Harris County, Texas – Have you heard about predatory listing agreements? If not, let me fill you in.
These contracts, also known as right-to-list agreements, offer homeowners a small upfront payment in exchange for the exclusive right to list their property, sometimes for 40 years!
What’s the catch?
Well, these agreements often come wrapped in deceptive marketing, targeting vulnerable homeowners, particularly the elderly, who might be in a tight financial spot.
You might be thinking, “I’d never fall for that!” But many of us believe we’re immune until it happens to us.
On Thursday at 6 p.m., KPRC 2 anchor Daniella Guzman spoke with some homeowners who unfortunately fell victim to these allegedly predatory practices.
One of the companies facing accusations from hundreds of homeowners nationwide for allegedly tricking them into signing these 40-year listing agreements in exchange for those tempting upfront payments is MV Realty.
What is our basis for the claim that there are hundreds of accusations of predatory practices?
Daniella discovered that in just the past three years, hundreds of Harris County homeowners have signed contracts with MV Realty. Many homeowners locked themselves into these agreements that could be enforced by liens. This means that if they ever want to sell their homes, they’re forced to use MV Realty. And if they decide to cancel? That could cost them 3% of their home’s value.
Several states fight back against MV Realty
In Florida, where MV Realty is based, the state’s Attorney General is currently suing the company for employing predatory tactics to get people to sign those long-term agreements. . MV Realty is fighting the case, and denies the allegations made against them. The state has put a stop to the company’s ability to enforce these contracts and collect money from homeowners, according to WFTV 9, which first broke the investigation into MV Reality.
But Florida isn’t alone in this fight. Attorneys General in 12 states have joined forces to sue MV Realty, aiming to stop them from enforcing agreements. Also, according to WFTV 9, 29 states have already passed legislation to ban or limit these types of contracts altogether.
KPRC 2 reached out to the Texas Attorney General’s Office to see if they’re pursuing a lawsuit, but we haven’t heard back by the time of this report.
Two Texas bills focus on banning predatory listing agreements
The first bill, SB 2957, is aimed at stopping unfair service agreements related to residential real estate.
Under the bill, a service agreement is considered unfair if it includes provisions that are not to be performed within one year, binds current and future property owners, allows assignment of service rights without consent, or creates liens on the property. Certain agreements, such as home warranties and utility service contracts, are exempt.
If passed, unfair agreements would be void and unenforceable, and those who file and submit the agreements in the state would face a Class A misdemeanor charge.
The second bill, HB 4204, which is similar to SB 2957 in many ways, also aims to prohibit the use of unfair service agreements and make it an offense.
Both bills are currently still making their way through the Texas Legislature. If passed, both bills state they will go into effect in September.
