A woman in Roseville, California, who paid more than $40,000 in January 2023 to have a small home built in her backyard, was left without the house after the company failed to begin construction within the promised 12 months. Three years later, brothers Austin and Colton Paulhus, founders of Anchored Tiny Homes, are facing 35 felony charges each following an investigation into more than 200 complaints across 18 California counties. Homeowners alleged that they had paid for houses that were either left unfinished or never built.
Jan Truelock is a retired nurse from Roseville who had hired the company to build a 450-square-foot home behind her house, as per a report by Realtor. Such homes are known as accessory dwelling units (ADUs), which are smaller residential units built on the same property as an existing house. Truelock expected her new home to be ready in 12 months, as the company had promised. But the months went by without any construction.
According to Truelock, she tried contacting the company several times to find out what was happening, but getting a response to her calls and emails became difficult.
As per her account, by the time a year had passed, she had paid thousands of dollars but had nothing built in her backyard.
Truelock eventually decided to cancel the agreement and asked for her money back. However, she claimed the company offered to return only $5,000 and told her that $17,000 had been spent on building materials, although she said she had never seen any of them.
Truelock takes legal action
With no home and no full refund, Truelock hired a lawyer and sued the company for breach of contract. She eventually reached a settlement for $25,000, which still left her short of the amount she had originally paid.
She later hired another company, Imkat, to build the home. This time, the work was completed. But while Truelock finally got the additional living space she wanted, she learned that several other customers had been left in much more difficult situations.
Some had paid far more than she had, while others were living with unfinished construction on their properties. Speaking to Realtor.com about the criminal case against the company's founders, Truelock said, “I’m very glad they are finally held accountable.” “Accountability at this juncture would be prison time for Colton and Austin,” she added.
Families affected by the delays
One of those customers awaiting her home was Katie Lucas, who wanted to build a separate home for her mother-in-law and grandmother in San Leandro, California.
In 2022, Lucas paid Anchored Tiny Homes $211,000 for the project. Work began, but it stopped before the house was finished.
Lucas told KCRA that she had made payments whenever the company sent her invoices. Later, however, contractors informed her that they had not been paid. She also said the company stopped answering her calls.
When Lucas shared her experience online, she found that other homeowners were reporting similar problems. They came together in a Facebook group that, at one point, had more than 1,000 members.
Another customer, Renee Kumamoto, had hoped to build a home for her father, who was battling cancer. She paid $168,000 to Anchored Tiny Homes, but construction never started.
According to Kumamoto, the company went out of business just two weeks after she made her final payment.
35 Felony charges against brothers
As complaints continued to emerge, California's Contractors State License Board (CSLB) began investigating the company.
According to the California Statewide Law Enforcement Association (CSLEA), the board revoked Anchored Tiny Homes' contractor licence in November 2024. However, complaints continued even after the company shut down. Investigators continued examining the cases and worked with the Sacramento County District Attorney's Office to refer them for possible criminal charges.
According to the criminal complaint, brothers Austin and Colton Paulhus allegedly collected more than $1 million from customers for 13 projects without carrying out the required work or supplying materials.
Prosecutors also allege that more than $653,000 was taken from company accounts for expenses unrelated to construction projects.
Each brother now faces 33 charges involving the alleged misuse of construction funds, one charge of conspiracy to commit a crime and one charge of employee wage theft.
The brothers appeared virtually in court on October 14, but neither entered a plea. Both are also seeking bankruptcy protection in federal court. The allegations have not yet been decided by the court.
The next settlement conference is scheduled for January 12. Austin Paulhus' lawyer, Blair Goss, told NBC Bay Area that his client was willing to cooperate with investigators. He declined to say whether Austin would testify against his brother.
For homeowners who paid for projects that were never completed, recovering their money remains a major concern. “I have doubts that anyone else will get any of their money back,” Truelock said.