The most striking is the MV Real Estate Under the Homeowner Benefit Program, homeowners who sign a listing rights agreement can receive grants ranging from $300 to $5,000. In exchange, if they choose to sell the property anytime in the next 40 years, they will grant the company exclusive listing rights and receive a 3% listing broker’s commission. If the homeowner breaches the agreement or decides to terminate the agreement early, the homeowner must pay 6% of the appraised value of the home.
“There’s a reason we call these unfair service agreements,” said Elizabeth Blosser, ALTA’s vice president of government affairs. house line May 2023. At risk.
According to ALTA, listing rights agreements are recorded in property records as liens, covenants, encumbrances or security interests in exchange for money, adding to the cost and complexity of transferring or financing the property in the future.
In March 2023, Utah became the first state to ban such agreements. Since then, 29 other states have followed suit. These include Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Indiana, Kentucky, Louisiana, Maine, Maryland, Minnesota, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Virginia, Washington and West Virginia.
In many of these states, laws are modeled on draft legislation developed by ALTA. ALTA said in a news release that the laws are intended to help “protect homeowners from the predatory practice of filing unfair real estate fee agreements in property records.”
These laws make listing rights agreements unenforceable. They also limit and prohibit the recording of listing rights agreements in property records and provide for the removal of listing rights agreements from property records while allowing for damages.
“Enactment of this important consumer protection legislation in 30 states is a huge victory for protecting people’s property rights,” Blosser said in a statement. “We commend lawmakers on both sides of the aisle for their efforts to champion homeownership and make it clear Says these types of unfair agreements are unacceptable in their state.
“Hopefully, the swift action taken by legislators and the state attorney general will serve as a strong deterrent to those who would like to perpetuate similar schemes that deprive people of their hard-won equity in housing.”
The listing rights agreement first came under criticism in late November 2022, when the Florida Attorney General’s Office sued Florida-based MV Realty, accusing it of operating a “sophisticated and deceptive scheme.” In the following months, several other attorneys general — including those of Massachusetts and Pennsylvania — sued MV Realty over similar claims.
In late February 2023, MV Realty announced that it was suspending signing new listing rights agreements.
“MV Realty has voluntarily temporarily paused new customer contracts as we work to address concerns raised by regulators and legislators,” a company spokesperson wrote in an email to CNN. house line that month.
In September 2023, MV Realty filed for Chapter 11 bankruptcy in 33 states. The company has more than 500 real estate agents.
