5 On Your Side: MV Realty accused of using deceptive practices according to lawsuit

The state of North Carolina issued a one-two punch on Tuesday against a realty company 5 On Your Side has warned you about.

Officials say MV Realty offers quick cash to trick homeowners into deceptive 40-year agreements. Those agreements put liens on homes and force victims into expensive buyouts if they don't honor the contract.

Attorney General Josh Stein filed suit on Tuesday saying, "My office is taking them to court to put them out of business."

5 On Your Side dug through the 227-page lawsuit.

It accuses MV Realty of using words like "stimulus" and "benefit funds" in their advertising to make people think MV's "Homeowner Benefit Program" is actually a public benefit program.

It's only after people sign up and receive small payments that the suit says victims realize they have agreed to use MV Realty as their listing agent for the next 40 years or pay 3% of their home's value in penalties.

An MV Realty spokesperson told 5 On Your Side the company doesn't use liens on homeowner's properties to enforce these agreements.

However, the AG's lawsuit includes a letter from an MV Realty attorney that notes: "MV's lien and other rights under the HBA" on a Johnston County property.

The suit also says MV Realty entered into more than 2,100 Homeowner Benefit Agreements in North Carolina since August of 2020 but only sold about 52 homes in the state. It claims the large majority of MV's revenue is from these early termination penalties rather than commissions it earns from property sales.

Also, on Tuesday, the North Carolina House and Senate introduced identical bills that don't mention MV Realty by name but clearly targeted their activities by banning these types of long-term agreements.

If passed, the legislation would consider real estate agreements unfair if they are effective for more than a year and include certain characteristics like liens on the property.

An MV Realty spokesperson sent 5 On Your Side this statement in response to today's lawsuit and bill filings:

"MV Realty and our team of licensed real estate agents have proudly assisted over 35,000 satisfied homeowners across the country through our innovative Homeowner Benefit Agreement (HBA) program.

"The HBA program compensates homeowners for the future right to list the home if they choose to sell within the term of the agreement.

"The HBA Program is an innovative option that is first and foremost designed to benefit homeowners by ensuring they are compensated for the exclusive right to list their home. Under a traditional real estate transaction model, homeowners would enter into an exclusive 6-month listing agreement with agents who don't provide the homeowner any payment for this exclusive right.

"If a homeowner decides to sell their home during the term of the HBA, MV's locally licensed real estate brokers serve the same role as any licensed real estate broker and receive a 3% commission for its services pursuant to the HBA. This fee aligns with the standard market rate for virtually all residential real estate transaction commissions.

"Notably, there are no liens put on a customer's property and the HBA does not affect or cloud the title. Consistent with the law, MV files a memorandum that simply informs third parties of the existence of the agreement between the property owner and MV Realty.

"MV Realty remains confident that the Homeowner Benefit Program fully complies with the law and benefits consumers who receive a cash incentive to select MV Realty as their listing agent. MV Realty has voluntarily and temporarily paused entering into any new agreements.

"We hope to work with policymakers in North Carolina to address concerns and continue this valuable program as an option to homeowners across the state."