FDD Items 3 & 4 · 2026 filing
HomeSmart litigation history
What HomeSmart 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 & 4 at a glance
What the filing discloses
- Cases disclosed
- 4
- Item 3, as counted in the filing
- Largest disclosed settlement
- $4.7M
- 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
Washington State AOD (2020) re no-poaching provisions; Umpa v. HomeSmart et al. (W.D. Mo., filed 2023, antitrust class action re MLS commissions, settled 2024 for $4.7M plus practice changes); Boykin v. HomeSmart et al. (D. Nev., 2024, similar antitrust claims, resolved via Umpa settlement); Zawislak/D'Acquisto v. HomeSmart et al. (N.D. Ill., antitrust claims re inflated home prices, pending, HomeSmart denies wrongdoing).
Disclosure signals that moved the score
How this shows up in the verdict
- Significant litigation portfolio including tortious interference, class action MLS disputes, TCPA violations, and no-poaching Assurance of Discontinuance—indicating operational and compliance risks
- Going concern notation suggests parent company financial stress despite 14.5% unit growth, raising sustainability questions
- Modest unit growth (262 units, 14.5% YoY) in mature real estate franchise segment; growth rate does not offset litigation and disclosure gaps
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?