Traverse City — The Better Business Bureau surveyed a Florida-based real estate firm that is offering a new kind of contract to homeowners in Michigan and more than 30 other states. The nonprofit said he received nearly 50 complaints from the nonprofit that conducts business evaluations.
According to a statement posted on the BBB’s website earlier this month, consumers accused Delray Beach-based MV Realty of offering unfair contracts that were not fully explained, prompting an investigation. did.
“Furthermore, some consumers claim that a lien (or memorandum of understanding) has been placed on their property,” the statement said.
Developed by Delray Beach’s MV Realty, the Homeowner Benefits Program enshrines in the HBA contract in exchange for the right to put the home for sale at some point in the future in exchange for an upfront payment to the homeowner.
Homeowners who decide to sell must sell to MV Realty for a 6% commission.
If you choose to sell your home yourself or use another realtor during the 40-year contract period, you will face a financial penalty equal to 3% of the home’s market value, the contract says. .
Amanda Zachman, founding broker and executive director of MV Realty, said the company is working hard to further improve its interactions with customers and prospects.
“We view all customer feedback as an opportunity to listen, learn, and improve,” said Zachman, noting that the 50 complaints from 30,000 customers over three years are low, compared to other companies. He added that it was below the norm.
“Our goal is zero complaints,” Zachman said.
MV Realty responded directly to the BBB’s inquiry on August 10, promising that a notary public would provide information to the signatories on how the HBA works.
Their response to the BBB also said the notary will confirm to the signatories that they have agreed to allow MV Realty to submit a memorandum of retention of the HBA agreement on their property.
In a statement previously emailed to Record Eagle, the company did not explain that HBA’s memorandum on record in the county register copy is a lien.
“In other words, an HBA is simply a contract between two parties where the MV will pay a certain amount and in return the homeowner will make a contractual commitment to the MV,” the company said.
“If a homeowner decides to sell their home, MV Realty undertakes to enter into a separate listing agreement for the sale of that home that fully complies with all applicable rules and regulations. ,” the company said.
However, some questioned the legality of the deal and raised alarm bells about the 40-year timeframe.
Michigan Registrar of Deeds President Brandon Denby said of the deal, “There are definitely concerns about these across the board.” “What this company seems to be doing is saying we’re going to give you a small scholarship and now you’re saying that we and he are going to be together for 40 years. That’s it.”
Denby, who is also a copy of the Livingston County register, confirmed that he has asked the local prosecutor’s office to investigate whether the “restriction of alienation” clause in the state’s real estate law applies to HBA.
Michigan, like most states, does not allow unreasonable restrictions on the sale of real estate, but like most states, it does allow owners to impose conduct restrictions on their properties, It is this issue that Denby wants to clarify.
Denby et al., meanwhile, say they’re concerned that economic stress could put homeowners at risk of signing HBA contracts that they otherwise wouldn’t.
“It’s clear that inflation is very high right now,” Denby said. Concerned about preying on low-income families. “
MV Realty’s HBA Memorandum and Entire Agreement do not classify the contract as a lien, but that is how the contract works, says Deeds Peggy Haines of the Grand Traverse County Register.
Haynes said he raised concerns about the contract with colleagues about whether the upfront payments MV Realty makes to homeowners are fair compared to the value of what they’re contracting for.
Homeowners who sign the contract will receive between $300 and $5,000, according to information on MV Realty’s website.
Chris Lambert, co-owner of Northern Title Agency, has previously said that 40 years compared to standard listing contracts from licensed Michigan realtors that typically last 3, 6 or 12 months. He said the contract that followed went far beyond the norm.
Under the HBA Agreement, the homeowner waives its right to become a party to a class action, agrees to MV Realty’s use of his photo in company marketing materials, and agrees that MV Realty will release any or all of its obligations to others. states that it agrees that it can be delegated to
The obligation stated in the contract is to “operate with the land,” meaning that if the homeowner dies during the 40-year period, the terms of the contract for the property will continue with the beneficiary. terminology.
Haynes said her office has so far received five memorandums (shortened versions of HBA contracts), recorded four, and rejected one over notary issues.
Staff at the counties of Antrim, Benjie, and Leelanau County Register Transcript Offices previously searched MV Realty’s listing agreement, but reportedly found none listed.
The Mecosta County Register of Deeds Karen Hahn said it recorded one memorandum in January and rejected one filed in December.
“In real estate transactions and contracts of this kind, the notary must sign his name on the signature and confirmation columns and the signatures must match exactly,” Hahn said. “We rejected it because there was a contradiction.”
Hahn said the repeated submissions were sufficiently concerning that he notified the electronic filing vendor. Future documents electronically.
“I don’t know if they were just trying to put it on the record or if they thought if we kept submitting it someone else would come to the office and we would just take it.” Hahn said.
Federal and various state court records show that, in connection with the HBA agreement, the homeowner has sought to terminate the agreement, or MV Realty has sought to enforce the terms, take a mortgage on the foreclosed property, or indicate that you are seeking to be added as a creditor. in bankruptcy.
Additionally, a Texas homeowner was sentenced to a $2,000 default judgment against MV Realty on August 5. This comes after MV Realty was accused of violating telephone consumer protection laws and repeatedly called her personal cell phone after she registered the number on her Do-Not in the country. – Call Registry.
Court records show that the caller did not identify himself or the company he was representing, and while homeowner Mabel Arredondo of El Paso County was not interested, he did not identify the caller. I told the person I called that I might consider their offer for the sole purpose of doing so and/or the company that made the call. “
MV Realty’s agent emailed Arrendondo the HBA contract. Arendondo said what she called “robocalls” was unauthorized telemarketing, and she asked the company to stop contacting them.
Instead, when Arrendondo received more calls from MV Realty, she filed a lawsuit, according to court records. MV Realty did not respond, and her U.S. District Court Judge David C. Guaderrama signed the default judgment order.
A federal lawsuit between MV Realty and an investment firm shows the greater purpose of MV Realty’s foray into the listing rights agreement.
Innovatus Capital Partners, a New York-based investment advisor and portfolio management firm, approached MV Realty’s shareholders in 2017, according to U.S. District Court filings, which one attorney viewed as a new and novel business opportunity. expressed.
In a nutshell, MV Realty will create the listing rights agreements and Innovatus will securitize them, court filings show. According to federal court filings by MV Realty as of 2018 or 2019, the company had more than 10,000 listing rights contracts in the United States.
Court filings show that Innovatus spearheaded the idea that by consolidating a number of listing deals, it could reflect a rise in residential real estate and be attractive to investors.
However, relations between the two companies quickly soured, and a lawsuit is currently being filed in the United States District Court for the Southern District of New York.