A Bend, Oregon-based homebuilder with projects throughout the Mid-Columbia will pay $1.6 million as part of a settlement with the Washington Attorney General’s Office, but the company is pushing back against justice officials’ characterization of the dispute.

The attorney general’s office said in a statement it agreed to an assurance of discontinuance to end an investigation into Hayden Homes. Justice officials alleged the company placed covenants on homes it built so that owners would have to pay 0.125% of the future sale price to First Story, the nonprofit launched by the company’s CEO. The settlement payment will be used to reimburse homeowners for those fees plus interest.

“Because First Story is so closely associated with Hayden Homes, the AG’s office alleged that the payments essentially allowed Hayden Homes to take money from their client homebuyers and use it to burnish Hayden Homes’ public image,” the statement read.

The company said it believed the charitable covenants were fully lawful and specifically authorized under Washington law. It also objected to the attorney general’s contention that the contributions were to make it look good.

“Hayden Homes has no need to redirect homeowner fees to fund its reputation; its own giving does that many times over,” the company said in a statement. “The purpose of the covenant was to create a lasting tradition of neighbors helping neighbors by encouraging support for local nonprofits in the communities where homeowners lived.”

According to the attorney general, Hayden put community charitable covenants on more than 7,600 Washington state properties that it sold to homebuyers, with the beneficiary being First Story. Charitable covenants are legal in Washington state, but only if the contribution directly benefits the property being sold.

First Story, however, is focused on lending money to people buying other Hayden homes, a program unrelated to the property of the homeowner paying the fee. Homeowners were not apprised of other organizations First Story funneled those contributions to.

The AG’s office also contended the covenants included threats to take legal action against homeowners if they refused to pay the fee, a deceptive practice which violated the Consumer Protection Act, since the fees were legally unenforceable.

Two thousand homeowners paid the fee over the years when selling their home, with some filing complaints with the attorney general’s office. The company is moving to remove all the remaining existing covenants in the state in the next three months.

Hayden Homes stressed that its settlement with the attorney general did not fault either the company or the nonprofit. The company believed the covenants it established were created lawfully. In fact, Hayden said the attorney general’s comments on the settlement conflict with what was agreed to by both parties.

“That difference in interpretation – not any wrongdoing – is what this agreement resolves,” the company said.

Hayden Homes said it will continue its philanthropic efforts through its other established programs, including the Give As You Go Fund and Every Home Gives program. The company has set a goal to invest $25 million in charitable causes by 2030.