Bulletin: SLS2024011

Dear Associates:

We have previously written about MV Realty PBC, LLC and its “Homeowner Benefit Program” in which MV Realty provides an up-front cash payment to a homeowner in return for a future exclusive right to act as the listing agent when the owner sells their home.

We have also previously advised that MV Realty Holdings, LLC filed Chapter 11 Bankruptcy on 9/22/23 in the Southern District of Florida, Case Number 23-17591-EPK. The court ordered the joint administration with other MV subsidiary entity cases into MV Realty PBC, LLC, Case Number 23-17590-EPK, also in the Southern District of Florida.

This bulletin advises that the MV Realty PBC, LLC bankruptcy case, and all jointly administered MV Realty affiliate bankruptcy cases, were voluntarily dismissed without prejudice on May 24, 2024. Click here to read the Order of Dismissal.

A. In light of the bankruptcy dismissals, this bulletin supplements SLS2023014, and confirms and reinstates the Underwriting Guidance contained in SLS2022007 as follows:

If your title search discloses the recording of a Memorandum or Notice relating to an exclusive Agreement to List, or a Mortgage or Deed of Trust securing performance of a Homeowner Benefit Agreement (“HBA”) or similar type of arrangement, the recorded document must be identified in your Title Commitment in Schedule B, Part 1 Requirements (Schedule C in Texas), as a matter requiring the recording of a full release or discharge. This applies to both purchase and refinance transactions.

If the document on record is a Memorandum of Agreement or Notice of Agreement, we require a recordable release of the Memorandum, or the Agreement signed by both the homeowner and the MV Realty entity or other real estate company named in the agreement. If the current owner is not the original party who entered into the agreement with the real estate brokerage company, please contact your Stewart Title Guaranty Company underwriter for further guidance.

If the document on record is a Mortgage or Deed of Trust, we require a recordable release or discharge by the MV Realty entity listed as the mortgagee or holder of the Deed of Trust.

Additional documentation evidencing the authority of the person executing the release documents on behalf of the MV Realty entity may be required depending on the specific state law requirements where the property is located. Any questions relative to the validity of the authority of the signatory should be directed to your Stewart Title Guaranty Company underwriter in the state where the property is located.

Please continue to follow up regarding the required release instrument after the closing. If a release cannot be obtained, or if you have reason to believe that the property owner may have entered into this type of agreement, but your title search does not reveal a recorded Memorandum or Mortgage/Deed of Trust, please contact your Stewart Title Guaranty Company underwriter for further guidance.

B. In response to MV Realty's business practices, various state legislatures have enacted laws affecting the enforceability of HBAs and similar agreements. In addition, injunctions have been entered against the enforcement of such agreements based upon court actions brought in various states. Please contact your Stewart Title Guaranty Company underwriter in the state where the property is located if you intend to rely on such newly enacted laws or legal actions in addressing any discovered HBAs or similar agreements.

If you have questions about a transaction involving a closed bank or a bridge bank, or other issues not addressed by this bulletin, please contact a Stewart Title Guaranty Company underwriter.

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