MV Realty Temporarily Ordered to Stop Business in California
Florida-Based Real Estate Brokerage Accused of Scamming More than 1,400 Homeowners Across State
This article was underwritten in part by the Mickey Flacks Journalism Fund for Social Justice, a proud, innovative supporter of local news. To make a contribution go to sbcan.org/journalism_fund.
[Updated: Fri., Sept. 27, 2024, 6 p.m.]
The state’s superior court has ruled that Florida-based real estate brokerage MV Realty must stop its business in California, at least temporarily. On September 17, California Attorney General Rob Bonta announced in a press release that he had obtained a preliminary injunction against the firm, which is accused of scamming more than 1,400 homeowners across the state.
Christopher Dalbey, a senior deputy district attorney for Santa Barbara County, said that the office knows of about 10 people in the county who were MV realty customers with liens recorded against their property. Liens are legal claims to a property for creditors until a debt on that property is repaid.
“The injunction states that the defendants have to record termination of those liens within 30 days from the court order,” Dalbey said. “It also says that the defendants shall not enforce the underlying contract, which is called a Homeowner Benefit Agreement.”
In other words, according to Santa Barbara County’s District Attorney John Savrnoch, MV Realty can’t enforce the agreements made with their clients.
“They won’t be able to then reinforce new liens because they are now no longer allowed under California law,” he said.
The preliminary injunction was ruled on September 13, about nine months after the complaint was filed.
The State alleges that MV Realty promoted its Homeowner Benefits Program to hundreds of thousands of California homeowners through telemarketing and online ads, offering a few hundred to a few thousand dollars of cash in exchange for the opportunity to work as the homeowner’s real estate agent if they sold their home in the future.
In reality, the state claims that homeowners would almost always need to repay the cash offer tenfold. The homeowners would also enter into a 40-year contract obligating them to use MV Realty as their only real estate agent should they want to list their home.
Dalbey said that MV Realty has filed a notice of appeal to the California Court of Appeals, meaning the court still needs to determine whether or not the injunction will remain in place.
“If the ruling is upheld, all the way up the Appellate Court System, then the liens would have to be terminated,” Dalbey said. “All the other issues in the case, whether or not homeowners get any money back, whether or not the underlying contracts are illegal or not, that’s still to be determined by a trial.”
California’s Office of the Attorney General, along with Santa Barbara County’s Office of the District Attorney and Napa County’s Office of the District Attorney, said that although MV Realty has appealed, they believe the injunction is enforced and that MV Realty must comply with it.
According to its website, broker Amanda Zachman founded MV Realty in 2014 and has expanded to 33 states in the past decade. The firm said that its Homeowner Benefits Program grew from about 7,700 contracts in 2021 to about 32,000 in August 2022. In September 2023, MV Realty filed for Chapter 11 bankruptcy, allowing it an opportunity to restructure its business.
The company has faced litigation from several states, including North Carolina, Massachusetts, Florida, Pennsylvania, Ohio, New Jersey, and Indiana.
Editor’s Note: This story was updated to add a clarification from the California’s Office of the Attorney General that they and Santa Barbara and Napa counties’ DA’s offices believe the injunction is enforced and that MV Realty must comply with it despite MV Realty’s appeal.
