Chicago – Attorney General Kwame Raoul today filed a lawsuit against MV Realty PBC, LLC and MV Realty of Illinois, LLC, as well as corporate managers Amanda Zachman, Antony Mitchell and David Manchester, for allegedly tricking financially strapped consumers into confusing and convoluted 40-year real estate brokerage contracts.
In the lawsuit, filed in Cook County Circuit Court, Raoul alleges the defendants market themselves as a real estate brokerage firm providing a “one-of-a-kind,” “innovative” way to conduct real estate transactions. In reality, MV Realty aggressively targets vulnerable consumers in dire need of money and locks them into contracts spanning decades with hidden fees and severe limits on their ability to sell their homes.
“MV Realty takes advantage of vulnerable consumers by trapping them in 40-year contracts with steep termination fees that make it nearly impossible to sell or refinance their homes,” Raoul said. “I am committed to seeking enforcement against businesses that violate the law to take advantage of Illinois consumers.”
According to Raoul’s lawsuit, MV Realty induces consumers to enter a 40-year contract called a Homeowner Benefit Agreement. The contract is disguised as a simple agreement for future real estate listing services. However, the contract obscures the defendants’ actual business model, which is based on extracting so-called “early termination fees” from unwitting consumers if they attempt to sell or otherwise transfer their homes. These “early termination fees” can cost tens of thousands of dollars. The contract also provides for the filing of a “memorandum” against consumers’ homes that restricts their ability to sell or refinance for decades.
Raoul’s lawsuit seeks to prohibit the defendants from engaging in any practices that violate the Consumer Fraud Act and Deceptive Business Practices Act. Raoul asks the court to find all contracts between the defendants and consumers affected by the unfair and deceptive practices void, unenforceable, or rescinded. In addition, Raoul seeks to prohibit the defendants from working in the real estate industry in any capacity; revoke all licenses, charters, franchises, certificates, or any other evidence of authority to do business in Illinois; and require they pay full restitution to all affected consumers. Raoul is also seeking civil penalties.
MV Realty PBC, LLC and MV Realty of Illinois, LLC are located in Florida. MV Realty PBC, LLC operates in 33 states nationwide. Amanda Zachman, Antony Mitchell, and David Manchester are corporate managers of both companies and are Florida residents. The defendants face additional lawsuits from the state attorneys general of California, Georgia, Florida, Indiana, Massachusetts, Missouri, North Carolina, New Jersey and Pennsylvania.
Assistant Attorneys General Alan Williams and Lilia De La Torre, and Consumer Counsel Thomas James, are handling the case for Raoul’s Consumer Fraud Bureau.
Consumers who believe they have been a victim of deceptive practices can file a complaint on the Attorney General’s website or by calling Raoul’s Consumer Fraud Hotline at 1-800-243-0618.
