More Attorneys General File Complaints Against MV Realty
December 20, 2022
The attorneys general in Massachusetts and Pennsylvania joined Florida in filing complaints against MV Realty, alleging that the company misled consumers over the terms of the brokerage's “Homeowner Benefit Program.”
MV Realty offers to pay up front money to homeowners whether or not they have plans to sell their home. In exchange for between $300 and $5,000, homeowners sign an agreement stating if they decide to sell, MV Realty has the exclusive right to list their home on commission, generally 6% per the agreement. MV Realty operates in 33 states and has more than 500 licensed agents.
ALTA released a statement applauding the attorney generals in these states for their efforts to combat unfair and deceptive practices in the real estate market.
“A home often represents a consumer’s largest financial investment, and their property rights must be protected,” said ALTA CEO Diane Tomb. “Good public policy should support the certainty of landownership by ensuring there are no unreasonable restraints on future ability to sell or refinance property due to unwarranted transactional costs.”
The agreement also states if the homeowner defaults during those 40 years, whether by losing the home through foreclosure, listing the home with another real estate agent or listing it for sale by owner, the homeowner would owe MV Realty an early termination fee equal to 3% of the property’s fair market value. Homeowners also waive their right to be party to a class action lawsuit.
According to Attorney General Healey, MV Realty began doing business in Massachusetts in 2021 and has sold over 500 HBAs to homeowners across almost every county in the state.
“MV Realty’s business model and contract terms are unconscionable, targeting elderly and financially vulnerable homeowners who are short on cash, only to leave them with agreements they don’t understand and can’t get out of,” Healey said. “We are suing to get homeowners out of these contracts, protect our residents from this scheme, and stop this predatory company from doing any more business here in Massachusetts.”
The contract allows MV Realty to place a lien on their home. The attorney general’s lawsuit states that the liens are illegal under Florida law. Moody said the liens often make it difficult or sometimes impossible for the homeowner to refinance or otherwise tap into home equity. Additionally, the company uses abusive and deceptive telemarketing practices, including calling millions of people on the National Do-Not-Call Registry and leaving millions of unwanted, pre-recorded voicemails, according to Moody.
Additionally, the Philadelphia City Council held a hearing on Dec. 14 to investigate the “Homeowner Benefit Program.”
ALTA has prioritized combating this abusive and anti-consumer activity in the marketplace, which adds costs and complications to the transfer or financing of real estate. ALTA has worked with national stakeholders to design model legislation to make these types of unfair agreements unenforceable, prevent the recording of the agreements in land records and provide consumers with options for seeking damages.
Currently, close to a dozen states are considering introducing legislation in 2023 on this issue.
Contact ALTA at 202-296-3671 or [email protected].