NC Attorney General, lawmakers working to end ‘predatory’ real estate agreements

CHARLOTTE, N.C. (WBTV) - A real estate company is facing legal troubles after North Carolina Attorney General Josh Stein filed a lawsuit against it for allegations of violating state laws, including unfair and deceptive practices. On Wednesday morning Stein, lawmakers, and real estate representatives were in Charlotte to talk about efforts they’re taking to prevent what Stein calls ‘Predatory, long-term real estate agreements.”

In March, Stein sued MV Realty, and he’s not the only attorney general to do so. Last year Florida’s Attorney General Ashely Moody filed a complaint against the Florida-based company for similar reasons.

The company offers homeowners a chance to make money in exchange for an agreement to allow the company to list the home if a homeowner decides to sell --- an agreement that lasts 40 years and continues even after a homeowner dies.

Although homeowners are required to sign and agree to the terms of the contract, Stein alleges they aren’t being told the whole story.

“We allege that MV Realty is preying on vulnerable people to trick them into unfair, long-term agreements. My office is taking them to court to put them out of business,” Stein said.

In response to the lawsuit and allegations, a spokesperson for MV Realty provided WBTV with a statement explaining the company’s position.

“MV Realty and our team of licensed real estate agents have proudly assisted over 35,000 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,” MV Realty’s statement said.

“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,” the statement continued.

Stein disagrees.

“This deal, which MV Realty calls its Homeowner Benefit Program, sounds too good to be true because it is. MV Realty conceals, misrepresents, and fails to disclose onerous material terms that are imposed on homeowners who accept the small, up-front cash payment. At bottom, MV Realty is a predatory lender slickly repackaged as a self-described “innovative” and “disruptive tech-focused real estate brokerage,”' Stein’s lawsuit reads.

Commissions and realtor fees are not unusual, in fact, they are common when homes are sold with the help of a real estate broker, and MV Realty’s statement said the company’s fees are not atypical.

“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 typical sales commission for its services. This fee aligns with the standard market rate for virtually all residential real estate transaction commissions in North Carolina,” according to MV Realty’s statement.

It might be a novel business model but MV Realty believes the program is not illegal.

“MV Realty remains confident that the Homeowner Benefit Program fully complies with the law and benefits consumers who select MV Realty as their listing agent. MV Realty has voluntarily and temporarily paused entering into any new agreements,” the company’s statement reads.

Pending laws in NC

North Carolina legislators introduced a bill titled, “Prohibition of Unfair Real Estate Service Agreements,” which Stein hopes becomes law.

“The Unfair Real Estate Agreements Act (H422/S344) prohibits oppressive, long-term “Right to List” service agreements that purport to run with the land, create a lien or security interest on a homeowner’s property, or are otherwise assigned without the homeowner’s clear consent,” according to the NC Department of Justice.

Even with the possibility of new laws, MV Realty said they hope to work with legislators in the future.

“We look forward to working with policymakers in North Carolina to address any concerns and continue this valuable program as an option to homeowners across the state,” according to the company’s statement.

The lawsuit is still in its infancy but Stein promised to continue to hold businesses accountable, and if any are found violating state laws, he plans to continue taking legal action.

“Our homes are usually the most significant purchases we ever make,” said Attorney General Josh Stein. “We cannot let predatory businesses come in and trick North Carolina homeowners. I’ll keep fighting these bad actors, and I’m grateful that the House and Senate is taking action to put an end to these agreements,” Stein said.