This session, I authored a new law to crack down on a robocall scam where homeowners receive a small cash offer in exchange for signing a decades-long contract.
The Indiana Office of the Attorney General’s Consumer Protection Division received notices of these robocalls coming from MV Realty and affiliates. These companies offered Hoosier homeowners between $500-$700 to sign what they called a Homeowner Benefit Agreement.
This contract required homeowners to use that company as their broker if they decided to sell their house later. It also extended for 40 years and is filed in the property’s chain of title in their county recorder’s office. This can make it difficult for the homeowner to take steps like refinancing their mortgage or seeking a home equity loan. The lien is also binding to the property and remains in place even if the owner dies or attempts to transfer ownership.
This scam mostly targets elderly Hoosier homeowners and those struggling financially who may need some quick cash. Most who signed these Homeowner Benefit Agreements weren’t aware of many of its provisions, which led to lost income and other unnecessary problems. My legislation protects these homeowners by ending this deceptive practice in Indiana.
House Enrolled Act 1222 makes these HBAs unenforceable if it’s a contract for maintenance, purchase or sale of the property that is not expected to be completed within a year or is binding on future owners and creates liens on the property. Under this new law, individuals adversely affected by these agreements can get a court declaration making them null and void. Exceptions are made for home warranties covering systems such as plumbing, heating and cooling and electrical wiring.
The Indiana Attorney General’s Office reported that more than 300 of these agreements have been entered into in Indiana. Through a survey of these homeowners, they learned almost 80% of them weren’t informed of the contract’s 40-year duration, or they didn’t understand the contract was binding on future owners or that it’d be filed on the title in the county recorder’s office. Many also said they weren’t given time to review the HBA or given copies ahead of time before signing.
Indiana now joins 16 other states with a ban on HBAs.
If you or someone you know have fallen victim to a scam, you can file a complaint with the Consumer Protection Division, by visiting in.gov/attorneygeneral and clicking on “consumer protection.” Scams can also be reported by calling 800-382-5516.
State Rep. Craig Haggard, R-Mooresville, represents House District 57, which includes portions of Hendricks, Johnson and Morgan counties. Johnson County representatives share in writing a monthly column for the Daily Journal. Send comments to [email protected].
