FDD Items 3 & 4 · 2026 filing

Epcon Communities litigation history

What Epcon Communities disclosed about lawsuits, arbitrations and bankruptcy in the 2026 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.

Items 3 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 5; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: $2.2M; As stated in Item 3

Bankruptcy (Item 4): None; Franchisor, parent, predecessor or officer

Filing year: 2026; Disclosures cover the prior ten years

Extracted from the 2026 Franchise Disclosure Document

Item 3: litigation

Five concluded cases: (1) Price v. Epcon Communities et al. - plumbing defect claims, settled $95,000 ($35,000 paid by Epcon entities); (2) Marrington Villas at Cobblestone Association v. Epcon - construction defect/fraud claims, settled $1,000,000; (3) Lipari v. Epcon Nantz Road - fraud/misrepresentation re: drainage and lake access, settled $52,500 plus drain installation; (4) M.E. Stores Property v. Epcon Nantz Road - dust/nuisance property damage claim, settled $25,000 total ($22,000 paid by Epcon); (5) Fair Housing Advocates Association/HUD/DOJ v. Epcon Communities re: ADA/Fair Housing accessibility violations at multiple Ohio projects, resolved via Consent Decree with $2,200,000 retrofit fund, $51,303 civil penalty, $40,000 settlement to FHAA, and $300,000 fund for aggrieved persons.

Item 3 (litigation) · 5 matters disclosed

Litigation cases

The franchisor

Concluded (1)

Fair Housing Advocates Association v. Epcon Communities, Inc., et al. (HUD Case No. 05-12-0088-8) and Assistant Secretary of Fair Housing and Equal Opportunity (“FHEO”) v. Epcon Communities, Inc. (HUD Case No. 05-13-0010-8); consolidated within United States of America v. Epcon Communities, LLC and
concluded
Government or regulatory action · filed 2011 · U.S. Department of Housing and Urban Development, Fair Housing Office (Midwest Region, Region V); consolidated in the United States District Court, Southern District of Ohio, Eastern Division · HUD 05-12-0088-8 (Inquiry No. 329941); HUD 05-13-0010-8 (Inquiry No. 349829); 2:19-cv-4601
“Inquiry No. 329941 and Assistant Secretary of Fair Housing and Equal Opportunity (“FHEO”) v. Epcon Communities, Inc., HUD Case No. 05-13-0010-8, Inquiry No. 349829; United States of America v. Epcon Communities, LLC and Epcon Communities Franchising, Inc., Case No. 2:19-cv-4601 (United States District Court, Southern District of Ohio, Eastern Division, filed October 17, 2019).”Page 14 of the 2026 FDD, Item 3
Outcome: “The parties entered into a Consent Decree settling the matter on March 25, 2020. The Consent Decree has a term of three (3) years from the date of its entry and subjects ECFL and Epcon LLC to the following: (i) an injunction from discrimination on the basis of disability as prohibited by the Fair Housing Act, 42 U.S.C.” (page 15)

Parent, affiliates, master franchisor and subfranchisor

Concluded (4)

Robert Price and Linda Price v. Epcon Communities, LLC, Epcon Marrington, LLC, Epcon Communities North Carolinas, LLC, and Jenkins Plumbing Company, LLC
settled
Epcon Communities, LLC; Epcon Marrington, LLC; Epcon Communities North Carolinas, LLC · filed 2022-08-18 · Court of Common Pleas for the Ninth Judicial District, Berkeley County, South Carolina · 2022-CP-0801974
“… Case No. 2022-CP-0801974 in the Court of Common Pleas for the Ninth Judicial District, Berkeley County, South Carolina. Litigation commenced August 18, 2022.”Page 13 of the 2026 FDD, Item 3
Outcome: “This matter settled in November, 2024 and defendants agreed to pay plaintiffs $95,000, of which $35,000 was paid by the Epcon entities, and the remainder by subcontractors of the Epcon entities. This matter is concluded.”
Marrington Villas at Cobblestone Association, Inc. v. Epcon Communities, Inc., n/k/a Epcon Communities, LLC, Epcon Communities Carolinas, LLC, and Epcon Marrington, LLC
settled
Epcon Communities, LLC (f/k/a Epcon Communities, Inc.); Epcon Communities Carolinas, LLC; Epcon Marrington, LLC · filed 2021-06-14 · Circuit Court for the Ninth Judicial Circuit, State of South Carolina, County of Berkeley · 2021CP0801194
“… Case No. 2021CP0801194 in the Circuit Court for the Ninth Judicial Circuit, State of South Carolina, County of Berkeley. Litigation commenced June 14, 2021.”Page 13 of the 2026 FDD, Item 3
Outcome: “This matter settled in August, 2024 as to the Epcon defendants with a payment of $1,000,000 to plaintiffs. This matter is concluded.”
M.E. Stores Property, LLC v. Epcon Nantz Road, LLC, Epcon Communities Carolinas, LLC, Epcon Communities, LLC et al.
settled
Epcon Nantz Road, LLC; Epcon Communities Carolinas, LLC; Epcon Communities, LLC · filed 2020-10-28 · General Court of Justice Superior Court Division of Mecklenburg County, North Carolina; removed to the United States District Court for the Western District of North Carolina · 20-CVS-14594 (removed: 3:20-CV-631)
“… Case No. 20-CVS-14594 in the General Court of Justice Superior Court Division of Mecklenburg County, North Carolina. Litigation commenced on October 28, 2020.”Page 14 of the 2026 FDD, Item 3
Outcome: “The case was settled for total payments of $25,000 by defendants of which the Epcon defendants paid $22,000. The Notice of Voluntary Dismissal was filed on June 15, 2022. This matter is concluded.”
Lipari v. Epcon Nantz Road, LLC, et al.
settled
Epcon Nantz Road, LLC; Epcon Communities, LLC; officers Philip G. Fankhauser and Edward A. Bacome named as defendants · filed 2019-01-07 · Superior Court Division of Mecklenburg County, North Carolina · 19-CVS-93
“… Case Number 19-CVS-93, in the Superior Court Division of Mecklenburg County, North Carolina. This case was filed on January 7, 2019. The defendants include Epcon Communities, LLC, Philip G. Fankhauser and Edward A. Bacome, as well as other parties.”Page 14 of the 2026 FDD, Item 3
Outcome: “The settlement agreement provided that Epcon Nantz Road, LLC agreed to pay to Mr. and Mrs. Lipari the amount of $52,500, Epcon Nantz Road, LLC agreed to install up to two (2) yard drains in the Liparis’ side yard and/or back yard to connect to the main storm drainage system for the community, and the parties agreed to mutual releases of all claims. This matter is concluded.”

Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.

Disclosure signals that moved the score

How this shows up in the verdict

Construction defect litigation across multiple projects (Price, Marrington Villas, Lipari) indicates systemic quality/delivery issues

The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.

Before you weigh a lawsuit

How to read Item 3

A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.

Questions worth asking current and former franchisees, using the contact list in Item 20:

Were you, or anyone you know in the system, party to a dispute with the franchisor?
Was it resolved by settlement, arbitration or a court, and on what terms?
Has the number of disputes gone up or down since you signed?

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