CHARLOTTE, N.C. — North Carolina Attorney General Josh Stein is sharing new details about a lawsuit he filed against real estate company MV Realty, alleging the company tricked customers into signing unfair and predatory contracts while buying homes.
Stein detailed the lawsuit during a visit to Charlotte this week, saying he supports the Unfair Real Estate Agreements Act to end such contracts in North Carolina. The lawsuit alleges MV Realty tricked homeowners into signing oppressive, 40-year agreements through its "Homeowner Benefit Program." Homeowners, in return, would receive an upfront fee, worth a few hundred dollars.
The Attorney General's office received at least 40 complaints about MV Realty's practices. Stein warned homeowners in need of a financial boost and are considering selling their home.
"If you need cash, and somebody says to you, I will list your home for you when you're ready to sell it, even if you're not ready to sell it right now, and I'll give you cash, that's a huge red flag," Stein said.
"Our homes are usually the most significant purchases we ever make," Stein said. "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 are taking action to put an end to these agreements."
North Carolina lawmakers introduced the Unfair Real Estate Agreements Act in March, which 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 without the homeowner's clear consent. Some homeowners in the Charlotte area fell victim to these types of contracts, according to Stein.
"I fell victim by means of a phone call after my house closing," Yolanda Frasier, a MV Realty customer said. "I didn't know that the contract was for 40 years and 3% of whatever I sell my house for, as well as the exclusive rights for them to sell. I would've never signed up for this if I had known."
The bill cleared the House unanimously in April. The legislation is supported by numerous agencies, including AARP, the NC Land Title Association, the Department of Justice, the NC Bar Association and Zillow, as well as the North Carolina Real Estate Commission. Rep. Kyle Hall, one of the bill's sponsors, used his background as a realtor to draft legislation to protect homeowners in North Carolina.
"North Carolina property owners deserve peace of mind that our laws prevent bad actors from taking advantage of them with unfair, confusing and misleading sales contracts," Hall said.
Stein said MV Realty has signed up 2,100 homeowners in North Carolina since starting its business in the state in 2020, with most of them living in Charlotte and the Piedmont.
Mecklenburg County Commissioner Mark Jerrell said it's important for community leaders to step into the gap and make sure protections are in place for the elderly and those who may be on the financial fringe.
"We continue to have two communities - the haves and the have nots," Jerrell said. "We have to go to people. We can't expect them to come to us. But we really have to drill down into the neighborhoods, connecting with community leaders and letting them know, what are the resources available? What are their rights?"
WCNC Charlotte received this statement from MV Realty after this report aired:
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.
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.
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.
Notably, there are no liens put on a customer's property in North Carolina. Consistent with the law, MV files a memorandum that informs third parties of the existence of the agreement between the property owner and MV Realty.
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.
We look forward to working with policy makers in North Carolina to address any concerns and continue this valuable program as an option to homeowners across the state.
Contact Jane Monreal at jmonreal@wcnc.com and follow her on Facebook, Twitter and Instagram.
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