Since making headlines for the first time roughly 18 months ago, right-to-list agreements — also known as Non-Title Recorded Agreements for Personal Service (NTRAPS) — have been banned in 30 states, according to an announcement from the American Land Title Association (ALTA).
The title industry trade group, along with AARP, have spearheaded the effort to outlaw the agreements.
Most notably marketed by MV Realty under the moniker of its Homeowner Benefit Program, homeowners who sign a right-to-list agreement receive anywhere from $300 to $5,000. In exchange, they give the firm the exclusive right to list their home for a 3% listing broker commission if they choose to sell the property any time in the next 40 years. If the homeowner breaks the agreement or decides to terminate the agreement early, the homeowner must pay 6% of the appraised value of the home.
“We call these unfair service agreements for a reason,” Elizabeth Blosser, the vice president of government affairs at ALTA, told HousingWire in May 2023. “People are getting paid as little as $300 to sign a listing agreement for as long as 40 years and it is being placed in the land record with at least 3% of their property value on the line if they don’t comply.”
According to ALTA, right-to-list agreements get recorded on property records as liens, covenants, encumbrances or security interests in exchange for money, increasing the cost and complexity of transferring or financing properties in the future.
In March 2023, Utah became the first state to ban these types of agreements. Since then, 29 other states have followed suit. These include Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Indiana, Kentucky, Louisiana, Maine, Maryland, Minnesota, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Virginia, Washington and West Virginia.
In many of these states, laws were modeled after draft legislation put together by ALTA. In a press release, ALTA said the laws are designed to help “protect homeowners from predatory practice of filing of unfair real estate fee agreements in property record.”
These laws make right-to-list agreements unenforceable by law. They also restrict and prohibit the recording of right-to-list agreements in property records, and they provide for the removal of right-to-list agreements from property records while allowing for the recovery of damages.
“Enactment of this important consumer protection legislation in 30 states is a monumental win for safeguarding people’s property rights,” Blosser said in a statement. “We applaud the bipartisan efforts of lawmakers championing homeownership by making clear these types of unfair agreements are unacceptable in their states.
“Hopefully, the swift action taken by lawmakers, along with state attorneys general, will be a strong deterrent to those looking to perpetuate similar schemes that strip hard-earned equity from people’s homes.”
Right-to-list agreements first came under fire in late November 2022, when the Florida attorney general’s office sued Florida-based MV Realty for what it called a “complex and deceptive scheme.” Over the following months, several other attorneys general — including those in Massachusetts and Pennsylvania — sued MV Realty over similar claims.
In late February 2023, MV Realty announced that it was pausing the signing of new right-to-list agreements.
“MV Realty has voluntarily temporarily suspended entering into new customers contracts as we work to address the concerns raised by regulators and legislators,” a company spokesperson wrote in an email to HousingWire that month.
In September 2023, MV Realty filed for Chapter 11 bankruptcy in 33 states. The firm had more than 500 real estate agents.
