HubHaus, a venture-backed co-living startup, has officially ceased its operations, leaving tenants and landlords confused and unsettled about the future of their leasing agreements.

Closure and Confusion

Reports suggest that HubHaus had been facing financial challenges for several months, failing to make full payments to homeowners while continuing to charge tenants for services it did not deliver. Despite requests for comment from various media outlets, the company has remained silent on the matter.

HubHaus members were informed of the company’s decision to terminate its business through an email sent last month. The email, obtained by Mission Local reporter Joe Eskenazi, outlined the commencement of a formal closure and liquidation process managed by Diablo Management Group.

Uncertainty and Legal Concerns

The closure has left hundreds of tenants and homeowners uncertain about the status of their leasing agreements, which were previously managed by HubHaus. Some tenants are unsure if they can continue renting from the homeowners, sparking discussions about potential legal protections against eviction on platforms like Reddit and Facebook.

Past Challenges and Financial Struggles

HubHaus, founded in 2016 by former medical student Shruti Merchant, aimed to foster community among tenants while providing luxurious housing options. Despite raising approximately $11 million since its inception, the company faced challenges in meeting growth targets and securing additional funding.

Even before the onset of the pandemic, HubHaus encountered difficulties, including layoffs and an inability to raise further funds in 2019. The economic impact of COVID-19 further exacerbated its financial woes, leading to the company’s ultimate shutdown.

Industry Challenges and Impact

The pandemic significantly affected co-living companies, with rental costs plummeting and individuals becoming hesitant to live with strangers. HubHaus joins other startups like Stay Alfred and Zeus Living, which also faced closures and layoffs in response to the pandemic’s effects on the rental market.

As HubHaus grapples with its closure, creditors and shareholders have been notified that the company lacks sufficient funds to settle claims from unsecured creditors, including landlords, tenants, trade creditors, and contractors. The aftermath of HubHaus’ shutdown underscores the challenges faced by startups in the co-living sector amidst evolving market dynamics and economic uncertainties.