MV Realty Reaches Settlement With California Authorities

A legal dispute headed for Los Angeles County court involving a Florida-based real estate firm has come to a close.

Last week, California Attorney General Rob Bonta announced a settlement with MV Realty, its CEO and its COO over a “predatory scheme” targeting “financially vulnerable homeowners,” the attorney general’s office said in a news release.

MV Realty was accused of “provid[ing] immediate cash payments” to homeowners “in exchange for the exclusive right to be their listing agent if they ever sold their homes in the next 40 years.” As part of those agreements, the company misled consumers about the terms of these homeowner agreements and, unbeknownst to them, recorded liens on their homes, which prevented the homeowners and their successors from transferring their home unless they paid MV Realty tens of thousands of dollars in what it called “early termination fees,” according to the attorney general. The liens also could have prevented homeowners from refinancing their homes or getting home equity loans.

The settlement requires MV Realty to terminate all of its liens, pay back homeowners who paid early termination fees and void its homeowner agreements. The firm also faces financial penalties and restrictions on future business activity in California.

MV Realty broke into the California market in early 2022. In December 2023, Bonta and the Santa Barbara County and Napa County district attorneys’ offices filed a suit against MV Realty for its alleged moneymaking scheme. In September 2024, the authorities secured a preliminary injunction against MV Realty, which was later upheld on appeal in December. As a result, MV was required to terminate its liens.

Had MV Realty not reached the settlement, the trial would have started June 10 in the Superior Court of Los Angeles County. The agreement bars MV Realty, its CEO and its COO from engaging in any business in California that requires a real estate license for five years. It also forces the firm to pay back those affected, including more than $1.3 million in restitution and $1.2 million in civil penalties for a total monetary judgment of $2.5 million.

California is among a handful of states that have passed legislation prohibiting fraudulent listing agreement schemes such as this one. Gov. Gavin Newsom signed AB 1345 into law in October 2023, which creates a two-year shot clock on residential exclusive listing agreements.

MV Realty filed for Chapter 11 bankruptcy in September 2023. The U.S. Bankruptcy Court for the Southern District of Florida dismissed the case in May 2024.

— Chris Malone Méndez