Where things stand with the MV Realty lawsuits
The company's "right to list" agreements gained national attention in December, and civil and legislative actions are ongoing.
- MV Realty's Homeowner Benefit Program has been characterized as predatory and deceptive.
- Through the program, homeowners receive a small cash payment, and MV Realty is granted exclusive listing rights for 40 years. Terminations come with a steep cost.
- Several states have sued the company, prompting MV Realty to pause the program.
The headlines have quieted down since Florida-based MV Realty started gaining national attention late last year, but consumers and governments are continuing to take action against what many claim is predatory behavior.
MV Realty, a brokerage that operates in 33 states, has been sued by six state Attorneys General since December 2022 who allege the company misled customers about its Homeowner Benefit Program. The Federal Communications Commission is also investigating MV Realty for using allegedly predatory robocalls to find people to participate in the program.
What is MV Realty's Homeowner Benefit Program?
The Homeowner Benefit Program works like this: MV Realty gives the homeowner between $300 and $5,000 in cash, and in exchange, the homeowner signs a 40-year contract that gives MV Realty the exclusive right to sell their home and collect a commission up to 6%.
It also gives the firm the right to place a lien on a homeowner's property for up to 3% of the home's value, as determined by MV Realty, if a homeowner wants to terminate the agreement before the 40-year term expires, or if the homeowner dies and their heirs — who may not even know about the agreement — want to get out of the contract.
Why has MV Realty been sued?
MV Realty is facing separate lawsuits from Attorneys General in:
Each lawsuit alleges that MV Realty's Homeowner Benefit Program is deceptive and misleads customers, and that the company preys on cash-strapped individuals. MV Realty has told multiple media outlets that it denies all the allegations against it and has said it expects to prevail in court.
MV Realty is also facing numerous local complaints from homeowners, agents, and brokers in cities ranging from Loveland, Colorado, to Atlanta, Georgia.
The fallout from the lawsuits have been widespread. In February, The Phoenix Business Journal reported that MV Realty agreed to stop signing new contracts with homeowners, although the company rigorously defended what it called an "innovative business model."
How has the industry responded?
In an open letter last month, Zillow came down hard on companies like MV Realty that offer "right to list" agreements, stating that "there is no place for deceptive and harmful practices in real estate." The home search giant added that it is "determined to put an end to these predatory practices, and … has been actively working with more than a dozen state legislatures to pass laws that would prohibit companies from engaging in deceptive advertising and predatory listing practices."
The American Land Title Association (ALTA) has also spoken out against MV Realty's practices and advocated for policy change.
"The property rights of American homebuyers must be protected," ALTA Vice President of Government Affairs Elizabeth Blosser told Real Estate News. "A home often is a consumer's largest investment, and the best way to support the certainty of landownership is through public policy. We have to ensure that there are no unreasonable restraints on a homeowner's future ability to sell or refinance their property due to unwarranted transactional costs."
Why do these lawsuits matter for homeowners and real estate professionals?
MV Realty has more than 30,000 customers across the U.S. and operates in 33 states, Forbes reported. As of January, the company has given out more than $40 million in homeowner payments and stands to collect more than $400 million from the benefits program, according to the report.
The lawsuits could help homeowners recoup money that may have been illegally taken from them, or allow them to terminate their contract without a financial penalty.
Real estate professionals in Colorado also sued MV Realty hoping to stop the company from operating in the state. Some are concerned that the company's practices could affect consumer perceptions of the industry as a whole. Denver-based BusinessDen reported in February that MV Realty has been accused of criminal usury by a Weld County judge, and an Adams County judge scrutinized the company for placing liens on homes that could be scurrilous.
"I don't want them in our state," Zach Chicoine, a real estate broker in Loveland and plaintiff against MV Realty told BusinessDen. "I don't want them doing this and running their scheme in this state."
What happens next?
Lawmakers in at least 11 states including Florida, Colorado, and Washington have passed legislation that increases enforcement against predatory listing practices.
North Carolina seems to be next up on the list as the state's General Assembly advanced the Unfair Real Estate Agreements Act in March to prohibit such agreements. The bipartisan bill advanced out of the House by a unanimous margin in April, according to the Winston-Salem Journal, and is currently being debated in the state Senate.
While the court proceedings against MV Realty remain ongoing, some of the lawsuits offer a window into how judges are thinking about the cases. The Massachusetts AG's office announced in March that it secured a preliminary injunction against MV Realty that prohibits the company from using "deceptive marketing practices" and signing new agreements while the lawsuit continues.
In May, a Hillsborough County, Florida, judge refused a motion to dismiss the Florida Attorney General's lawsuit against MV Realty, according to local news station WTSP. There have been more than 600 complaints filed against MV Realty by homeowners in north Florida and south Georgia, Action News Jacksonville reported.