A real estate company’s long-term contract with homeowners is under scrutiny, requiring new laws in Florida and elsewhere.
MIAMI — Testimonials on the MV Realty webpage show that satisfied customers praise their positive experience with the Homeowner Benefit Program.
A smiling couple from South Florida talk about the ease of signing up and what they love about the program.
Under the terms, the landlord agrees, in exchange for a cash payment, to allow the MV to be their realtor for 40 years if he ever decides to sell his house.
The “Memorandum” is filed with the county where you live, and if you use another broker, you agree to a termination fee.
But some homeowners who signed with MV now say they weren’t clear about the terms.
Joe Grudzinskas, who lives in Davie, says the woman who was the MV agent knocked on his door and he agreed to let her act as his real estate agent in exchange for cash.
It was three years ago.
Grudzinskas says he had just returned home from the hospital after suffering a heart attack and needed money to pay his bills.
“They said we would pay you $300 per contract and $300 per referral,” he said. “It sounded like a good deal because I was in a lot of pain.”
Grudzinskas, who recently fell and became bedridden, says he recently decided to move to Orlando with his daughter.
He decided to use the help of a realtor, who first sold him his house.
Afterwards, he says that his realtor told him that his property had been seized.
“I received a possible subpoena that I needed to go to court to challenge the lien.”
He says MV Realty sued him because he violated his contract.
And he was not alone.
CBS News Miami examined the court records and found that others in South Florida faced the same dilemma.
Similar incidents occurred throughout the state.
Last November, Florida Attorney General Ashley Moody sued MV Realty, accusing it of “deceptive, unfair and unfair business practices.”
Attorneys general in Massachusetts, Pennsylvania, Ohio, and New Jersey also sued MV, alleging that the company violated consumer protection laws.
The lawsuit is ongoing, but MV is vigorously fighting the allegations and claims they are in accordance with state law. Miami News asked to speak with an MV Realty representative.
Although they refused, they did allow us to interview attorney James Terlizzi, director of the trade group The Future Listing Purchasers Association, of which MV is a member.
“Contracting a future listing is the subject of patents,” Terlizzi said. “Some companies made it work, some didn’t.”
Terlizzi says homeowner benefit programs have been around for at least a decade, and there’s reason for a long contract.
“Only 54 percent of homes are traded in a given year, so if the contract expires in 24 months, it is mathematically certain they will lose money,” he said.
Terlizzi says the contracts are clear and everything is spelled out for the homeowner.
He says the trade group is an advocacy organization and they’ve been trying to work with states on legislation to make the homeowner’s benefit process clearer.
Terlizzi said they were not successful in Florida.
During the last legislative session, lawmakers passed Alternative Home Loan Agreements, which place barriers to certain real estate contracts.
- It prohibits realtors from placing mortgages on residential properties.
- It requires the listing services to be launched within 90 days, otherwise the contract is considered invalid.
Terlizzi is critical of the new law.
“Residents are giving up the right to list their property for sale instead of being compensated for it,” he said. “The vast majority of people are happy and know what they are doing.”
MV Realty tells CBS News Miami that they are voluntarily suspending the Homeowner Assistance Program for the time being.
It is not known when the court cases filed by the state AGs will be completed, but their results may affect the company and the homeowners who signed the contracts.
