Homeowners obligated to pay fees to sell their homes for 40 years
of ConsumerAffairsCalifornia Attorney General Rob Bonta has obtaineda preliminary injunction against MV Realty, a Florida-based company that engaged in what Bonta called a predatory real estate scheme calledHomeowner Benefit Agreements.
Bonta said the company lured vulnerable homeowners looking for financial help with an immediate payment and then lockedthem into the agreement, which he said required homeowners toexclusivelyuse MV Realty to sell their homes for the next 40 years or pay a penalty of 3% of the homes value.
MV Realty also placed illegal liens on homes and charged homeownersthe 3%penaltyto remove the lien, Bonta chargged.In addition to blocking home transfers, the lien could impede, delay, or prevent a homeowner from obtaining or refinancing home loans.
To the nearly 1,500 California homeownerswho were tricked intoentering intotheunlawfullisting agreements with MV Realty, today is a good day, Bonta said.The courtfound thatwe are likely to prevail on ourclaimthatthose homeownerswereintentionallymisled by MV Realty.The court also found that MV Realtys conduct imposed imminent irreparable harm tohomeowners. As a result, the company is being orderedto stop violating state law,once again allowing homeowners the freedom to do with their property what they wish."
Problems in other states
MV Realty currently faces lawsuits in multiple states for allegedly misleading consumers and homeowners. In addition, the Florida-based firm has been essentiallybanned from operatingin 14 statesthrough legislation.Itoperated in 33 states and has more than 500real estate agents, industry journals reported.
The company has filed for bankruptcy in many of the states in which it operated, according to press reports.
TheAmerican Land Title Associationhas worked topass legislationat the state level to ban right-to-list agreements, such as those used by MV Realty.
The property rights of Americanhomebuyersmust be protected, ElizabethBlosser, ALTAs vice president of government affairs, said in a statement. A home often is a consumers largest investment, and the best way to support the certainty of land ownership is through public policy.
We must ensure that there are no unreasonable restraints on ahomebuyersfuture ability to sell orrefinancetheir property due to unwarranted transactional costs, Blosser said.
Suit filed in 2023
The preliminary injunction, which offers important protections to affected consumers, was issued by the Los Angeles Superior Court and was sought by Attorney General Bonta and the Santa Barbara County and Napa County District Attorneys Offices as part of the lawsuit they filed against MV Realty on December 13, 2023.
No family should be trapped in unlawful contracts or face illegal liens on their homes. This preliminary injunction is a critical step in ensuring justice for those impacted by this harmful business model,said Napa County District Attorney Allison Haley
The preliminary injunction requires MV Realty to:
- Remove the liensit has recorded statewidewithin 30 days of the courts order, or within 5 days of notification from a California homeowner, or his or her agent, who needs the termination to be able to move forward with a transaction related to the homeowners property.
- Stop recording new liens.
- Not enforce,during the pendency of the litigation, theHomeowner Benefit Agreements it signed with California homeowners.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-09-17 20:03:42
