A new preliminary injunction orders the Florida-based brokerage to stop issuing liens in California, and to stop enforcing its 40-year “homeowner benefit agreements.”
Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
California officials announced this week that they’ve won a legal victory against MV Realty, a company known for its 40-year homeseller contracts that law enforcement has described as a “predatory scheme.”
TAKE THE INMAN INTEL INDEX SURVEY FOR SEPTEMBER
California Attorney General Rob Bonta announced the victory Tuesday, saying that his office has secured a preliminary injunction against MV Realty. The injunction requires MV Realty to remove liens it has recorded against homes in California, to stop issuing new liens, and to stop enforcing its “homeowner benefit agreements” while litigation plays out.
Bonta’s statement characterized the preliminary injunction as a victory against a company that “engaged in a predatory scheme to lure vulnerable homeowners looking for financial help.”
News of the preliminary injunction was first reported by HousingWire.
Inman has reached out to MV Realty and will update this story with any response the company provides.
At issue in the case are MV Realty’s 40-year exclusive listing agreements. The agreements involve MV Realty paying a homeowner cash upfront. In exchange, the homeowner promises to use MV Realty as the transaction broker if they decide to sell the home any time in the next four decades. The agreements also stipulate that MV Realty gets to collect a commission on the sale. According to Bonta’s statement, homeowners wanting to get out of their contracts are required to “pay a penalty of 3 percent of the home’s value” to remove a lien from their homes.
These contracts have attracted significant pushback from officials in multiple states. In 2022, for example, Florida sued MV Realty over the agreements, describing them as part of a “a complex and deceptive scheme.” And earlier this year, North Carolina banned MV Realty from operating in the state. Pennsylvania, Massachusetts and Ohio are also among the states that have sued MV Realty.
For its part, California sued the brokerage late last year, describing MV Realty as “a financial predator” that “lined its own pockets at the expense of vulnerable homeowners.”
Bonta’s statement this week echoed those remarks, saying among other things that MV Realty placed illegal liens on homes.
“To the nearly 1,500 California homeowners who were tricked into entering into the unlawful listing agreements with MV Realty, today is a good day,” Bonta added in the statement. “The court found that we are likely to prevail on our claim that those homeowners were intentionally misled by MV Realty.
“The court also found that MV Realty’s conduct imposed ‘imminent irreparable harm’ to homeowners. As a result, the company is being ordered to stop violating state law, once again allowing homeowners the freedom to do with their property what they wish. While our legal battle is not yet over, we will continue fighting to hold MV Realty accountable.”
The preliminary injunction itself further states that the money homeowners received usually only ranged from a few hundred to a few thousand dollars and that the brokerage intentionally misled consumers about the nature of its contracts.
“Plaintiff alleges that in actuality, the Homeowner Benefit Program is a scheme intended to guarantee that, in the vast majority of cases, homeowners will be forced to pay back MV Realty’s initial cash offer,” the preliminary injunction states, adding later that the brokerage’s payments are actually loans in disguise.
Facing pressure over such agreements — in addition to state attorneys general, the Federal Communications Commission also issued a warning to the company — MV Realty stopped signing new homeowner benefit agreements in February 2023. The company filed for bankruptcy in September 2023.
Email Jim Dalrymple II
