Right to List Agreements

Since 2018 real estate brokerage firms have been offering homeowners as little as $300 in exchange for signing decades-long listing agreements. These right to list agreements contractually obligate a seller, in exchange for an upfront cash payment, to sign over the right to list their home, placing unreasonable restraints on a seller's future ability to sell or refinance property due to unwarranted transactional costs -- a system contrary to our industry's continued support for certainty of landownership.

News

Bill Targeting Predatory Right to List Agreements Filed in House - HB 4126

DATELINE 03/16/23
Rep. John Raney filed HB 4126, which targets predatory Right to List agreements.

N.C. Becomes Fifth State to Sue Brokerage Firm Over Right-to-list Agreements

ALTA Resource 03/23/23
North Carolina became the fifth state to file a lawsuit against real estate firm MV Realty alleging that the company violated laws prohibiting unfair and deceptive practices by tricking homeowners into signing 40-year real estate agreements. ALTA has worked with national stakeholders to design model legislation to make these types of unfair agreements unenforceable, prevent the recording of the agreements in land records and provide consumers with options for seeking damages.

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Update on NTRAPS Bill (Right-to-List Agreements)

DATELINE 03/31/23
House Bill 4126, which would codify right-to-list agreements (or Non-Title Recording Agreements for Personal Services (NTRAPS)), was heard in committee Wednesday.

Some background on this issue: Since 2018 real estate brokerage firms have been offering homeowners as little as $300 in exchange for signing decades-long listing agreements. These NTRAPS agreements are filed in property records, which can produce unreasonable restraints on future ability to sell or refinance property due to unwarranted transactional costs -- a system contrary to our industry's continued support for certainty of landownership, and the reason why ALTA and TLTA have been so vocal on this bill.

The agreements that would be codified if HB 4126 was passed are harmful to consumers in many ways, including the following:
  • Creation of unreasonably long contractual obligations
  • Cost of cancellation or non-compliance 5, 10 or 15 years later is 3% of property value
  • Penalties significantly greater than upfront payment
  • Binding of future successors (who were not a part of the original agreement)
House Bill 4126 is outlier legislation that runs counter to bills in over 15 other states seeking to ban or limit the use of long-term listing agreements.

Former TLTA President Dawn Moore testified at yesterday's hearing on behalf of our industry and Texas consumers. Also providing testimony and national perspective on this issue was Elizabeth Blosser, ALTA's Vice President of Government Affairs. We appreciate our advocates who travelled to Austin to provide testimony about our strong concerns with this bill.