for family use,” Colton Paulhus, the CEO of Anchored Tiny Homes, told The Bee in 2023. “Mom living in the backyard unit, kids coming home from college. And then the remaining is the investors. Homeowners wanting to have more cash flow by renting out auxiliary housing units.”

The Paulhuses planned to take the concept nationwide, selling franchises in Oregon, Utah, Texas, Massachusetts, North Carolina and Florida.

But by 2024, more than 800 of Anchored Tiny Homes’ clients from customers to contractors, employees and franchisees, had joined a Facebook page to lodge complaints, share their stories of aborted and abandoned projects and caution potential new clients from doing business with the troubled company.

The Sacramento Bee spoke to two-dozen clients in an investigation earlier this year.

The name of the group’s Facebook page told the story: “Scammed by Anchored Tiny Homes.”

At least two lawsuits have been filed in Sacramento Superior Court against the company along with complaints to the Contractors State License Board.

“There are people in that group who have paid hundreds of thousands of dollars for absolutely nothing,” Jan Truelock of Roseville, who recounted her troubles with Anchored Tiny Homes in a Bee interview earlier this year. “And they probably will never see that money.”

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