By Catherine Reagor | Arizona Republic
A bill to stop real estate firms from soliciting homeowners to sign “deceptive and predatory” agreements locking them into how they sell their property was signed into law by Arizona Gov. Katie Hobbs.
The legislation, Senate Bill 1218, was crafted to stop long-term listing contracts that cloud a house’s title and make it tougher for homeowners to sell.
“This new law is a response to recent examples of egregious and deceptive practices in the real estate industry, which underscored the need for stronger laws to protect homeowners,” Arizona Attorney General Kris Mayes said in a statement.
The new Arizona law prohibits exclusive property agreements lasting longer than a year and that bring a lien against a home. The new regulations also prohibit courts from enforcing property agreements that violate the rules.
One company, MV Realty, faces lawsuits in other states and complaints in Arizona over its practices that involve using robocalls to find homeowners who sign contracts that guarantee they use the firm to sell or pay a hefty price.
The Florida-based real estate firm typically paid homeowners $500 to $3,000 if they signed an agreement to pay MV Realty 3% of the sales price if they sold their house within 40 years and regardless if it was listed with the real estate firm, according to property documents and lawsuits.
MV Realty filed for bankruptcy in September and didn’t respond to requests for comment.
Her office also called the practices deceptive and predatory.
Arizona Department of Real Estate Commissioner Susan Nicolson said her office would continue to refer complaints against MV Realty to the state Attorney General’s Office for investigation.
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