Subway owners who signed up for quick cash say they didn’t know about the 40-year pledge – WSB-TV Channel 2

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ATLANTA — A real estate firm is offering subway owners a check for a few hundred dollars, but it comes with a four-decade commitment.

Owners who signed on the dotted line said Justin Gray, Channel 2 Consumer Investigator they were misled about the terms of a deal that could cost the owners tens of thousands of dollars.

“Do you ever want to sign a 40-year contract? Gray asked Julia Henry, 75. “No,” she said. “I would never do that.”

Henry was looking for a grant to fix the plumbing in his home in Columbus, Georgia. In an affidavit, Henry said she left school in sixth grade and could not read very well. So his family taught him how to use a voice text feature on his cellphone. After “asking Google” for financial help, she ended up on the phone with a company she said had offered to give her around $500 to help with her home.

When a woman came to her house in late February 2021 and asked Henry to sign papers for $425, she said it didn’t seem unusual because she had received grants in the past.

“She said, ‘sign right there, sign right there’ and I kept signing,” Henry said.

Henry said she later learned she had signed a contract called a Homeowners Benefit Agreement with Florida-based MV Realty to give them the exclusive right to list her home for the next 40 years. .

In court records, Henry said she never read the contract and never received a copy of the documents. Henry was later sued by MV Realty for breaching his contract after putting his house on the market with another real estate company.

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Via email, MV Realty said Channel 2 Action News they believe Henry’s claim that she cannot read is “dubious at best”. MV Realty dropped its lawsuit and canceled the lien on its home after its lawyer fought back in court.

Disabled Navy veteran Ira Dorin said he received an out of the blue call from a telemarketer during dinner.

“I got a phone call from a gentleman who said it was from MV Realty,” Dorin told Gray. “[He said] we are organizing a promotion in your neighborhood.

Dorin also received upfront money from MV Realty for signing a landlord benefits agreement, but said he didn’t understand the terms. Dorin learned he was being sued by MV Realty when a Channel 2 Action News producer called to ask about the lawsuit. He learned there was a lien on his Cobb County home days before the sale was scheduled to close.

“If you had realized what you were signing, would you have signed a 40-year record contract?” Gray asked.

“No, I wouldn’t have,” Dorin said. “The gentleman said if I chose to opt out, I would just go ahead and give him the $817 and we would go on our merry way.”

Instead, Dorin paid MV Realty over $9,000 for breaching its contract.

According to the Clerk of the Superior Court of Georgia, there are 3,321 MV Realty homeowner benefit agreements in 104 Georgia counties. About 2,000 of them were here in metro Atlanta.

Atlanta legal aid attorney Dina Franch told Gray she used a magnifying glass to read MV Realty contracts because the type was so small.

“It’s really unconscionable and it’s a very lopsided contract by a sophisticated company against unsophisticated owners,” Franch said.

Atlanta Legal Aid began researching MV Realty after being contacted by Julia Henry.

With the help of a Georgia State University researcher and law students, they mapped homes with MV contracts and found that 71% were in majority-black neighborhoods.

MV Realty declined our request for an on-camera interview, but in response to written questions said Channel 2 Action News“The company has gone to great lengths to disclose and re-disclose these key terms of the agreement, so that there is no confusion among our customers.”

“Does it seem like the business model is an intentional confusion here?” Gray asked Franch.

“Certainly in my client’s case,” Franch said.

A former employee worries

MV Realty also maintains that they only call homeowners who contact them. They said, “We don’t do cold calls. We only contact prospects who have opted in to receive information from us.

But a former MV Realty employee, who asked not to be identified, said his job was to cold call landlords. This whistleblower said: “It was a cold call to these people, and they were unsuspecting.”

This employee said he left MV Realty because he was concerned about company ethics. “I felt like I was taking advantage of people. It’s horrible,” they said. “I didn’t want to make any more calls.”

MV Realty internal training materials obtained by Channel 2 Action News support this employee’s claims.

A slideshow presentation for new recruits reads: “At some point these homeowners went online and filled out a form requesting some form of financial assistance – loans, refinance, mortgage, etc. MV purchased these tracks from various sources.

The training materials even contain different scripts for telemarketers to use, depending on the source of the prospect.

Legal questions about the contract

Lawyer Dina Franch wonders if the Owner benefits program is even legal in the first place.

When MV Realty sued Henry for allegedly breaching his contract, Franch argued that the company violated Federal Trade Commission laws. She also argued in Henry’s case that Georgia law allows real estate brokers to tie commercial properties to listing agreements, but does not specify whether this is allowed in residential sales.

“So in your mind there is a question is is it even legal under Georgian law?” Gray asked.

“There’s a question in my mind, yes,” Franch said.

Sarah Mancini of the National Consumer Law Center said MV Realty’s program could be considered a loan, secured by a lien on the home.

“It raises a lot of concerns about legality,” Mancini said. “And if it is a lending transaction, while many facts suggest it really is a lending, if so, they have violated the Truth in Lending Act .

The MV Realty website has been updated in recent weeks to include clear information about the Homeowner Benefits Program at the top of the page. The site now says the Owner Benefits Agreement is “not a loan,” and is not a lien on the property, but “file a memorandum…to notify the public of the obligations of the owner…”.

Channel 2 Action News partnered with seven other Cox Media Group sister stations and spoke to landlords across the country who signed MV Realty contracts and said they didn’t understand the terms of the deal until that it is too late to withdraw.

North Carolina and Florida attorneys general are investigating MV Realty.

Georgia Attorney General Chris Carr’s office said by email that it does not comment on open investigations, so it is also reviewing the company.

Via email, MV Realty said, “MV Realty performs extensive legal analysis in each state in which we operate. Our agreement complies with all state laws, including those regarding real estate contracts. »

Henry told Gray his warning to homeowners who receive a call from MV Realty: “I ask everyone you know MV Realty? Well, don’t get attached to them. They are mean people.

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