Minnesota Attorney General Keith Ellison announced a settlement to his September 2024 lawsuit against MV Realty that nullifies the so-called “Homeowner Benefit Agreements” (HBAs) in the contracts the company offered homeowners.
In the settlement, MV Realty is permanently banned from doing business in Minnesota and the company’s main officers — Anthony Mitchell, David Manchester, and Amanda Zachman — must refrain from engaging in residential real estate brokerage work in the state for five years. Zachman is also required to pay $10,000 to resolve allegations that she practiced real estate in Minnesota without a license.
MV Realty will return certain penalties it collected from individuals who may have unknowingly violated the HBAs. Individuals eligible for restitution include heirs of estates from which MV Realty collected an “Early Termination Fee” for selling a home which, due to the actions of a deceased family member, was subject to an HBA. The company must also alert county recorders that its HBAs are null and void.
In his lawsuit, Ellison accused MV Realty of selling HBAs to Minnesotans as a way for a homeowner to receive, up-front fast and easy cash from MV Realty, with the homeowner’s only obligation being to use MV Realty as their realtor in the future if the homeowner were ever to sell their home. If the homeowner agreed, a third-party notary with no information about the contract was sent to the home to secure the deal.
Among the terms of the contract was an unbreakable 40-year pact with MV Realty that bound the homeowner’s heirs and inheritors to using MV Realty. Ellison said the contracts contained unlawful and unenforceable liquidated damages clauses, dubbed “Early Termination Fees,” which penalized a homeowner or their heirs in the amount of 3% of their home’s value if they violated the contract by hiring another realtor.
Ellison stated that MV Realty sought to enforce the contracts through documents called “Memoranda” that MV Realty filed on every homeowner’s property title record with their local county recorder.
“Minnesotans deserve to know what they’re signing up for, not just in some fine print buried a sub-contract away, but up-front and obvious,” Ellison said. “We talked to hundreds of people across the state, and they all told us the same thing: If I’d have understood what I was signing, I never would have done it. I’m pleased we’ve gotten people and their families out of these deceptive, oppressive contracts and that we’ve banned this company from ever doing business in Minnesota again.”
