On April 16, Pennsylvania’s Office of the Attorney General (OAG) announced a proposed settlement, which was filed in the Philadelphia Court of Common Pleas and is pending court approval, resolving litigation against a real estate company and one of its officers over allegations that the company misled consumers about the terms of its “Homeowner Benefit Agreement” and placed mortgage liens on homes without homeowners’ knowledge in violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law. The OAG filed the underlying lawsuit in 2022, alleging the company offered homeowners a one-time upfront cash payment in exchange for exclusive rights to list their home for sale over a 40-year period, with consumers who attempted to exit the agreement required to pay an early termination fee equivalent to 3 percent of the home’s value. The OAG alleged that many homeowners were unaware the agreement would result in a mortgage lien on their property.

Under the proposed settlement, the company agreed to terminate more than 1,300 mortgages recorded on properties across the state and cancel all existing agreements with Pennsylvania homeowners. Within 30 days of the effective date, the company must submit mortgage satisfactions for all mortgages recorded in the state, at its own expense and without requiring any action by affected homeowners. The company must also send letters to all affected homeowners within 45 days advising them of the contract cancellations. The company is required to pay $645,595 in consumer restitution and $7,000 in litigation costs, with payments to be completed in installments by March 1, 2027. Additionally, the settlement includes suspended civil penalties of $1,663,000 against the company and $500,000 against the individual officer, which will become due if they fail to comply with the settlement’s terms. The settlement also permanently prohibits the company and its officers from engaging in any business involving residential real estate brokerage in Pennsylvania.