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BrokerageLegalReal Estate

Minnesota targets right-to-list agreement firm MV Realty in new lawsuit

A lawsuit filed by Minnesota’s attorney general claims that MV Realty illegally recorded liens and engaged in deceptive trade practices

MV Realty is facing more legal action, this time in Minnesota. The firm — which is now infamous for its right-to-list agreements — is being sued along with its Minnesota branch, MV Realty of Minnesota, and the companies’ shared executive, Amanda Zachman.

Minnesota Attorney General Keith Ellison filed suit in late September in Ramsey County, charging MV Realty with unfair and deceptive trade practices. Under now-bankrupt brokerage MV Realty’s right-to-list agreement — which it calls a Homeowner Benefit Agreement (HBA) — a homeowner signs over the right to list their home for the next 40 years to MV Realty in exchange for a cash payment.

If a homeowner decides to sell their house sometime in the next 40 years, MV Realty is entitled to list the home for a 3% commission, which is separate from the commission of a buyer’s agent. If the homeowner breaks the agreement or decides to terminate the agreement early, the homeowner must pay MV Realty 6% of the appraised value of the home.

In the suit, the Minnesota attorney general’s office calls these terms “oppressive” and alleges that MV Realty “deceptively concealed these unfair terms in their verbal sales pitches.” The suit alleges that if the homeowner agreed to take part in MV Realty’s program, “a third-party notary with no information about the contract was sent to the home, where the homeowner was presented with a multi-page contract with small font and confusing legal jargon for the first time and told to sign.”

The complaint also claims that MV Realty’s HBAs are liens, despite the firm’s public claims that they are not. The AG’s office alleges that MV Realty informed its investors that the agreements were liens.

According to the attorney general’s office, MV Realty entered into “hundreds” of these agreements in Minnesota. Ellison also claims that most Minnesota homeowners who had signed agreements with MV Realty “reported not being aware of the terms in the contract, and many also reported that MV Realty agents deceived them about key terms, including telling homeowners that the contract length was far shorter than 40 years, or that the contract would terminate if MV Realty was unable to sell the home.”

“Companies have an obligation to tell you what they’re selling you,” Ellison said in a statement. “They have an obligation to give you the truth about what you’re being asked to sign, not to give you some half-truths when they have reason to know that very few people would agree to the terms they’re hiding. And, obviously, companies are not allowed to lie to consumers. MV Realty’s behavior has been predatory, immoral, and illegal, and we will be holding them accountable for their actions.”

Additionally, the suit claims that Zachman, who signed many of the agreements for MV Realty in Minnesota, “lacked proper Minnesota licensure to do so, and that every contract and every sale failed to comply with Minnesota’s Home Solicitation Sales Act.”

The suit also alleges that MV Realty has even sued the relatives of dead homeowners, in order to prevent the sale of an estate with another brokerage and/or to recover its early termination fee of 3% of the home’s value.

“MV Realty even sued a homeowner whose home had gone into foreclosure, thereby ‘violating’ the HBA,” the suit added.

MV Realty did not return a request for comment.

MV Realty previously operated in 33 states and had more than 500 real estate agents. Since starting its Homeowner Benefit Program in August 2020, MV Realty said it had enrolled more than 35,000 homeowners and had paid homeowners nearly $40 million. In February 2023, the company announced that it was pausing the signing of new right-to-list agreements.

Right-to-list agreements, also known as Non-Title Recorded Agreements for Personal Service (NTRAPS) — were banned in 30 states as of June 2024. More recently, in September, the California attorney general’s office secured a preliminary injunction in its suit against MV Realty, requiring the firm to remove the liens it has recorded, not record any new liens and prevent it from enforcing the terms of HBA.

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