Santa Barbara DA Joins Lawsuit Against Predatory Real Estate Scheme

The Santa Barbara District Attorney’s office joined in a lawsuit filed by California Attorney General Rob Bonta Thursday against Florida-based company MV Realty, which, according to the complaint, allegedly lured over 1,500 homeowners — including residents of Santa Barbara and Napa counties — into signing fraudulent 40-year-long exclusive listing agreements and placed illegal liens on their homes.

In the lawsuit, which was filed in Los Angeles Superior Court following a joint investigation by the California Department of Justice and the Santa Barbara and Napa District Attorney’s Offices, it is alleged that MV Realty offered cash payments ranging from several hundred up to $5,000 to convince homeowners to sign a “Homeowner Benefit Agreement,” which the company portrayed as an unofficial memorandum agreeing to use MV Realty should they decide to sell their home in the future. But the agreement was “misrepresented,” according to the complaint, and homeowners unknowingly entered into 40-year contracts with illegal liens on their homes and illegal charges for those who tried to cancel the agreements.

“MV Realty is a financial predator,” Attorney General Bonta said. “Through its one-sided agreements, the company lined its own pockets at the expense of vulnerable homeowners in California, holding their most valuable assets hostage. To this day, it refuses to release homeowners from those agreements. MV Realty’s actions demand accountability. That’s why we have filed a lawsuit.”

This is not the first time the company has faced legal action and scrutiny over its exclusive listing contracts. MV Realty is facing legal action in Florida, Massachusetts, Pennsylvania, North Carolina, Ohio, New Jersey, Indiana, and North Carolina, with several courts ordering the company to “cease encumbering homeowners’ homes with its illegal liens and other unlawful recorded documents.”

According to the company’s website, MV Realty’s Homeowner Benefit Program went from 7,778 contracts in 2021 to more than 32,000 contracts through the first eight months of 2022. The company’s founder, Amanda Zachman, boasted in 2022 that the MV Realty averaged 3,480 new contracts each month and was on track to reach 100,000 within 12 months. By the end of 2022, MV Realty claimed to be worth over $400 million, with over 500 agents in 33 states. 

In September 2023, after three state senators spoke out against the company, and facing several lawsuits, MV Realty filed bankruptcy. 

The California lawsuit alleges that the company operated in the state illegally. In fact, the complaint says the company did not maintain a definite place of business in the state, and none of the Homeowner Benefit Agreements were signed by MV Realty’s designated California broker; instead they were signed by individuals not licensed to practice real estate in California,” rendering all of the contracts legally “void and unenforceable.”

In addition, it is alleged that the company violated other California real estate laws: the state’s Do Not Call Law, and the Truth in Lending Act. The contracts also break a new law that goes into effect on January 1, which would impose a two-year limit on exclusive listing agreements.

The complaint does not detail how many homeowners in Santa Barbara may have signed contracts with MV Realty, but according to the court documents, individuals who were victimized by the company would be compensated for interest, money, or other property that was acquired illegally.

“Homeowners in Santa Barbara County and the entire state are entitled to protection from fraudulent schemes that deceive them into unfair, one-sided, multi-decade obligations,” said Santa Barbara County District Attorney John Savrnoch.  “We look forward to working alongside the California Attorney General’s Office and the Napa County District Attorney’s Office in seeking justice in this case.”