Oklahoma Governor Signs Legislation to Prevent Predatory Real Estate Agreements
AARP Oklahoma applauds Gov. Kevin Stitt for signing AARP-backed legislation protecting consumers from unfair real estate agreements. These agreements involve real estate brokers trading a small upfront cash payment for the future right to sell a person’s home.
House Bill 3318, by Rep. Steve Bashore (R-Miami) and Sen. Bill Coleman (R-Ponca City), proactively prevents and prohibits unscrupulous brokers from misleading homeowners into signing decades-long agreements that give the real estate brokers the exclusive right to sell the homes. The bill prohibits real estate service agreements longer than one year, makes these agreements non-recordable in the deed or property record, and blocks liens or claims against a property by a party that is not the owner.
“For many Oklahomans, their home is their most important asset and the basis of their financial stability,” said AARP Oklahoma Advocacy Director Joy McGill. “AARP applauds Gov. Stitt and the Oklahoma Legislature for proactively addressing this predatory business model that targets older adults and financially insecure homeowners."
Real estate service agreements in other states have left homeowners bound to exclusive long-term selling arrangements for themselves and future property owners in exchange for cash up front, ranging from $300-$5,000, said McGill. These predatory practices require current homeowners and any future owners to sell with the real estate agency listed in the agreement and charge a steep percentage-of-purchase-price fee to break the agreement during the long-term designated period.
If a homeowner or the homeowner’s heir sells the property using a different listing agent — or if the property is foreclosed upon — the company must be paid a percentage of the home’s sale price as a penalty.
McGill said these agreements often target low-income individuals or those on fixed incomes, such as senior citizens, who are more inclined to accept unfavorable terms in exchange for immediate financial assistance or other benefits.
These deceptive tactics have prompted strong bipartisan support for similar action. To date, 23 states, including Alabama, California, Colorado, Florida, Georgia, Idaho, Iowa, Maine, Maryland, Nevada, North Carolina, North Dakota, Ohio, Tennessee, Utah, Washington, Oregon, Indiana, Virginia, West Virginia, Kentucky, Arizona and Nebraska have enacted legislation protecting homeowners.
The Oklahoma Realtors Association and Oklahoma Land Title Association also joined AARP Oklahoma in support of HB 3318.
