ATLANTA — Georgia’s Attorney General is taking legal action against a real estate company that has been accused of locking homeowners into unfair 40-year listing agreements.
Those agreements, called the Homeowner Benefit Program, have been the focus of a series of Channel 2 Action News investigations over the past 3 years.
In a new lawsuit, Chris Carr said those agreements and the penalties MV Realty collects are illegal in Georgia.
The suit alleges that “the Homeowner Benefit Program is a predatory business model.”
Channel 2 consumer investigator Justin Gray’s reporting is cited in the lawsuit.
Gray has learned that MV Realty is still enforcing the listing agreements.
A Georgia homeowner called Gray this week about the lien blocking the sale of her house unless she pays a big penalty.
This lawsuit from Carr alleges those penalties violate the law.
“The complaint is alleging essentially deception here,” said Sarah Mancini from the National Consumer Law Center.
Gray has reported in a series of Channel 2 Action News investigations about MV Realty’s homeowner benefit program. You get a small check now, but a big penalty later – 3% of the value of your house -- if you don’t use them to sell your house.
Homeowners told us repeatedly they did not understand those deals.
Last year, the General Assembly outlawed the liens for contracts going forward, but it had no impact on those contracts already signed.
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Georgia’s attorney general uncovered new information finding that MV Realty made or initiated over 550,000 telemarketing calls to Georgia consumers, alleging those telemarketers do not state they are calling on behalf of MV Realty and that they used “spoof” numbers.
“It’s a really big deal for the Georgia Attorney General to say, ‘We are going to stand up on behalf of consumers and pursue this company because most of the consumers that were that entered into these contracts are not otherwise going to have the ability to protect themselves,’” Mancini said.
Homeowners like Ira Dorin told Gray about paying those MV penalties that are illegal.
“I had to pay MV Realty over $9,000,” Dorin said.
The Attorney General claims are they are finding that in 2021 and 2022, MV Realty collected no fewer than 124 of those fees. The suit alleges those fees are “deemed penalties under Georgia law that are unenforceable. The MV Realty Defendants continue to collect unlawful penalties.”
“It does appear the company is still attempting to collect on these contracts, even though Attorneys General around the country have alleged that these contracts are illegal,” Mancini said.
Georgia is now the ninth state where the attorney general has filed suit against MV Realty.
The company has filed for bankruptcy protection and next month will go before a bankruptcy judge to ask him to halt all the AG lawsuits, including Georgia.
The lawsuit seeks a court order stopping the practices, civil penalties and restitution for consumers.
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