A group of Washington home sellers will get more than $1.5 million in refunds after an Oregon-based homebuilder charged them illegal fees, according to the Washington state attorney general’s office.
The developer, Hayden Homes, required people who bought their homes and later sold them to pay a fraction of the property’s sales price to a nonprofit lender the developer founded, according to the attorney general’s office.
“Under Washington law, no one can force you to pay fees to a third party when you sell your home,” Attorney General Nick Brown said in a statement.
Hayden Homes defended its practices and did not admit wrongdoing.
The company builds and sells homes across Idaho, Montana, Oregon and Washington, mostly in smaller cities and rural areas, according to its website, with current listings in Central Washington, Walla Walla, the Tri-Cities and Spokane.
In addition to building homes, Hayden Homes also founded a nonprofit lender, First Story, which offers first-time homebuyers with moderate incomes loans on Hayden Homes properties.
According to the attorney general’s office, when Hayden Homes sold a newly built home, the builder made a payment directly to First Story. Then, in case of a resale, the developer required the home seller to pay a fee that First Story then distributed to other local nonprofits.
The attorney general’s office argued the fees violated the state Consumer Protection Act and “essentially allowed Hayden Homes to take money from their client homebuyers and use it to burnish Hayden Homes’ public image.”
Hayden Homes disputed those claims.
While we strongly disagree with the Washington Attorney General's characterization of our practices, we remain committed to supporting communities in Washington and across the Northwest," CEO Dennis Murphy said in a statement.
"Every dollar collected through the covenant was distributed to qualified nonprofits in the counties where they originated," Murphy said.
The company said it disclosed the covenants and removed them "whenever a homeowner requested it."
In a settlement agreement with the state, Hayden Homes and First Story did not admit fault or agree that the payments were illegal but agreed to the terms to avoid further controversy and expense, and to provide refunds to all consumers.”
Hayden Homes placed covenants requiring the fees on more than 7,600 properties between 2006 and 2025, and more than 2,000 Washington residents paid the fees, according to the attorney general’s office.
The fees amounted to 0.125% of a property’s sale price, or $375 on a $300,000 house.
The settlement agreement avoids a lawsuit and requires Hayden Homes to pay $1.6 million in refunds and interest, plus attorney’s fees, and to stop charging the fees and remove the covenants from any properties in Washington.
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