MV Realty Settles California Lawsuits Over Predatory Real Estate Practices

A Florida-based real estate agency, MV Realty, along with its CEO and COO, has agreed to a settlement over a predatory scheme that offered homeowners immediate cash payments in exchange for exclusive listing rights lasting up to 40 years. The California Attorney General's Office announced the settlement on Wednesday, stating that the company misled customers about the terms of these agreements and recorded liens on properties, preventing sellers from transferring ownership unless they paid tens of thousands of dollars in early termination fees.

These liens also blocked homeowners from refinancing or obtaining home equity loans.

Under the settlement, all homeowner contracts with MV Realty are void, and the company must individually terminate all liens. MV Realty, its CEO, and COO are prohibited from engaging in any real estate business in California for five years.

The company must also pay $1,327,069.15 in restitution to consumers and $1,172,930.85 in civil penalties.

Attorney General Rob Bonta stated, "We will not tolerate predatory conduct that targets vulnerable Californians and puts their homes at risk. This settlement delivers the relief we sought in our lawsuit, including full restitution for consumers and the complete undoing of the unlawful practices at issue."

MV Realty began operating in California in early 2022, and by December 2023, it faced lawsuits from the Attorney General and District Attorneys in Santa Barbara and Napa counties. Santa Barbara County District Attorney John T.

Savrnoch said, "The Santa Barbara County District Attorney's Office was proud to team with the Attorney General's Office and the Napa County DA's Office in getting relief for Californians who were victimized by a predatory scheme."

The company filed for Chapter 11 bankruptcy in Florida in September 2023, but the case was dismissed in May 2024. Within ten days of the settlement, MV Realty must send a post-judgment notice to all impacted customers explaining the terms, and a company representative must confirm within 15 days that notices have been sent.

State legislatures nationwide, including California, have passed laws targeting such practices. Governor Newsom signed AB 1345 into law in October 2023, imposing a two-year cap on residential exclusive listing agreements and prohibiting them from being filed with a county recorder.

The law took effect on January 1, 2024.

Napa County District Attorney Allison Haley added, "MV Realty placed profits ahead of people by taking advantage of struggling homeowners and locking them into decades-long agreements by employing deceptive and unlawful business practices."