Attorney General Ken Paxton announced on Thursday that he has filed a lawsuit against the residential development of Colony Ridge for allegedly participating in fraud, deceptive trade practices, and multiple other state law violations.
A news release about the lawsuit sent to The Dallas Express states that the Office of the Attorney General conducted an investigation into the community and discovered “numerous false, misleading, and deceptive sales, marketing, and lending practices that enabled their business model.”
The lawsuit alleges that Colony Ridge “lies in a multitude of ways about the conditions that those buyers will experience on the property,” further stating that the conditions often “preclude the buyer from actually making any practical use of the land.”
“The result is that the buyer, having discovered that they cannot meaningfully use the land, defaults on the land financing at jaw-dropping rates. Colony Ridge then forecloses on the buyer, re-possesses the land having lost nothing, and then turns around and sells the same land again to another unsuspecting buyer with the same deceptive set of misrepresentations,” it reads.
“At best, consumers struggle with unexpected financial burdens for years to avoid foreclosure, to the benefit of Colony Ridge and its pernicious business model.”
The lawsuit further details the “jaw-dropping rates” of foreclosure, citing numbers given by a Colony Ridge representative to the Texas Senate.
This representative stated that the foreclosure rate among Colony Ridge landowners is 12%, which is roughly 50 times greater than the national average of 0.26%, according to the OAG lawsuit.
Additionally, the lawsuit alleges that Colony Ridge markets the properties as “move-in ready” during the process and “assures wary consumers that, at most, they will only have to pay a few hundred dollars to the utility provider to set up an account.”
However, the complaint states that buyers often end up having to wait months or even years to benefit from city services, which sometimes cost them dearly.
“Further, if any utility infrastructure exists at all, many of the properties require thousands of dollars in improvements, if not tens-of-thousands. Buyers are literally required to install such things as transformers or light poles before they are even allowed to occupy the land they purchased,” the lawsuit reads.
Paxton said in the release that the community has been “flagrantly violating Texas law” and “profited from targeting consumers with fraudulent claims and predatory lending practices.”
“Their deceptive practices have created unjust and outsized harms. Nearby communities have borne a tremendous cost for the scheme that made Colony Ridge’s developers a fortune,” he added.
Colony Ridge has become one of the most discussed communities within the Lone Star State due to a plethora of concerns, such as the presence of drug cartels leading to high crime.
These concerns have prompted hearings in both the Texas House and Senate to discuss the allegations, with witnesses and the development’s owner, John Harris, pushing back against the claims, as previously reported by The Dallas Express.
Harris has previously stated that the allegations about the development are “grossly misleading and unsubstantiated,” adding that the community does not suffer from high crime due to having “the highest number of officers per capita in Liberty County.”
