North Carolina Attorney General Josh Steins has become the latest attorney general to file a lawsuit against real estate brokerage firm MV Realty for allegedly violating the state’s laws prohibiting unfair and deceptive practices, usurious lending, abusive telephone solicitation practices, and unfair debt collection practices by having homeowners sign 40-year real estate agreements. The state’s department of justice received more than 20 complaints from people about MV Realty’s unfair and allegedly unlawful practices.
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 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 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 it difficult or impossible for homeowners to sell their homes or tap into its equity. And if a homeowner wants to be released from the 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, according to the suit. 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 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.
Stein is seeking preliminary and permanent injunctions, restitution for consumers, and other monetary penalties. North Carolina joins Florida, Massachusetts, Pennsylvania, and Ohio in filing suit against MV Realty.