Wednesday, April 17, 2024

California latest state to sue MV Realty over ‘predatory’ contracts

Must read

California AG Rob Bonta filed a lawsuit against the embattled brokerage on Thursday, accusing it of taking advantage of struggling homeowners.

The verdict is in — the old way of doing business is over. Join us at Inman Connect New York Jan. 23-25, when together we’ll conquer today’s market challenges and prepare for tomorrow’s opportunities. Defy the market and bet big on your future.

Scandal-scarred MV Realty is facing another statewide lawsuit for allegedly preying on financially vulnerable homeowners.

California Attorney General Rob Bonta filed a lawsuit against the embattled brokerage on Thursday, accusing it of a predatory scheme that locked struggling homeowners into 40-year exclusive listing agreements and placed illegal liens on their homes.

Filed in Los Angeles Superior Court, Bonta’s lawsuit claims that 1,500 California homeowners have signed these agreements with the Florida-based brokerage, which the state says are illegal.

“MV Realty is a financial predator. Through its one-sided agreements, the company lined its own pockets at the expense of vulnerable homeowners in California, holding their most valuable assets hostage,” Bonta said in a statement. “To this day, it refuses to release homeowners from those agreements. MV Realty’s actions demand accountability. That’s why we have filed our lawsuit.”

California claims that MV Realty distorted the reality of the significant drawbacks posed by its homeowner agreements. These include filing a lien on the homeowner’s property, hindering them and their heirs from transferring ownership of the home without remitting 3 percent of the home’s value to MV Realty, whether or not the company provided any real estate services.

“MV Realty charges homeowners an illegal 3 percent penalty if they sell their homes without using MV Realty or otherwise cancel their agreement, and refuses to lift its liens unless homeowners pay this illegal penalty,” the Attorney General’s office wrote in its announcement of the lawsuit.

The lien could also delay, impede or block a homeowner from obtaining or refinancing their home loans, in addition to blocking home ownership transfers.

The lawsuit accuses MV Realty of deceptively marketing its exclusive listing agreements, signing its agreements through people not licensed to practice real estate in California — rendering those agreements unenforceable, and violating California real estate laws, California’s do-not-call law, and the Truth in Lending Act.

California is now one of several states who have filed lawsuits against MV Realty for its business practices. Florida, North Carolina, Pennsylvania, Massachusetts, Ohio, and other states have all filed lawsuits of their own over the company’s 40-year homeowner contracts.

MV Realty filed for bankruptcy in September of this year as a result of the growing heap of litigation against it.

The company did not respond to a request for comment.

Email Ben Verde

More articles

Latest article