RALEIGH, N.C. — North Carolina's Attorney General is suing a real estate brokerage accused of breaking state law and pressuring homeowners into deceptive agreements regarding their property.
Attorney General Josh Stein filed the lawsuit against Florida-based MV Realty in Wake County on Tuesday, alleging the brokerage is "preying on vulnerable people to trick them into unfair, long-term agreements". Stein's statement, shared Tuesday, claimed the brokerage tricked homeowners into signing exclusive 40-year real estate agreements that require homeowners to use MV Realty to list their property for sale but did not share with homeowners that those agreements persist even after the homeowner's death.
According to Stein's statement, MV Realty set up shop in North Carolina in August 2020, and since then signed up more than 2,100 homeowners in the state for its "Homeowner Benefit Program", with more than 32,000 homeowners signed up across the country. Stein alleges the brokerage targets homeowners facing financial hardships with robocalls, internet ads, and texts by claiming they will pay homeowners a small upfront cash payment with "no strings attached" if the homeowner agrees to use MV Realty as their listing agent if they sell their home.
Stein also claims MV Realty places a lien on the homeowner's property to ensure it can enforce the agreement, despite claims in advertising it doesn't do so. Stein's statement said this makes selling a home or tapping into a home's equity difficult or impossible, and that MV Realty demands a penalty worth at least 10 times the upfront payment received. Stein also said the brokerage has filed lawsuits against homeowners to prevent home sales and to collect the penalty.
Stein also alleges that MV Realty misrepresents the level of service its agents provide, claiming they act more as salespeople for the program and fail to do even basic tasks like putting up a "for sale" sign in front of a home.
To note, Stein's lawsuit says the Charlotte area is one of MV Realty's major markets. WCNC Charlotte received this statement from a company spokesperson shortly after this article was published:
MV Realty and our team of licensed real estate agents have proudly assisted over 35,000 satisfied homeowners across the country through our innovative Homeowner Benefit Agreement (HBA) program.
The HBA program compensates homeowners for the future right to list the home if they choose to sell within the term of the agreement.
The HBA Program is an innovative option that is first and foremost designed to benefit homeowners by ensuring they are compensated for the exclusive right to list their home. Under a traditional real estate transaction model, homeowners would enter into an exclusive 6-month listing agreement with agents who don’t provide the homeowner any payment for this exclusive right.
If a homeowner decides to sell their home during the term of the HBA, MV’s locally licensed real estate brokers serve the same role as any licensed real estate broker and receive a 3% commission for its services pursuant to the HBA. This fee aligns with the standard market rate for virtually all residential real estate transaction commissions.
Notably, there are no liens put on a customer's property and the HBA does not affect or could the title. Consistent with the law, MV files a memorandum that simply informs third parties of the existence of the agreement between the property owner and MV Realty.
MV Realty remains confident that the Homeowner Benefit Program fully complies with the law and benefits consumers who receive a cash incentive to select MV Realty as their listing agent. MV Realty has voluntarily and temporarily paused entering into any new agreements.
We hope to work with policymakers in North Carolina to address concerns and continue this valuable program as an option to homeowners across the state.
Anyone who believes they have been treated unlawfully by MV Realty is urged to file a complaint with Stein's office online or call 1-877-5-NO-SCAM.
The lawsuit filed by Stein's office is the latest one against MV Realty. NBC affiliate WRAL-TV in Raleigh reports the brokerage is also facing lawsuits from attorneys general in Florida, Massachusetts and Pennsylvania. WRAL also shared that the Federal Communications Commission shut down an illegal robocall operation linked to MV Realty. The brokerage told WRAL in a statement it temporarily stopped entering into new contracts with customers but said it "remains confident that the Homeowner Benefit Program fully complies with the law".
Read Stein's full statement below:
Attorney General Josh Stein today filed a lawsuit against real estate brokerage firm MV Realty and the company’s leaders alleging that they violated North Carolina’s laws prohibiting unfair and deceptive practices, usurious lending, abusive telephone solicitation practices, and unfair debt collection practices by tricking homeowners into signing oppressive, 40-year real estate agreements. The Department of Justice has received more than 20 complaints from people about MV Realty’s unfair and allegedly unlawful practices.
“We allege that MV Realty is preying on vulnerable people to trick them into unfair, long-term agreements,” said Attorney General Josh Stein. “My office is taking them to court to put them out of business.”
MV Realty started operating in North Carolina in August 2020, and has since signed up more than 2,100 North Carolinians to its “Homeowner Benefit Program.” Nationally, MV Realty has signed up more than 32,000 homeowners. Through the program, MV Realty targets homeowners who are facing financial hardships and are in need of cash through online ads, robocalls, and texts. MV Realty claims it will pay a homeowner a small upfront cash payment with “no strings attached,” as long as the homeowner agrees to use MV Realty as their listing agent if they sell their home. But MV Realty doesn’t tell homeowners that if they accept this deal, they are locked into exclusive 40-year agreements that even survive their deaths.
MV Realty also places a lien on the homeowner’s property to ensure it can enforce its agreement, even though it claims in its advertising that it doesn’t place liens. These liens make is difficult or impossible for homeowners to sell their homes or tap into its equity. And if a homeowner wants to be released from the oppressive agreement, MV Realty charges them a penalty that is at least 10 times the upfront payment they received. MV Realty has even filed lawsuits against homeowners to prevent them from selling their homes and to collect its penalty.
MV Realty also misrepresents the level of service its real estate agents provide. In reality, MV Realty’s real estate agents act primarily as salespeople focused on convincing homeowners to sign up for MV Realty’s program. Once an MV Realty real estate agent has persuaded a homeowner to accept the small upfront payment, they ensure that the homeowner is rushed into signing an agreement without any real opportunity to read it. If a homeowner does ask an MV Realty real estate agent for help selling their home, these agents sometimes fail to do even basic tasks like putting up a “for sale” sign.