Real Estate company HomeOptions settles claims over predatory practices and unlawful contracts

SACRAMENTO, Calif. – On Monday, California Attorney General Rob Bonta announced that a settlement has been reached with HomeOptions and its CEO over a predatory real estate scheme that impacted over 500 homeowners statewide.

The civil action was a joint partnership between the Attorney General's Office and the District Attorneys of Napa and Santa Barbara counties stated a press release from the Attorney General's Office.

According to the Attorney General's Office, the company lured vulnerable homeowners with immediate payments ranging from a few hundred dollars to a couple thousand dollars in exchange for exclusive rights to the homeowners listing agent for the next 20 years, entered into unlawful contracts with those homeowners, deceptively recorded liens against the homes, and forced homeowners to pay tens of thousands in illegal fees to remove those liens.

"Homeowners are entitled to be safe in their homes and not fall prey to scams intended to extract their home equity," stated Santa Barbara County District Attorney John Savrnoch. "This settlement rightly provides full restitution to all victims and prevents HomeOptions and its CEO from engaging in these practices again."

The Attorney General's Office detailed that HomeOptions Inc., and HomeOptions Real Estate LLC, and Chief Executive Office/Chief Financial Office Kevin Li entered a stipulated agreement that required the real estate business to:

• Terminate all liens levied on California homes. Homeowners often could not transfer titles or obtain home loans without paying HomeOptions to terminate those liens.
• Void all contracts that it entered into with California homeowners. Those contracts required homeowners to pay often steep fees if they did not use HomeOptions real estate agents.
• Pay full restitution to homeowners who previously paid illegal fees to the company totaling $400,000
• Pay about $170,000 in civil penalties

HomeOptions misrepresented the nature of these contractual agreements, included unlawful breach and early termination penalty terms, violated California's Real Estate Law, state and federal telemarketing law, and federal lending laws explained the Attorney General's Office.

"HomeOptions’ business practices can be summed up in one word: predatory. This settlement holds the company accountable and provides immediate relief to California homeowners," said California Attorney General Bonta. "Homeowners will regain full control over their homes, without having to worry about a HomeOptions lien ever again. And homeowners who have already paid early termination penalties to HomeOptions will get all of their money returned. Let there be no doubt that, in California, we will enforce the law against unscrupulous businesses that exploit vulnerable consumers."

On Oct. 8, 2023, Governor Newsom signed a bill authored by local Assemblymember Gregg Hart -Assembly Bill 1345- into law that took effect on Jan. 1, 2024.

The law imposes a two-year limit on exclusive residential listing agreements and prohibits the filing of those agreements with a county recorder.

HomeOptions stopped entering into California homeowner agreements in 2024 shared the Attorney General's Office.