Legislation on its way to the governor’s desk would crack down on a robocall scam where homeowners receive a small cash offer in exchange for signing a decades-long contract that could cost them thousands.

According to the Indiana Office of the Attorney General’s Consumer Protection Division, more than 300 Hoosiers entered into these contracts known as Homeowner Benefit Agreements. Robocallers generally offer to give homeowners between $500-$700 in exchange for signing a long-term contract, which gives the company exclusive rights to sell the home, if and when the homeowner decides to, or provide maintenance. A homeowner could only break the contract if they pay a termination fee, which could be 3% of their home’s value as estimated by the company.

Homeowner Benefit Agreements can be binding for up to 40 years, even if the property changes ownership, and the company can place a lien on the property’s title, which complicates a homeowner’s ability to refinance, access home equity and transfer ownership. The contract is often binding to the property, so it remains in place even after the owner’s death.

To help crack down on these unfair practices, this legislation would make real estate service agreements unenforceable if it’s a contract for maintenance, purchase or sale of the property that is not expected to be completed within a year or is binding on future owners and creates liens on the property. This bill would also allow individuals adversely affected by these agreements to seek damages against the service provider. Exceptions would be made for home warranties covering systems such as plumbing, heating and cooling, and electrical wiring.

At least 16 other states enacted similar laws restricting HBAs and the Federal Communications Commission took action last year against these types of robocalls.

Visit iga.in.gov to learn more about House Enrolled Act 1222.