The company offered thousands of quick cash loans in exchange for 40-year exclusive listing agreements that a judge found violated the law and issued an injunction stopping the practice.
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Months after a judge ordered MV Realty to terminate long-term contracts with homeowners, the South Florida real estate brokerage has begun letting its clients out of the fraudulent contracts.
According to a report by the Tampa Bay Times, MV Realty has terminated thousands of its contracts, which trapped the firm’s clients into 40-year exclusive listing agreements with the brokerage.
Under the terms of the so-called “homeowner benefit agreements,” if clients listed their homes with another brokerage, MV Realty would place liens on their properties and charge them 3 percent of the property’s value to let them out of the contract.
The state of Florida sued the company in November 2022. In February, a judge ordered the firm to cancel its contracts within two weeks.
The state later said the company failed to comply with the court’s injunction until it recently began terminating the contracts, according to the Times.
MV Realty would work with homeowners who were in need of a quick cash loan. In exchange for money up front, MV Realty would lock its clients into the long-term contracts.
The state said the company violated the Florida Deceptive and Unfair Trade Practices Act through the enforcement of its contracts, and that more than 9,300 homeowners were affected.
“In my almost six and a half years with the office, this was one of the worst abuses that crossed my desk,” former acting attorney general John Guard said in a statement earlier this year. “The 9,303 Floridians who were subject to MV Realty’s unconscionable practices will have their properties unencumbered by this injunction and we will continue to hold MV Realty responsible for its abuses.”
The brokerage began facing legal trouble throughout the country as its notoriety spread and states began filing their own lawsuits to stop its conduct.
MV Realty lost its ability to transact real estate in Colorado. California blocked the company from enforcing its long-term contracts late last year.
Amid the mounting legal battles, the company initially filed for chapter 11 bankruptcy protection before withdrawing that request.
