RALEIGH, N.C. (WNCN) — It’ll now be easier to protect your home from unfair real estate practices here in North Carolina after Governor Roy Cooper signed a bill on Thursday afternoon that’ll prevent what are called predatory real estate agreements.
In a rather unusual move, the bill sent to the governor was approved unanimously in both the House and the Senate after lawmakers were asked to create a statute that’ll protect people who are asked to sign long-term house listing agreements that go on for decades—and result in all kinds of financial issues for homeowners.
When you sell your home, it’s common to list it with a real estate broker.
However, the attorney general’s office alleges in a lawsuit that one company doing business in this state was preying on homeowners with long-term agreements that would extend beyond the death of the homeowner.
“They were targeting homeowners who were in real financial need,” said AG Josh Stein. “They were kind of pedaling a few dollars in front of them and failing to then disclose what they were giving up in exchange for those dollars.”
Stein alleges liens would be placed on houses without the homeowner knowing about it which would cause all kinds of financial issues.
“When it came time for them to sell their house or to get a second mortgage or refinance, they couldn’t do it because this lien had been placed on their property,” he said.
Trying to get an early release from the contract would add more financial burden says the lawsuit.
The AG’s office says it investigated more than 20 complaints before taking the company to court. It says more than 2,100 people have signed up for what the company calls its “Homeowner benefit program.”
The bill signed today by the governor would prohibit long-term agreements and payments for listing homes for sale.
Consumer Investigator Steve Sbraccia reached out to MV Realty and a company spokesman sent us an email statement.
It says in part: “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.”
In addition, the company told CBS 17 it “has voluntarily and temporarily paused entering into any new agreements.”
The lawsuit against MV Realty is now working its way through the court system.
There will be a hearing on a preliminary injunction tomorrow.
Read the company’s full statement:
“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 resolving this matter with the North Carolina Attorney General to address any concerns.”