Press Releases
02/29/2024
Attorney General Tong Seeks to Ban Predatory and Deceptive Real Estate Listing Agreements Following Connecticut Investigation
(Hartford, CT) – Following an investigation that uncovered nearly 400 deceptive real estate agreements in Connecticut through the company MV Realty, Attorney General William Tong today urged legislators to pass legislation banning the multi-year predatory listing deals and nullifying all existing unfair contracts.MV Realty is a Florida-based company with two licensed realtors in Connecticut. An investigation conducted by the Office of the Attorney General revealed that the company has targeted hundreds of lower-income homeowners in Connecticut, offering residential exclusive listing agreements, which MV calls “Homeowner Benefit Agreements.” Through these agreements, MV provides a small cash payment of a few hundred dollars in exchange for the exclusive right to list their homes for sale for a period of 40 years. If a homeowner chooses to sell their home during that period, MV merely posts the home to the Multiple Listing Service (MLS). They do not serve as a real estate agent. If the homeowner seeks to cancel the exclusive listing agreement or lists their home without using MV, they are subject to a draconian penalty of 3 percent of the market price of their home—often worth several thousand dollars. Moreover, the exclusive listing agreements are entered on the land records as a lien.
“MV Realty preyed on hundreds of Connecticut homeowners with scam deals. Their agreements offered small amounts of up-front cash in exchange for decades-long contracts that few people understood or even had the chance to review. Connecticut law should leave no doubt—these contracts must be banned and voided,” said Attorney General Tong.
There are approximately 400 MV Homeowner Benefit Agreements recorded on residential land records in Connecticut. The Office of the Attorney General sent surveys to all 400 homeowners and has received responses from more than 100 people to date.
Many homeowners reported that they did not understand the terms of the agreement when it was offered, were not given time to review the paperwork presented and reviewed and signed the exclusive listing agreements on cracked iPads without a notary present. Some were not afforded the opportunity to read the agreement at all and had it read to them, while others were not given copies of the agreements after execution. Many homeowners did not learn of the terms of the exclusive listing agreement until they were preparing to close on the sale of their home or refinancing and the lien was discovered following a title search, forcing them to pay exorbitant amounts to have it removed.
After a handful of states sued MV, the company filed for Chapter 11 bankruptcy and sought to enjoin the states’ actions. MV was unsuccessful in preventing the suits from going forward and states including Connecticut continue to pursue all available remedies for removing the exclusive listing agreements from homeowners’ land records and seek restitution for consumers who were forced to pay MV.
Legislation proposed by the Office of the Attorney General would make clear that such unconscionably long exclusive listing agreements are unenforceable and would provide mechanisms for removing existing agreements from land records. The legislation would limit such agreements to one year and prohibit recording such agreements on land records. The proposal would further nullify all existing unfair excusive listing agreements and give homeowners and the Attorney General authority to seek removal of these agreements from land records.
Click here for the full testimony.
Assistant Attorneys General Addison Keilty and Rebecca Quinn and Deputy Associate Attorney General Michael Wertheimer, Chief of the Consumer Protection section, assisted the Attorney General in this matter.
- Twitter: @AGWilliamTong
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Media Contact:
Elizabeth Benton
elizabeth.benton@ct.gov
Consumer Inquiries:
860-808-5318
attorney.general@ct.gov