Right-to-list agreements are popping up nationwide, and vulnerable homeowners are being targeted. A real estate company approaches these owners with the offer of a cash amount upfront in exchange for an agreement to list their home when the owner decides to sell. Companies are then recording a 40-year covenant on the property that obligates the owner to either use their company to list or pay a hefty fee. These agreements have caused issues in closings, in refinance transactions and can sometimes be tough to spot in a title search. The American Land Title Association and much of the industry only became aware of this practice earlier this year, but they’ve put together a special group to draft model legislation to approach this issue state by state.
Our guest in this episode is a Maryland-based real estate attorney, Nancy Gusman. She’s part of this task force and has worked in her state to find ways to prohibit this practice. It’s a painstaking process, but ultimately one that she believes will protect vulnerable consumers.
Resources:
- Real Estate Firm Placing 40-Year Right-to-List Contracts on Properties (ALTA, July 2022)
- State Regulators Examining Brokerage’s Homeowner Benefit Agreements (ALTA, Nov. 2022)
- Homeowner benefit agreements’ in spotlight amid MV Realty probe (INMAN, Nov. 2022)
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Guest: Nancy Gusman, Esq., Gusman Legal
Host: Lindsey Gordon of PropLogix
