NH subcommittee debates banning "future right to listing" agreements that can create property liens

A New Hampshire legislative subcommittee on Commerce and Consumer Affairs spent extended time discussing proposed changes to state law aimed at preventing companies from using long-term listing or “service” agreements that can be recorded as liens against residential property.

The discussion focused on two related goals: (1) make these agreements unenforceable or illegal when they effectively grant a future right to list a property and (2) prohibit recording a lien or other encumbrance based on such an agreement. Mike Padmore, director of advocacy for AARP New Hampshire, told the committee the group wants the statute to make clear these contracts are unenforceable and recommended using the term “future right to listing agreement.” Padmore said, "future right to listing agreement means a contract under which a person agrees to provide future right to listing services in relation to any residential real estate."

Padmore and other advocates proposed a two‑year rule in the draft: a characteristic of an unfair agreement would be that any part of the promised service is not performed within two years of the contract. Padmore said the two‑year limit reflects common practice — "we're finding that it's most common that a listing agreement would be no longer than 365 days" — and is intended to target 40‑year arrangements that "run with the land." He also circulated a mock‑up of legislative text and said Maine and roughly 30 other states have adopted related measures.

Bob Quinn, CEO of the New Hampshire Association of Realtors, told the panel that model laws in other states typically do two things: bar the signing of these agreements and bar recording a lien based on them. "They make the actual agreement illegal, the signing of the agreement, and then they also make it prohibited you from putting a lien on someone's property," Quinn said, describing that dual approach as the structure of bills such as SB 164 and similar statutes in other states.

Committee members pressed several technical issues. A recurring concern was the role of registrars of deeds: Kate Horgan of the New Hampshire Association of Counties urged that, if the statute limits recording, registrars should not become liable for simply performing their statutory duty to record instruments. Padmore said the draft could add an explicit exemption "that this does not apply to anyone working in their capacity at the registry of deeds office," insulating registrars when they record instruments presented to them.

Lawmakers also debated enforcement options. Several speakers noted the Consumer Protection Act (RSA 358‑A) provides a private cause of action and bureau enforcement for unfair or deceptive acts; the Consumer Protection Bureau representative said that if the statute declares the agreements an unfair act, the bureau and private litigants would have jurisdiction and could seek equitable relief to remove liens. Others on the panel said the conduct can feel criminal in nature and questioned whether consumer‑statute remedies are the best fit for clearing recorded liens.

The committee discussed alternatives to the two‑year gate in the AARP draft. Some members argued for an outright prohibition — "just make this activity illegal, period" — while others said a narrowly tailored definition focused on residential future‑right to list agreements plus a recording prohibition would avoid catching legitimate short listing agreements or business‑to‑business commercial arrangements.

Stakeholders told the panel that the companies offering these arrangements are often not local real‑estate licensees but out‑of‑state national operators; the draft cited MB Realty (identified in testimony as a national funding company) as an example from other states' litigation and enforcement records. Participants also referenced existing state work on discharging stale liens and mortgages as a possible model for a statutory removal process should a lien remain on title.

The subcommittee did not vote on a final draft. Members agreed to continue drafting and to circulate amendments; one clear near‑term change staff said they would propose was replacing the phrase "long‑term service agreement" with "future right to listing agreement," and to add registrar protections and a clearer ban on recording liens tied to these agreements. The item was scheduled to return to the next subcommittee meeting for further drafting.

Ending note: committee members and stakeholders said they wanted streamlined, clear statutory language that would be easy for consumers and practitioners to understand and that would not require litigation to enforce. The discussion left open the precise enforcement mechanism and the final definition that the committee will consider next.