Another state legislature has
Virginia's is the most recent to pass NTRAPs legislation, joining 20 others that have passed laws, some of which await governors' signatures, according to the American Land Title Association. Virginia Gov. Glenn Youngkin is expected to sign its legislation.
The momentum in efforts to pass laws that discourage the agreements, in which a provider pays for an exclusive right to sell a property in the future, is significant to the industry in part because the pacts can impede or complicate mortgages.
"The practice preys upon homeowners, offering small cash gifts in exchange for decades-long contracts," said Elizabeth Blosser, vice president, government affairs at ALTA.
The new Virginia law makes NTRAPs unenforceable by law. It also disallows and sets penalties for recording them in property records, and creates channels for their removal and payment of related damages if they are.
Sixteen states have similar legislation in place and signed by their respective governors: Alabama, California, Colorado, Florida, Georgia, Idaho, Iowa, Maryland, Maine, Nevada, North Carolina, North Dakota, Ohio, Tennessee, Utah, and Washington.
The legislatures of three other states have passed laws and are still waiting for their respective governors to sign off on it: Indiana, Minnesota, and Oregon.
In addition, attorneys general of nine states have filed actions against an alleged purveyor of the contracts, MV Realty: California, Florida, Georgia, Indiana, Massachusetts, New Jersey, Ohio, Pennsylvania, and North Carolina.
MV Realty had not responded to a request for comment at the time of this writing. The company filed for Chapter 11 bankruptcy last year, according to the Department of Justice, which has been advocating for the rights of contract holders in that context.
