DENVER — Two years ago, Colorado homeowners started filing complaints with the Colorado Department of Regulatory Agencies (DORA) about a real estate company that was filing questionable liens on Colorado homes. This month, the Colorado Division of Real Estate has finally posted disciplinary actions against MV Realty.
Steve on Your Side first reported on MV Realty's Homeowner Benefit Program in 2023. The listing contracts offer a small amount of cash to homeowners up front in exchange for a promise: let MV Realty be the listing agent if and when you ever sell your home. The agreement guarantees the company a portion of the commission for the real estate sale.
The fine print on the agreements binds the contracts to the land, meaning even if a homeowner dies, their successors still have to follow the terms. And the agreements are valid for 40 years. To ensure that the agreement is known and enforced, MV Realty files a memorandum with the local county clerk and recorder tied to the property.
"In the real estate world, nothing like this exists, I've never heard it," said Steven Pilkington, who has been a real estate broker since 2008. He first came across MV Realty when he stepped in to help sell a house in Parker. The homeowner worked with MV Realty for over a year but the house was still on the market.
"They were not able to sell it, they were not able to get an offer. And they weren't able to get even many showings on the property," Pilkington said. His team did manage to broker a deal. That's when they came across the Homeowners Benefits Agreement filed against the property by MV Realty. The contract guarantees MV Realty a commission of $21,819.90 whether MV Realty sells the property or not.
"My first reaction was, like, this can't be legal, like, this doesn't seem like it's legal," said Pilkington.
In 2022 Colorado's legislature passed Senate Bill 23-077, prohibiting the creation of a lien or encumbrance by a broker, but this law is not retroactive.
Steve on Your Side searched through clerk and recorder records in counties throughout Colorado and found that more than 900 homeowners had already signed these agreements between 2021 and 2023.
DORA received multiple complaints in 2022, alleging, among other things, that MV Reality was engaging in dishonest dealing, violating rules and regulations, not disclosing conflicts of interest and using prohibited remedies for compensation.
Two years later, DORA has now posted disciplinary action on their broker license lookup website. This action includes a $23,000 fine and an agreement that MV Realty permanently surrenders their license by Sept. 23, 2024.
DORA told Steve on Your Side that "The Real Estate Commission doesn't have the authority to void or negate the agreements that MV Realty entered into with consumers.”
"This contract is based on them having the ability to sell it, which now they've lost the ability to sell it in the state of Colorado. If they lose the ability to sell the property legally, is the contract still in place?" asked Pilkington.
Pilkington hopes to move forward on his upcoming closing and avoid paying MV Realty any commission. "Depending on what comes out of this, I probably advise my client to speak with legal counsel, to see if this MV Realty is just null and void," he said.
The Colorado attorney general cannot comment on if they plan to seek a remedy for the agreements already filed or whether Colorado will be joining lawsuits suits filed by at least seven other states against MV Realty.
If you have one of these agreements, or you have any other consumer problem, contact the Steve On Your Side team.