Santa Barbara County DA joins state AG’s lawsuit against Florida-based real estate company

SANTA BARBARA COUNTY, Calif. — State Attorney General Rob Bonta announced on Thursday it filed a lawsuit against a Florida-based real estate company, claiming the firm engaged in a predatory scheme on California homeowners.

According to the lawsuit filed at the Los Angeles Superior Court, the Florida-based company, MV Realty, allegedly locked homeowners into 40-year exclusive listing agreements and placed illegal liens on their homes.

Santa Barbara County and Napa County District Attorney’s Offices also joined the state AG into the investigation of the real estate firm.

The lawsuit claims that about 1,500 CA homeowners signed agreements with MV Realty, which lured homeowners with an immediate payment between hundreds to thousands of dollars. The agreement also gave the homeowner’s real estate agent the capacity to sell the homeowners home in the future.

“MV Realty is a financial predator. Through its one-sided agreements, the company lined its own pockets at the expense of vulnerable homeowners in California, holding their most valuable assets hostage. To this day, it refuses to release homeowners from those agreements,” said Attorney General Rob Bonta. “MV Realty’s actions demand accountability. That’s why we have filed our lawsuit.”

According to the lawsuit, MV Realty also misrepresented the downsides of its agreements, including that it places a lien on the homeowner’s property, preventing them and their successors from transferring their home without paying MV Realty 3% of the home’s value.

The Florida-based real estate firm can also allegedly delay or prevent a homeowner from obtaining or refinancing home loans. 

The state claims that MV Realty charges homeowners "an illegal" 3% penalty if they sell their homes without using MV Realty. MV Realty is also able to cancel their agreement and refuse to lift its liens unless homeowners pay the "illegal" penalty.

"Homeowners in Santa Barbara County and the entire state are entitled to protection from fraudulent schemes that deceive them into unfair, one-sided, multi-decade obligations,” said Santa Barbara County District Attorney John T. Savrnoch. “We look forward to working alongside the California Attorney General’s Office and the Napa County District Attorney’s Office in seeking justice in this case.”

The state AG also claims that MV Realty:

• Deceptively marketed its predatory exclusive listing agreements
• Placed illegal liens on homes and charged homeowners illegal penalties for canceling or breaching the agreements
• Signed its agreements through individuals not licensed to practice real estate in California, rendering those agreements void and unenforceable
• Violated other California real estate laws, California’s do-not-call law, and the Truth in Lending Act

California along with other states recently passed legislation prohibiting fraudulent such as the claims against MV Realty.

Governor Gavin Newsom signed into law AB 1345 in October of this year, which goes into effect at the start of 2024. Inside AB 1345 the bill imposes a two-year limit on residential exclusive listing agreements and clarifies agreements cannot be filed with a county recorder.

MV Realty filed for bankruptcy on September 22, 2023.

The states DOJ will file motions necessary to protect its interests in that bankruptcy action.