Maryland lawmakers have approved legislation to prohibit exclusive real estate listing agreements that bind homeowners for more than one year.
The legislation, sponsored by Del. Marlon Amprey, was drafted in response to the practices of a real estate company, MV Realty, which incorporated in Maryland in late 2021. In less than a year, the company locked hundreds of homeowners across the state into 40-year contracts granting it the exclusive right to list their homes for sale.
As The Banner reported in October, these agreements are breakable only by paying a “termination fee” equal to 3% of the home value as estimated by the company. If a homeowner, or any heir — on purpose or by accident — does break the agreement, the termination fee is secured by a lien on the property.
Homeowners interviewed by The Banner at the time said that they did not fully understand the fine print of the agreement and were enticed by the cash offered in exchange for signing the agreements— often just a few hundreds dollars. In Baltimore, the majority of affected homes are located in predominantly African American neighborhoods on the east and west sides of the city.
“[Lawmakers] were really appalled and didn’t know that these kinds of agreements were taking place,” said Amprey, a Baltimore Democrat. “It’s going to protect a lot of people’s homes, and it’s going to protect a lot of Black wealth in my district.”
In March, the company said that it had stopped offering new agreements nationwide after attracting scrutiny from lawmakers and regulators. By then, the company had recorded over 30,000 agreements across 33 states.
The suspension of new contracts came as the Florida-based parent company works “to address the concerns raised by regulators and legislators,” a company spokesperson wrote in a statement to The Baltimore Banner. “The Company remains confident that the Homeowner Benefit Program fully complies with the law and benefits consumers who receive a cash incentive to select MV Realty as their listing agent.”
Amprey said that the bill remains important even after the company’s temporary halt of new contracts.
“MV Realty has been doing it, but other companies can do it, too,” Amprey said in March. “We want to make sure that if other companies try to consider it, they know that they can’t.”
Regulators across the country have also taken action against the company in recent months. Attorneys general in Florida, Pennsylvania, Massachusetts, Ohio and North Carolina have filed lawsuits against the company, and the Federal Communications Commission in late January ordered phone service providers to block MV Realty calls in what it called “decisive actions to shut down an apparent homeowner-focused robocall scam campaign.”
If the bill is signed into law, Maryland will become the seventh state in the country to pass similar legislation since the beginning of March.
Baltimore Banner reporter Pamela Wood contributed reporting.