The Oregon Department of Justice has secured a settlement that releases nearly 700 homeowners from what the state described as deceptive 40-year real estate contracts. The agreement with MV Realty voids the controversial agreements and ensures affected residents will not owe the company any money.
Key Takeaways
- A settlement between Oregon and MV Realty has voided 669 long-term real estate contracts.
- Homeowners who signed the agreements are now free from any financial obligation to the company.
- The contracts, known as "Homeowner Benefit Agreements," locked residents into using MV Realty for any sale over a 40-year period.
- MV Realty is required to pay a financial penalty to the state as part of the settlement.
The Controversial Agreements
The settlement addresses a business practice that drew scrutiny from state officials. MV Realty offered homeowners small cash payments, sometimes just a few hundred dollars, in exchange for signing a "Homeowner Benefit Agreement."
These agreements obligated the homeowner to use MV Realty as their agent if they decided to sell their property at any point in the next four decades. The company then filed liens against the properties, creating significant financial hurdles for the owners.
What is a Property Lien?
A lien is a legal claim or right against a property by a creditor. It serves as security for a debt or obligation. In this case, the lien prevented homeowners from selling their property, refinancing their mortgage, or taking out a home equity loan without first satisfying the terms of their contract with MV Realty.
When homeowners attempted to conduct these common financial transactions, they discovered the lien made it impossible. To remove the lien and break the contract, the company would demand a payment of thousands of dollars.
A Story of Financial Distress
The impact of these agreements was particularly severe for vulnerable residents. The Department of Justice shared the story of one couple who accepted a $1,500 payment from the company. One spouse was disabled and the other was facing end-stage kidney disease, and they did not anticipate moving.
However, as medical expenses grew, they sought a home equity line of credit to help cover the costs. It was then they discovered the lien placed on their home by MV Realty. The company informed them it would cost $12,500 to terminate the contract and proceed with the loan.
"For a few hundred bucks, MV Realty tried to trap people in their 40-year contracts that stuck to their homes — and even their kids," said Oregon Attorney General Dan Rayfield. "That’s not just a bad deal — that’s cruel."
Details of the Oregon Settlement
Under the terms of the agreement announced Friday, all 669 contracts in Oregon are now void. The settlement ensures that the affected homeowners "don’t owe MV Realty a dime," according to the Attorney General's office.
In addition to releasing the homeowners, MV Realty must pay a penalty to the state of Oregon. The company has agreed to pay $150,000 over approximately four years. This amount will be reduced to $90,000 if the company makes its initial payments on schedule.
Financial Terms of the Agreement
- Homeowner Obligation: $0
- Contracts Voided: 669
- State Penalty: Up to $150,000
- Waived Penalty: An additional $500,000 payment was waived due to the company's stated inability to pay.
The settlement provides a definitive end to the uncertainty and financial pressure these long-term contracts placed on Oregon families.
A Nationwide Issue
Oregon is not the only state to take action against MV Realty's business practices. The Florida-based company has faced legal challenges and regulatory scrutiny across the country.
Actions in Other States
Several states have secured court orders to stop the company from enforcing its Homeowner Benefit Agreements. These states include:
- California
- Georgia
- Florida
New Jersey recently announced its own settlement, which affected over 1,200 homeowners. In that case, MV Realty was ordered to pay a $1.5 million penalty and an additional $1.3 million to reimburse homeowners who had already paid fees to terminate their contracts.
The coordinated actions by state attorneys general highlight a growing effort to regulate and penalize real estate practices deemed predatory or deceptive to consumers. For the nearly 700 families in Oregon, the settlement marks the end of a difficult chapter.
