ARTICLE
15 April 2025

California Attorney General Announces Settlement With Realty Company Over Deceptive Contract And Lien Practices

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Goodwin Procter LLP

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On April 4, 2025, the California Attorney General announced that it had reached a settlement with a California-based realty company concerning claims...
United States California Corporate/Commercial Law

On April 4, 2025, the California Attorney General announced that it had reached a settlement with a California-based realty company concerning claims that the company had violated California false advertising, unfair competition, and telemarketing laws and federal telemarketing and lending laws via allegedly luring vulnerable homeowners into a predatory contract scheme that caused homeowners to sign contracts with coercive terms and to unnecessarily pay large sums of money.

The California Attorney General's complaint alleged that the company would provide homeowners with an up front payment in exchange for an exclusivity contract to be the homeowners' exclusive listing agent for twenty years. After the homeowners were convinced to sign unlawful contracts, the company would deceptively record liens against the homeowners' homes, which then required homeowners to pay tens of thousands of dollars in illegal fees to remove those liens.

As a result of the agreed-upon settlement, the company agreed to pay over $400,000 in restitution to homeowners who previously paid the illegal fees, including to remove the deceptive liens, and to pay $170,000 in civil penalties. The company also agreed to terminate all liens that it recorded on California homeowners' homes and to void all contracts that it entered with California homeowners.

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