Background
The practice of submitting Non-Title Recorded Agreements for Personal Services (NTRAPS) for inclusion in property records characterized as liens, covenants, encumbrances, or security interests in exchange for money has recently emerged throughout the country. These agreements obligate the current owner to use the other party’s services in the future, and further attempt to bind successor owners by purporting to create a real property interest. Failure to comply with these agreements may give rise to a lien against the property to secure liquidated damages.
ALTA Position Statement
The American Land Title Association (ALTA) supports efforts to protect consumers by prohibiting the filing of unfair real estate fee agreements in property records, a practice that creates impediments and increases the cost and complexity of selling, refinancing, or transferring real estate. ALTA advocates for state laws and regulations preventing enforcement of Non-Title Recorded Agreements for Personal Services (NTRAPS).
State Legislative Tools
State Regulatory Action
Florida
Indiana
Massachusetts
New Jersey
North Carolina
Ohio
Pennsylvania
California
States that have Enacted NTRAPS Legislation
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NTRAPS Articles
California Becomes Latest State to Sue MV Realty
California became the seventh state to file a complaint against MV Realty, alleging the company misled consumers over the terms of the brokerage's “Homeowner Benefit Program.”
State, National Efforts Could Protect Homeowners from Predatory Liens
I’ve got some good updates about a national and Ohio effort to stop what has been called a predatory act by some companies to offer quick cash in exchange for an exclusive agreement to sell a home for 40 years.
Brokerage Firm Hit With Lawsuits Files for Bankruptcy
Facing lawsuits from attorneys general in six states, MV Realty filed for Chapter 11 bankruptcy protection in 33 states.
Entrapment is the Name of the Game
Non-Title Recorded Agreements for Personal Services (NTRAPS) were first identified in Florida in 2017. The majority of the 25,000 cases in 32 states currently on record happened in 2022, according to the title agents and consumer protection advocates investigating this elusive scam. “The scope is large, although I always say, just one is unacceptable when you’re talking about an unfair agreement that can have such a devastating impact on a consumer,” said Elizabeth Blosser, vice president of government affairs at the American Land Title Association (ALTA), which joined forces with AARP last year to draft legislation addressing NTRAPS.
Indiana Joins List of States Filing Complaints Against MV Realty
Indiana became the sixth state to file a complaint against MV Realty, alleging the company misled consumers over the terms of the brokerage's “Homeowner Benefit Program.”
Agencies Warn Homeowners of 'Predatory' Agreements
The American Land Title Association (ALTA) and AARP came together Wednesday with a warning about what they called predatory agreements aimed at homeowners. The agreements are known as Non-Title Recorded Agreements for Personal Service (NTRAPS) and came into the groups’ radar last year when they were flagged by a number of title agents.
Nevada Just Outlawed a Predatory Title Scheme, but not Before 800+ Homeowners Fell for It
It works like this: Someone thinking about selling their home heads to the internet to look for some info. They see an advertisement offering a free market analysis — actually, it’s better than free, because this company is offering to pay the homeowner now, a show of how seriously they want to build a relationship with you.
U.S. Senators Press MV Realty for Info About Alleged Predatory Business Practices
Several U.S. senators recently sent a letter demanding answers from MV Realty about its current legal scrutiny over allegations of predatory business practices targeting older adults, people of color and people with disabilities. The letter seeks information about MV Realty’s Homeowner Benefit Program (HBP), which court documents have alleged misleads and unfairly targets consumers.
Nevada Passes Law Protecting Homebuyers from Predatory Contracts
ALTA, the AARP and the Nevada Land Title Association (NLTA) applauded Nevada for passing the legislation. Nevada joins 13 other states that have passed versions of bills that address Non-Title Recorded Agreements for Personal Services (NTRAPS).
Ohio, Maine Pass Bills Banning Unfair Real Estate Fee Agreements
Other states to pass versions of bills that address Non-Title Record Agreements for Personal Service include Alabama, Colorado, Florida, Georgia, Idaho, Iowa, Maryland, North Dakota, Tennessee, Utah and Washington.
Protecting Homeowners from Predatory Business Practices
During National Homeownership Month, homeowners should be wary of a new business practice preying upon vulnerable homeowners — non-title recorded agreements for personal service (NTRAPS), long-term listing agreements that entrap consumers, writes ALTA Vice President of Government Affairs Elizabeth Blosser.
Maryland Passes Bill Banning Unfair Real Estate Fee Agreements
Maryland joined a growing list of states to pass legislation that protects homeowners from the predatory practice of filing of unfair real estate fee agreements in property records, known as Non-Title Record Agreements for Personal Service (NTRAPS). The legislation, which goes into effect June 1, is supported by ALTA, the Maryland Land Title Association (MLTA), AARP and AARP Maryland.
States Introducing Legislation to Stop Deals Similar to Those Made by MV Realty
Pennsylvania’s attorney general and others across the county sued MV Realty and the company voluntarily gave up its practice. Now, an industry organization is taking action. “It’s very disconnecting to see business models that seek to siphon people’s home equity,” said Elizabeth Blosser with the American Land Title Association. “Our primary purpose is to protect people’s property rights.”
5 More States Pass Legislation Banning Unfair Real Estate Fee Agreements
Colorado, Georgia, Tennessee, Idaho and North Dakota became the latest states to pass legislation protecting homeowners from the predatory practice of filing of unfair real estate fee agreements in property records, known as Non-Title Record Agreements for Personal Service (NTRAPS). ALTA has prioritized combating this abusive and anti-consumer activity in the marketplace, and worked with national stakeholders to design model legislation to ban this practice.
N.C. Becomes Fifth State to Sue Brokerage Firm Over Right-to-list Agreements
North Carolina became the fifth state to file a lawsuit against real estate firm MV Realty alleging that the company violated laws prohibiting unfair and deceptive practices by tricking homeowners into signing 40-year real estate agreements. 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.
Massachusetts Court Orders MV Realty to Stop Recording 40-year Liens
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. Utah became the first state that passed legislation protecting homeowners from the predatory practice of filing of unfair real estate fee agreements in property records. ALTA helped draft the bill with input from national stakeholders.
Ohio AG Joins Other States Filing Lawsuits Against MV Realty
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. Seven states have already introduced legislation this year to address this issue.
Real Estate, Right to List Agreements, and Rumpelstiltskin
As firms look to modernize and revamp the way we buy and sell homes, some companies have turned to cash incentives and right to list agreements to generate new business. The most notable firm taking this route is MV Realty with its Homeowner Benefit Program. This caught the attention of the American Land Title Association, whose CEO Diane Tomb said the trade group is concerned about the duration and enforcement of these agreements, as well as consumer understanding of their implications.