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Non-Titled Recorded Agreements for Personal Services, known as
NTRAPS, are contracts between a service provider, such as a real
estate firm, and a homeowner in which the homeowner is offered a
small amount of money in exchange for signing an agreement for
future services.
“What we saw happening in the marketplace was real estate
brokerage firms were going to homeowners and paying them as
little as $300 dollars to sign a listing agreement that could
last for as long as 40 years,” said Elizabeth Blosser, Vice
President of Government Affairs with the American Land Title
Association.
If the homeowner used another listing agent, they could be
forced to pay a penalty, sometimes up to 3% of the purchase
price.
“The financial impact of these predatory contracts can then fall
onto family members who inherit the property and are put through
obstacles during an already challenging time” State Sen. Ann
Gillespie, D-Arlington Heights, the sponsor of the measure.
Illinois is one of 30 states that have passed legislation making
NTRAPS unenforceable. If signed into law, the measure would
prohibit businesses from entering into these real estate
contracts. It would also protect property owners from financial
loss in the event a contract is included within their property
record.
“What we’ve found as we promoted this legislation the last two
years is this is definitely not a partisan issue, it is a
consumer protection issue,” said Blosser.
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