An incomplete construction site plagued by delays and financial issues.
Tracie J. Kelley, owner of KellCo Custom Homes in Little Rock, is facing multiple lawsuits from couples alleging fraud and financial mismanagement related to custom home projects. Accusations include significant delays, cost overruns, and misappropriation of funds. The Arkansas Contractors Licensing Board has issued a cautionary letter and fine against Kelley amid growing complaints, raising concerns about her business practices and the integrity of the custom home building industry.
Tracie J. Kelley, a builder based in Little Rock, Arkansas, and her company, KellCo Custom Homes Inc., are entangled in a web of fraud allegations put forth by several couples who claim they never got to move into their highly anticipated million-dollar homes. As legal complaints pile up, concerns are growing over the future of KellCo and Kelley’s credibility in the custom home building sector.
The most alarming lawsuits against Kelley come from Drs. Matthew and Hannah Henson Williams. They hired KellCo to construct a $1.2 million home expecting completion within eight months. However, the process was marred by significant delays, with costs escalating by at least $500,000. The Williamses allege that Kelley misappropriated loan funds designated for their home, channeling them into other projects instead. Furthermore, they reveal that their home was listed for sale despite contractual obligations preventing Kelley from doing so.
Continuing the trend, the Pulaski County couple, Daniel and Ellen Williams, has lodged a separate lawsuit after reportedly paying $1.6 million for their incomplete home. They claim that Kelley assured them their contract would be canceled and their money refunded. However, they indicate that only $310,000 was returned, with Kelley subsequently moving into the home herself.
In a related development, the Arkansas Contractors Licensing Board has issued a letter of caution to Kelley, accompanied by a $500 fine. This caution stemmed from Kelley’s failure to disclose ongoing litigation when renewing her license earlier this year. Despite the growing legal troubles, Kelley’s contracting license remains valid, although the Licensing Board has indicated it would revisit the decision if further complaints arise.
In May 2025, Kelley and her company agreed to a foreclosure decree related to loans amounting to $1.4 million. These loans pertained to four homes they were in the process of constructing. This financial stress underscores the severity of the issues surrounding KellCo, further complicating Kelley’s situation.
The accusations do not stop at financial mismanagement. Clients claim Kelley engaged in fraudulent behavior by failing to pay subcontractors after receiving funds for specific construction tasks. This has raised serious questions about Kelley’s business practices and overall trustworthiness as a builder.
The troubling signs started surfacing back in 2022 when the Williamses first filed their lawsuit against Kelley. Complaints about construction delays and inadequate progress became prevalent, and Kelley’s problems are not isolated to these two couples. Other clients, like Cliff and Brenda Palm, have also voiced concerns. They filed a lawsuit in August 2023 citing negligent construction and breach of contract, claiming they had to spend an additional $50,000 on repairs due to Kelley’s failure to fulfill her obligations in their $475,000 home.
These clients allege many unfulfilled promises, including the absence of quality updates regarding the progress of their construction projects. Such disregard for contract terms could further exacerbate Kelley’s legal woes as her credibility continues to be scrutinized.
The ramifications of these allegations extend beyond just Kelley and her company. The newly appointed state director of USSSA acknowledged the various complaints regarding services during community events, illustrating that the issues of trust and quality in construction and services are part of broader concerns affecting many organizations and individuals.
As the situation develops, the construction industry and potential homebuyers in Arkansas are left wondering about the integrity of builders like Kelley and how such issues can be avoided in the future. With each new allegation, the stakes continue to rise for both Kelley and her clients, drawing attention to a critical need for accountability in the custom home building sector.
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