Colorado gives MV Realty the boot
The Rocky Mountain State revokes troubled brokerage’s license over 40-year right-to-list agreements as Minnesota joins 10 other states in filing suit.
Key points:
- Colorado officials said MV Realty’s Homeowner Benefit Agreements “disregarded or violated” state licensure laws.
- California this month secured a temporary injunction that will keep MV Realty from enforcing its agreements and requiring it to release its liens.
- MV Realty has defended its business model as “innovative.”
Colorado regulators have revoked the license of embattled Florida-based brokerage MV Realty as legal challenges to its 40-year "Homeowner Benefit Agreements" continue to multiply.
The decision to revoke MV Realty's state license was the culmination of a nearly two-year dispute between the brokerage and Colorado regulators and came as Minnesota became the 11th state to file suit against the firm, joining California, Florida, Georgia, Illinois, Indiana, Massachusetts, New Jersey, North Carolina, Ohio, and Pennsylvania.
Earlier this month, officials in California secured a temporary injunction that prevents the company from enforcing these agreements for the next six months. MV Realty appealed the injunction three days after it was issued, arguing the injunction would hurt its business in California.
Colorado warns consumers
Officials with Colorado's Department of Regulatory Agencies concluded MV Realty's Homeowner Benefit Agreement "disregarded or violated" the state's licensure laws and rules, according to a Sept. 23 statement.
"Licensees hold a position of trust in our communities and with this agreement, Colorado consumers will be protected from future harm," DORA Division Director Marcia Waters said. "All members of the public should be informed of the importance and long-standing ramifications of executing any documents which encumber or purport to encumber their property before signing such a document," she continued.
The Homeowner Benefit Agreement agreement works like this: MV Realty will give a homeowner up to $5,000 in cash if they agree to give MV Realty exclusive rights to sell their home over the next 40 years. MV Realty also places a lien on these homes and charges homeowners 3% of their home's value to remove the lien.
In 2023, Colorado lawmakers passed a bill that effectively prohibited MV Realty from offering this agreement in the state.
Real Estate News has reached out to MV Realty for comment. The company, which filed for bankruptcy last year, previously defended its business model as "innovative."
California prevents MV Realty from enforcing agreements
On Sept. 17, officials in California secured a preliminary injunction against MV Realty, which prevents the brokerage from enforcing more than 1,400 agreements in that state.
In addition, the injunction requires MV Realty to remove any liens it has recorded within 30 days of the court order, or within five days' notice from a homeowner. MV Realty also is prohibited from recording new liens in California during litigation.
"The court found that we are likely to prevail on our claim that those homeowners were intentionally misled by MV Realty. The court also found that MV Realty's conduct imposed 'imminent irreparable harm' to homeowners," California Attorney General Rob Bonta said in a statement. "As a result, the company is being ordered to stop violating state law, once again allowing homeowners the freedom to do with their property what they wish."