States Crack Down on Predatory Real Estate Deals

33 states have adopted AARP-backed laws banning quick-cash listing agreements

Miriam Cross and Natalie Missakian,

Updated February 11, 2026

AARP

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En español

Published May 14, 2024

/ Updated February 11, 2026

Since 2023, more than 30 states have passed AARP-backed laws to protect consumers from unfair real estate agreements in which brokers trade a small, upfront cash payment for the future right to sell a person’s home. Also known as homeowner benefit agreements, these contracts have been marketed to cash-strapped homeowners — particularly older adults — and can be binding for up to 40 years.

That means if the homeowner or their heirs later sell the property using a different listing agent, they could be forced to pay a penalty, which is typically up to 3 percent of the home price. Often, the penalty can be far greater than the original cash payout.

New York is the latest state to enact laws to protect homeowners from these agreements; Gov. Kathy Hochul signed the legislation on Dec. 12.

“For many older New Yorkers, their homes are their biggest asset and greatest financial investment,” said Beth Finkel, AARP New York state director, in a press release. “New York homeowners will have more control and the financial security they need to age in their own homes.”

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Thirty-three state legislatures have passed laws prohibiting these agreements: New York, New Hampshire and Rhode Island in 2025; Minnesota, Illinois, Louisiana, South Carolina, Connecticut, Hawaii, Oklahoma, Indiana, West Virginia, Arizona, Kentucky, Oregon, Virginia and Nebraska in 2024; and Utah, Maryland, North Dakota, Idaho, Georgia, Tennessee, Colorado, Alabama, Florida, Iowa, Maine, Nevada, Ohio, Washington state, North Carolina and California in 2023.

A win for homeowners

Homeowner benefit agreements are being challenged by attorneys general in 16 states. Homeowners entering into these agreements have complained they were unaware the contracts would be included in their property records and could complicate future property transactions and sales.

The contracts also carry over to relatives who inherit the property after the homeowner dies, meaning that under this type of agreement, those relatives would be forced to use a specific listing agent for a sale or face financial penalties.

Often, homeowners who have signed these agreements say they were not given time to review the paperwork or did not understand the terms before signing.

In North Carolina, for example, a court recently barred real estate brokerage MV Realty from enforcing provisions of its homeowner benefit agreements following a lawsuit filed by the state attorney general. The provisions included locking homeowners into exclusive listing contracts for 40 years (with the claim that the contract also applied to heirs) and imposing commissions of 3 to 6 percent of the home’s value. More than 2,000 North Carolina residents were affected.

“Good public policy should support the certainty of home ownership by ensuring there are no unreasonable restraints on future ability to sell or refinance property,” said Michael Olender, state director of AARP North Carolina, in a press release.

AARP worked with the American Land Title Association (ALTA) to create model legislation for states to follow, with a goal of passing a law in all 50 states.

“Every time a state legislature makes clear that these types of unfair agreements are not welcome in their states, it is absolutely a win for consumer protection, and it’s a win for people’s property rights,” Elizabeth Blosser, ALTA’s vice president for government affairs, told AARP.

Protecting financial assets

Though the details vary by state, the laws generally limit the duration of these agreements and prevent them from being documented in the property records or being enforced through liens. Some of the laws allow previous agreements to be removed from property records and let the homeowners recover damages.

Blosser said ALTA’s members, who facilitate real estate closings around the country, have encountered countless consumers who have suffered financial losses because of these agreements, whether it’s a penalty for using a different real estate agent or legal fees from fighting to have an agreement removed from their deed.

“There shouldn’t be any unreasonable restraints on someone’s ability to either transfer or finance their property,” Blosser said.

Samar Jha, an AARP government affairs director who handles housing issues, noted that around the country, these laws have passed with overwhelming bipartisan support.

“It’s clearly an issue that concerns every homeowner,” he said.

AARP has long worked to ensure older adults have the financial stability to age in their own homes and communities.

Jha said AARP hopes to push the law over the finish line in other states. Even if companies peddling these agreements aren’t operating in a particular state now, Jha added, “that doesn’t mean it cannot happen. It’s still a practice that needs to be prohibited.”

Additionally, Jha says, “we are seeing more and more legal actions being taken against entities who are trying to take advantage of homeowners,” with the North Carolina ruling as a recent example.

To hear from a homeowner who says he was misled into signing one of these agreements, listen to our podcast The Perfect Scam. 

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