MV Realty, a Florida-based real estate brokerage, no longer does business in California and other states after allegations of fraud and illegal tactics. The company filed for bankruptcy last year and faces legal actions nationwide.
The company promised cash in exchange for an agreement that homeowners would use their services if they sold their house within 40 years. However, their aggressive tactics didn’t stop there.
What’s a Lien?
A lien is a legal right or claim to someone’s property or other assets. This happens typically if assets are used as collateral for a loan. It’s a way to guarantee the obligation will be satisfied. If not, the creditor may seize and sell the assets. Liens may originate from court judgments and government entities seeking unpaid taxes. Liens can also be fraudulently used by criminals to collect or extort money from victims.
Homeowners Sign Agreements That are Alleged Illegal Contracts
California Attorney General Rob Bonta secured a preliminary injunction against the company in September because of an alleged predatory scheme to lure homeowners needing financial help. The company offered payment from several hundred to five thousand dollars in exchange for signing onto their “Homeowner Benefit Agreements.” About 1,500 Californians are believed to have consented to the MV Realty agreements.
They mandated that homeowners exclusively use MV Realty as agents if they sell their homes in the next 40 years. If they fail to do so, they’re threatened with a penalty of 3% of the home’s value. Long before the 40-year period expired, they illegally placed liens on homes and charged contract signers the 3% if they wanted them removed. The lien could prevent the transfer of home ownership and delay or prevent a homeowner from getting a new home loan or refinancing an old one.
Judge Finds MV Realty Likely Committed Wrongdoing
The Los Angeles Superior Court issued the preliminary injunction in September. It was in response to a legal action filed against MV Realty last December by the Santa Barbara County and Napa County District Attorneys’ Offices and California’s Attorney General Rob Bonta. It alleges that:
- The company operated in California illegally
- They had no definite place of business here
- None of the Homeowner Benefit Agreements were executed by MV Realty’s California broker
- They were signed by people not licensed to work as real estate agents in California, making the contracts “void and unenforceable”
- MV Realty violated the state’s Do Not Call Law, the Truth in Lending Act, and a law that limits exclusive real estate listing agreements to two years
The court ruled that:
- The plaintiffs are likely to win the case on the merits of their claims
- MV Realty intentionally misled homeowners into signing agreements
- The company inflicted “imminent irreparable harm” on them
Under the order, MV Realty must:
- Stop breaking state law and allow owners to control their property
- Remove the liens it recorded within 30 days of the order or five days of being told by a California homeowner or their agent that they need the termination to engage in a transaction concerning the property
- Stop recording new liens
- While litigation continues, not enforce the “Homeowner Benefit Agreements” California homeowners signed
MV Realty filed for bankruptcy protection in February.
We’re Here to Help
If you have questions about liens or feel you’re being victimized by an illegal lien, call the AWB Law PC team at (949) 244-4207 or complete our online contact form today. We can discuss your situation, how state laws apply, and whether a quiet title action may be right for you.
