Arizona AG sues MV Realty over alleged deceptive homeowner agreements

Arizona Attorney General Kris Mayes has initiated legal action against MV Realty and its associated entities, accusing them of operating a deceptive scheme that targeted financially vulnerable homeowners. The lawsuit, filed under the Arizona Consumer Fraud Act and telephone solicitation laws, focuses on MV Realty's Homeowner Benefit Program. This program offered homeowners immediate cash in exchange for granting MV Realty the exclusive right to act as their listing agent should they decide to sell their property.

The complaint alleges that MV Realty failed to adequately disclose crucial terms of these agreements, including a 40-year duration that could bind heirs and substantial early termination fees. Furthermore, the company allegedly recorded memorandums against homeowners' properties, which functioned as liens, potentially preventing property transfers or hindering homeowners from obtaining loans unless significant fees were paid. Attorney General Mayes stated that homeowners were misled and trapped by these practices, losing hard-earned equity.

MV Realty marketed its program through various channels, including telemarketing that allegedly violated Do Not Call Registry rules. Organizations like the American Land Title Association and AARP have applauded Arizona's action, emphasizing the importance of homeowners' ability to freely make decisions about their property without long-term contractual barriers. The Arizona Attorney General's Office is seeking civil penalties, restitution for affected homeowners, and injunctive relief, specifically requesting the termination of the memorandums recorded against their properties.

MV Realty launched its program in 2020 and, at its peak in 2023, reported enrolling over 35,000 homeowners across 33 states and paying out nearly $40 million. However, following lawsuits from multiple state attorneys general starting in late 2022, the company suspended the program in February 2023 and subsequently filed for Chapter 11 bankruptcy protection in September 2023.