The Massachusetts attorney general’s office has been granted a preliminary injunction in its lawsuit against right to list agreement firm MV Realty.
The preliminary injunction, which was granted last Monday by Kenneth W. Salinger, a justice for Suffolk County Superior Court, restricts MV Realty from engaging in unfair and deceptive marketing practices, prohibits the company from obtaining or recording additional mortgages during the pendency of the litigation, and requires the company to release existing mortgages.
According to court documents, the Court believes that the attorney general’s office is likely to succeed in proving that MV Realty engages in unfair and deceptive conduct by “tricking homeowners into signing HBAs by claiming that MV will give them money for free, without disclosing either that the homeowner will have to repay that advance with substantial interest if they convey their home within the next 40 years, or that the homeowner’s repayment obligation will be secured by a 40-year mortgage interest on their property; falsely representing that it will serve as homeowners’ agent if they wish to sell their home; not giving homeowners a copy of their contract and mortgage until after their three-day rate to cancel the deal has expired; recording mortgages even where homeowners have cancelled the deal and never received any funds from MV; and closing mortgage loans without involving an attorney.”
In addition, the court also stated that it felt the preliminary injunction would be in the public interest, as it is “reasonably tailored to remedying the unfair or deceptive act” by MV Realty.
The office of Massachusetts’s Attorney General Andrea Joy Campbell sued MV Realty in December 2022, alleging that that MV Realty misleads and confuses homeowners through its so-called Homeowner Benefit Program, which promises homeowners cash in return for the exclusive right to list their home for the next 40 years.
“MV Realty conceals in its marketing and sales processes material terms including its ability to foreclose on the home, that the company only acts as a ‘non-agent facilitator,’ and that if the heirs won’t assume the agreement after a homeowner’s death, MV Realty can foreclose,” according to the suit.
“A non-agent facilitator is a type of transaction broker that owes no duty of loyalty to the seller, has no obligation to seek the highest price the market will bear, and owes no duty of confidentiality to the seller,” the complaint reads.
Campbell elaborated further in a statement posted on the Massachusetts attorney general website: “MV Realty has used malicious marketing practices to prey on, lie to and financially exploit hundreds of homeowners across Massachusetts, stripping home equity from cash-strapped consumers. This preliminary injunction will stop MV Realty from further harming our residents and serves as a model for attorneys general offices across the country to fight back against these kinds of predatory practices.”
MV Realty is currently facing additional lawsuits from attorneys general in Florida, Pennsylvania and Ohio.
“While we are disappointed in the judge’s decision, MV Realty looks forward to the full exploration of this matter in court,” Michale J. Connolly, MV Realty’s outside council and an attorney at Hinckley Allen, wrote in an email. “We remain confident the Homeowner Benefit Program fully complies with Massachusetts law and benefits consumers who receive a cash incentive to select MV Realty as their listing agent.”
Early last week, MV Realty announced that it pausing was the signing of new Homeowner Benefit Agreements.
“MV Realty has voluntarily temporarily suspended entering into new customers contracts as we work to address the concerns raised by regulators and legislators,” a company spokesperson wrote in an email.
On Thursday of last week, Utah became the first state to pass legislation banning the usage of right to list agreements. The law makes right to list agreements unenforceable by law, restricts and prohibits the recording of these agreements in property record, creates penalties if agreements of this nature are recorded in property records, and provides for the removal of existing agreements from property record and recovery of damages.
This story was updated to include commentary from MV Realty.
