Attorney General Phil Weiser announced that the Colorado Department of Law reached a settlement with real estate company HomeOptions, resolving allegations that the company locked homeowners into onerous agreements that violated state consumer protection laws, often containing decades-long terms and leaving future homeowners on the hook.
Under the terms of the settlement, the company will release all 171 homeowners with existing contracts from their agreements and will no longer have any remaining claims on any property owned by Colorado consumers.
“It’s predatory for a company to offer a paltry amount of money to homeowners in exchange for binding themselves and their heirs to a real estate transaction that might be many decades away,” said Weiser. “This settlement provides relief for those who were locked into the unfair contracts. I will continue to fight for Coloradans and take action against those irresponsible companies who engage in predatory and unconscionable behavior.”
In 2021, HomeOptions started marketing these agreements to Colorado consumers, promising a small cash payment—typically $900 to $1,100—in exchange for exclusive rights to sell the home in the future. The agreements contained provisions that virtually guaranteed the company would receive thousands of dollars from the homeowner, either from commissions on the sale of the home or fees assessed for terminating the contract. These terms were even binding on the homeowner’s heirs. HomeOptions also included provisions in contracts that would require consumers to pay large termination fees to remove “memoranda of understanding” that the company placed on consumers’ homes, which severely limited homeowners’ future real estate brokerage options.
The case was referred to the attorney general’s office by the Colorado Division of Real Estate.
“The Real Estate Commission is pleased that the resolution of the HomeOptions case will result in the affected consumers being released from these agreements without having to pay early termination fees,” said Marcia Waters, Division of Real Estate Director.
In addition to terminating and voiding any existing contracts, if the company becomes aware of any of the affected homeowners putting their house on the market, HomeOptions agrees to prioritize terminating any existing memorandum of understanding, so the illegal contract does not impede the sale of the home.
Coloradans who believe a company is engaging in behavior that violates consumer protection laws are encouraged to file a complaint with the attorney general at StopFraudColorado.gov.
Original source can be found here.