Minnesota Attorney General Keith Ellison announced the suit last week, saying the Florida-based brokerage violated consumer protection laws by selling “contracts with oppressive terms.”
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Legal woes continued to mount in recent days for controversial brokerage MV Realty after officials in Minnesota sued the firm for “deceiving homeowners and suing their heirs.”
Minnesota Attorney General Keith Ellison announced the suit on Sept. 25, saying the Florida-based brokerage violated consumer protection laws. The suit specifically accuses MV Realty of selling “contracts with oppressive terms” while also trying to hide the details of those terms.
“Ironically, MV Realty named these contracts ‘Homeowner Benefit Agreements,’ or ‘HBAs,’” Ellison said in a statement. “MV Realty entered into hundreds of these contracts with homeowners throughout Minnesota.”
MV Realty did not respond to Inman’s request for comment.
The Minnesota attorney general’s statement goes on to note that the contracts last for 40 years, and are sold with the promise of up-front cash. However, the statement notes that for the majority of Minnesota homeowners who accepted the contracts, the amount they received was less than 1,000. Additionally, the HBAs were, in fact, liens on homeowners’ properties, the statement adds.
MV Realty’s HBAs have landed the company in hot water in numerous states. Most recently, the company lost its license in Colorado over the contracts. Days before that, California Attorney General Rob Bonta announced that his office had secured a preliminary injunction against MV Realty preventing the brokerage from enforcing its contracts in the Golden State.
Elsewhere, North Carolina has banned MV Realty, while Pennsylvania, Massachusetts, Florida and Ohio are among the other states that have sued MV Realty.
Across the board, state officials have characterized MV Realty’s HBAs as predatory and deceptive. The contracts involve paying a homeowner cash in exchange for a promise to use the company as the transaction broker in any future sale during the next four decades. The agreements also stipulate that MV Realty gets to collect a commission on the sale.
In the case of the Minnesota suit — which also names founder and Chief Sales Officer Amanda Zachman as a defendant — officials accuse MV Realty of deceiving people about the length of the contracts, and of suing “dead homeowners’ relatives” to stop sales.
Ellison ultimately concluded in the statement that companies “have an obligation to give you the truth about what you’re being asked to sign, not to give you some half-truths when they have reason to know that very few people would agree to the terms they’re hiding.”
“And, obviously, companies are not allowed to lie to consumers,” he added. “MV Realty’s behavior has been predatory, immoral, and illegal, and we will be holding them accountable for their actions.”