On October 31, the New Jersey Office of the Attorney General (OAG) announced a $2.8 million settlement with a real estate company. The settlement resolved claims that the company and its principals violated the Garden State’s Consumer Fraud Act, general advertising regulations, and telemarketing do-not-call regulations by purportedly targeting financially struggling homeowners during the COVID-19 pandemic with “Homeowner Benefit Agreements” (HBAs). The company allegedly offered small upfront payments, promotion fees between $300 and $5,000, in exchange for exclusive future listing rights, while failing to disclose that the agreements imposed 40-year terms, liens on homes, and substantial early termination fees ranging from $575 to $42,000 — at least 10 times the value of the promotion fee.
Under the consent judgment, the company must stop entering or enforcing HBAs in the state, file terminations for all related property liens, and pay approximately $1.34 million in restitution to homeowners who paid early termination fees, as well as a $1.5 million civil penalty. The settlement prohibited the company to collect early termination fees, assign HBAs to third parties, or represent that it holds enforceable property interests or liens under HBAs.
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