A Tampa Bay-area real estate brokerage is canceling 40-year contracts with homeowners that the state attorney general blasted as attempts at "swindling consumers out of their home equity."
Under those "Homeowner Benefit Agreements," the consumers would have to pay 3% of their property's value to MV Realty if they or their heirs list the house for sale with another brokerage, or try to cancel the contract or if the property is foreclosed upon, according to the filings of Florida Attorney General James Uthmeier.
“They were holding your home hostage in terms of refinancing and selling,” said attorney Charles Gallagher of Gallagher & Associates in St. Petersburg, Florida. Gallagher has represented clients against MV Realty. “At the end of the day, there was nothing for the customers,” Gallagher said.
According to the injunction the 13th Judicial Circuit Court in Florida approved in February, the company entered into roughly 9,303 such agreements with Florida customers between 2018 and November 2022.
In court and news reports, MV Realty has said that it has done nothing wrong, that homeowners weren't required to repay the firm, that their business model was innovative, and that the signer's "only obligation is to utilize MV Realty as the real estate agent if and when the homeowner decides to sell."
MV Realty, which faces legal action in other states, did not return multiple requests for comment for this story.
'It's like a stain on the home'
Because the contracts were filed with the counties, they act like a lien on the property, Gallagher said. “Because it’s filed in the public record, it’s like a stain on the home."
Uthmeier made the same argument in court: "Defendants’ practice of recording liens against homeowners also prevents many consumers from unlocking the equity in their homes through refinancing, reverse mortgages, home equity lines of credit, and other financial tools."
After news reports of the practice surfaced in 2022, Uthmeier filed suit. In February, a judge gave the firm 14 days to terminate the contracts.
Uthmeier’s office also did not respond to a request to comment.
The company began filing the necessary documents in February, according to county records.
Clients shouldn't be rushed to sign contracts
While Gallagher said this contract was an original legal instrument, it functioned similarly to a broker-buyer agreement, which outlines what a customer agrees to pay for real estate representation. Buyer agreements have risen in popularity after the National Association of Realtors paid $418 million to settle a suit in 2024 regarding transparency in sales commissions.
“NAR believes that consumers should be fully informed before entering into any agreement, especially one as important as selecting a professional to represent them in the home-selling process,” a NAR spokesperson told Homes.com. “We encourage all consumers to ensure they’re aware of every aspect of a listing agreement, particularly any relevant obligations or potential risks.”
Gallagher said any reputable agency would give potential clients a chance to read a document thoroughly, and even take it to an attorney, before making them commit. “If they’re trying to hustle you to sign quickly, that’s a red flag.”
Both he and the NAR said consumers who believe they are in one of these contracts should contact their state attorney general and make a complaint.
“You have the right as a consumer to bring action against these companies yourself,” Gallagher said.