ORLANDO, Fla. — A Florida real estate company Action 9 first exposed for its contracts with homeowners has now filed for bankruptcy. WFTV first reported on MV Realty two years ago because of its real estate listing agreements that lock consumers in for 40 years in exchange for a small payment upfront.
When this all started to come to light, Carla Turman told Action 9 the $1,300 offer from MV Realty’s Homeowner Benefit Program was enticing.
Turman said, “They can have my cash in my account within a couple of days.”
She admitted to Action 9 she didn’t read the contract before signing. Turman and others across the country claim they had no idea the payment they received gave MV Realty the exclusive right to serve as their real estate agent for the next four decades.
The company started enforcing those contracts by placing liens on consumers’ homes.
According to Turman, “They said I had to use them.”
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Since Action 9 first exposed this practice in 2021, Florida Attorney General Ashley Moody has filed suit against MV Realty calling its program a “complex and deceptive scheme.” Moody is now asking a judge to freeze some of the company’s assets.
Attorneys General in other states have also taken action against MV Realty. Several states, including Florida, have also passed legislation banning these types of contracts.
Now, MV Realty has filed for Chapter-11 bankruptcy in Florida and 32 other states.
Orlando bankruptcy attorney Scott Shuker said, “Chapter 11 should be a reorganization. You’re supposed to be operating, although sometimes Chapter 11s turn into liquidations such as Toys R Us or Bed Bath and Beyond.”
Shuker says this filing immediately stops all lawsuits and brings all litigation into one forum. The bankruptcy court will hash out who’s owed money, who will be sued and how much creditors will get.
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He said this bankruptcy could actually help consumers. For one, a committee usually made up of three to five people, referred to as a creditors committee, could be formed to represent the consumers. That would keep each individual from having to hire their own attorney. It’s also possible one of the first things the bankruptcy court could do is remove the homeowner liens.
Shuker told Action 9, “Usually you hear bankruptcy and you think, ‘Now we’re gonna get victimized twice.’ But in getting the ability to get the liens off quickly and from a central forum is important.”
Several liens MV Realty filed in Orange County and other parts of Florida are still pending.
In an earlier statement, MV Realty said it was confident that any inquiry will confirm the company has operated in full compliance with the law. It did not respond to our request for comment about the bankruptcy.
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