UPDATE: This article has been updated since publication to include a statement from Colony Ridge. 

Attorney General Ken Paxton sued housing development company Colony Ridge today for “deceptive trade practices, fraud in real estate transactions, and other violations of Texas and federal law.”

Colony Ridge—which was also sued by the Department of Justice late last year for using “bait and switch” predatory loans—is located northeast of Houston in Liberty County.

In an October 2023 letter addressed to members of the U.S. Congress, Paxton wrote that “The development appears to be attracting and enabling illegal alien settlement in the state of Texas and distressing neighboring cities and school districts.”

“Complaints from nearby communities about the development’s scale of growth and unmanageable externalities reveal that this unincorporated settlement has drawn far too many people and enabled far too much chaos for the current arrangement to be tolerated by the state,” the letter also noted.

According to the lawsuit, which was filed today, Colony Ridge profits by targeting foreign-born and Hispanic customers who have little to no access to credit with promises of cheap financing options and ready-to-build land without requiring them to have proof of income.

The result is customers defaulting on land financing at “jaw-dropping rates” once they discover that they cannot meaningfully use the land.

“Colony Ridge then forecloses on the buyer, repossesses 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,” the lawsuit explains. “At best, consumers struggle with unexpected financial burdens for years to avoid foreclosure, to the benefit of Colony Ridge and its pernicious business model.”

A press release from Paxton’s office states that Colony Ridge’s business practices have led to a foreclosure rate 50 times the national average in 2023.

Colony Ridge’s business practices have been called into question for months.

Also in December, the developers of Colony Ridge awarded more than $16 million in taxpayer dollars to a paving company called Liberty Paving LLC that likely has close familial ties to Colony Ridge board members.

“There is nothing new in the Texas Attorney Generals Lawsuit. Colony Ridge complies with the law. Full stop,” Colony Ridge CEO John Harris told Texas Scorecard.

“Our customers buy land from us because they want to live here. They want a chance to build a home for themselves and their children but are shut out of just about every opportunity to do so – and we give them that chance. We cater to a segment of society that simply wants to experience the American dream and we help them achieve that dream,” said Harris.

“We will be reviewing the specifics of this lawsuit with our attorneys and look forward to sharing the true story about Colony Ridge,” added Harris.

Will Biagini

Will was born in Louisiana and raised in a military family. He currently serves as a journalist with Texas Scorecard. Previously, he was a senior correspondent for Campus Reform.