Lansing, Michigan – A few hundred dollars in quick cash could leave a Michigan homeowner tied to the same real estate company for decades. That is the heart of a new lawsuit filed by Attorney General Dana Nessel against three MV Realty LLCs.
The case, filed in Ingham County’s 30th Circuit Court, alleges that MV Realty used its “Homeowner Benefit Program” to place long-term restrictions on homes while presenting the payments as money that did not need to be repaid. More than 1,000 Michigan homeowners entered the agreements, according to the state, and over 900 remain active.
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Most participants received only about $300 to $500. In return, however, the Attorney General alleges that MV Realty obtained an exclusive 40-year right to represent the homeowner if the property was sold. Homeowners could then face a commission of 3% to 6% of the sale price or a substantial early termination fee.
The state’s lawsuit against MV Realty also alleges that the agreements were recorded in homeowners’ chains of title, effectively creating liens on their properties.
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Some consumers told the Michigan Department of Attorney General’s Consumer Protection Team that the agreements prevented them from selling or refinancing their homes. According to the complaint, homeowners who asked MV Realty to release the restrictions were instead told they would need to pay large termination fees.
“Homeownership is, for most Michigan families, their single largest financial investment,” Nessel said.
“Nobody deserves to be swindled out of a lifetime investment, and the law doesn’t tolerate deceptive schemes to hold consumers’ hard earned home equity hostage for payment.”
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The lawsuit further alleges that MV Realty cannot legally provide brokerage services in Michigan because it does not hold a valid Michigan real estate broker’s license or employ properly licensed staff to provide those services.
Nessel’s office claims MV Realty misrepresented key parts of the program, including whether the payments were loans, how long homeowners were obligated to work with the company and whether the recorded agreements amounted to liens. The state also alleges that the effective interest collected through commissions or termination fees exceeded 25% annually in some cases.
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The Attorney General is asking the court to invalidate or limit the agreements, stop MV Realty from collecting certain commissions and termination fees, order restitution for affected homeowners, award damages where appropriate and impose civil penalties.