On March 27, 2020, a federal court certified a class to address alleged reverse redlining and violations of consumer protection laws by an Indiana company called Rainbow Realty Group, its owner James Hotka, and associated entities. The decision is a major step toward obtaining redress for people who have been harmed by this program when they thought they were stepping into the American dream of homeownership.

The lawsuit alleges that Defendants use the promise of homeownership to lure people into toxic “rent-to-own” contracts for dilapidated houses in the Indianapolis area. Relman Colfax represents the plaintiff class, which includes over 3,000 current and former Rainbow customers who entered into rent-to-own agreements with Rainbow since 2009, as well as the Fair Housing Center of Central Indiana

In the March 27 decision, U.S. District Judge Robert L. Miller, Jr. certified a class to determine whether Defendants have violated the Fair Housing Act, the Equal Credit Opportunity Act, the Truth-in-Lending Act, and the Indiana Home Loan Practices Act, and to address damages for alleged Truth-in-Lending Act violations. Other aspects of damages will be determined in subsequent proceedings. The court also certified a key component of another state law claim.

The Relman Colfax team is led by Zachary Best, Jennifer Klar, Andrea Lowe, Glenn Schlactus, and Yiyang Wu, with paralegal assistance from Abigail Moats, Isabel Tessier, and Allison Verilli. Cate, Terry & Gookins is local counsel. 

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