Enacted on June 13, 2025, a new law  (054) prohibits the use and recording of service agreements that would be unfair to existing or future owners of residential property with 1 – 4 dwelling units that is used mainly for “personal, family or household purposes.” The law, which took effect upon passage, prohibits agreements for the maintenance of, purchase or sale of residential real estate that can’t be completed within a year, with some exemptions. 

An example of such a practice is a real estate company that paid property owners in cash in exchange for signing a 40-year contract to list with that real estate company or pay a sizeable fee if the owner ever decides to sell the property. The agreement was recorded against the property and created a lien against the property.  A number of state Attorneys General across the country pursued this company.

This new law assists these property owners by providing a way to obtain a court order to make the unfair agreement unenforceable and to recover damages, costs, and attorney’s fees. 

REALTORS®: For more information, contact the RIAR Legal Department at [email protected].