The Florida Attorney General’s Office is suing a Delray Beach-based real estate broker for using deceptive business practices to prey on vulnerable homeowners. The lawsuit, filed Tuesday in Hillsborough County Circuit Court, alleges that the company, MV Realty, used a “complex and fraudulent scheme” to defraud consumers out of their home equity.
In September, the Tampa Bay Times reported on MV Realty’s “Homeowner Benefit Program.”
Homeowners who sign up can receive upfront cash payments of between $300 and $5,000 if they agree to give the brokers exclusive rights to list their homes. Many homeowners don’t realize that the contract lasts 40 years and allows MV Realty to place a lien on their home.
If the agreement is broken, MV Realty can try to enforce the lien and collect 3% of the home’s value. The liens can also make it difficult for homeowners to refinance or access their home equity.
The attorney general’s lawsuit states that the liens are illegal under Florida law. It also said the company used unfair advertising and marketing practices, including making misleading claims on its website and not calling consumers on the do-not-call list.
“For many Floridians, their home is their most important asset and the cornerstone of their financial stability,” Attorney General Ashley Moody said in a statement. “For a company to prey on unsuspecting homeowners in a way that locks them into a 40-year obligation designed to take equity away from the property is disgraceful.”
The Attorney General is asking the judge to enjoin MV Realty from enforcing any of its current homeowner benefit contracts and prevent the company from engaging in deceptive business practices in the future. It also requests that MV Realty be ordered to return the money it wrongfully took from homeowners and pay civil penalties.