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Read the Fine Print as African Americans Fall Prey to Unethical Real Estate Practices

Photo Credit: Jessica Gallagher

It’s important for folks to be careful when it comes to accepting cash advances.

Recently, Brian Oliver was desperate for some extra cash to help him until his next disability payment. He ended up finding an offer for no-interest cash while searching for a loan online.

He jumped on it.

“They said, ’We’re going to give you $400 and you don’t have to give it back,’” said Oliver, 64, according to The Baltimore Banner. “’We just want to be your real estate agent.’”

But the Baltimore resident said he missed the print that said by accepting the cash, he granted the MV Realty of Maryland, LLC, the exclusive right over the long haul to list his Park Heights row home. If Oliver sells with someone else, he would owe the company thousands.

The arrangement: 40 years.

Since late 2021, Oliver is one of hundreds of Maryland homeowners who signed “homeowner benefit agreements” with MV Realty.

Lawyers, real estate professionals, and consumer advocates have described this practice as predatory.

MV Realty has put a stranglehold on homeowners across the state – those who perhaps were persuaded by the cash without a full understanding of the agreement – into agreements that last decades and they are only breakable by paying a “termination fee” equal to 3% of the home value as approximated by the company. If a homeowner, on purpose or on accident, breaks the agreement, the termination fee will be secured by a “lien on the property.”

“If they would have told me, ‘You’re locked into this for 40 years,’ I would have said, ‘I’ll see you later,’” Oliver said. “If they’d have told me, ‘In order to get out of this contract, you’ve got to pay me 3%of whatever the total home value is, ‘I would have said some nice words. But you didn’t tell me this up in the beginning.”

MV Realty spokeswoman Diana London said in a statement “the terms are, in fact, written in plain English and always signed in the presence of a notary. Of the thousands of payments we’ve made upfront, only a tiny percentage of those homeowners have expressed confusion about our agreements,” she said. “And we work hard with each homeowner, when those situations present themselves, to try and re-familiarize them with the agreement signed and how we can make it right together.”

Still, consumer advocates are concerned that homeowners’ options are limited once they sign. The agreements require disputes be settled in arbitration as opposed to in court – a process that research reveals is more likely to be resolved in a company’s favor. They also require homeowners to waive their right to participate in class action lawsuits or class reliefs.

“What they’re receiving in terms of consideration is so small compared to the rights that they’re giving up. The inequities are just so great,” Rebekah Lusk, a Maryland attorney who practices real estate law, said.” It’s an absolutely predatory agreement.”

Executive Director of nonprofit Live Baltimore, Annie Mill, said she had never seen an agreement like this.

“This is not how a real estate business typically operates,” Mill said.

Approximately 400 of these agreements have been documented in city and county land records across the state of Maryland, but likely there are more, as it can take a few months for a completed agreement to be recorded in local court.

In addition, those who sign the agreements have received just a few hundred dollars, with the average being just $662.26.

In Baltimore, the majority of those impacted are African American neighborhoods.

In all, the reality company has 30,000 agreements across the country.


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