Be aware that there’s a company out there offering a cash advance to homeowners willing to provide them the exclusive right to list the property for a period of 40 years. The interest is recorded in the public record. And three lawsuits filed against the company allege that the agreements the company provides their customers give the brokerage the right to foreclose on their clients homes if the homeowners’ heirs don’t assume their liability upon death.
The state of Florida has recently asserted that these kinds of agreement are illegal under Florida law. Real Trends (registration required) did a nice job shining some light on the process, and it’s not just happening here (nor is it only illegal here). The states of Pennsylvania and Massachusetts have now joined Florida in filing suit against a brokerage called “MV Realty,” alleging, among other things that the company targeted low-income and elderly homeowners and that they used deceptive and misleading marketing.
The article continues:
“The Attorney General in Florida stated that these liens are illegal under Florida law. MV Realty made more than 9,123 public record filings that might ‘cloud’ homeowners’ titles and Hillsborough County is one of the counties with a high number of public record filings, according to the attorney general’s office. At least 588 people in northeast Florida and southeast Georgia have signed up to the program.”
In addition, shortly before the time of this post’s publication, a Massachusetts court had granted a preliminary injunction prohibiting “homeowner benefit agreements” such as these from being offered or enforced until the pending case is resolved.
As always, we’ll keep an eye on this at FAN and continue to work with our real estate partners as well. We’ve already begun training our employees about where and how to spot the issue, and what to do. As we’ve always said, an up-front title search is the one of the most effective ways to protect all parties, especially when it comes to programs of questionable or unproven value. If you’d like to learn what to look for or how we can help you help your clients, don’t hesitate to drop us a note or give us a call.