Violating RESPA has been the primary concern of brokerage companies that owned affiliated services, such as Mortgage or Title Companies."? Much time and effort is spent to stay clear of incentives or inducements that may be construed to be illegal under the RESPA requirements."? A unique lawsuit has been filed by some powerful parties against a powerful party."? Fireworks are sure to ensue.

As reported on www.RealLawCentral.com, (and I have not seen mentioned anywhere else)' was this bombshell I will paraphrase:"? On Feb. 20, a class action lawsuit was filed in Minnesota against Burnet Realty Inc.,"?DBA Coldwell Banker Burnet, the one with over 3,000 agents in Minnesota and an NRT Company."? In the suit the plaintiffs allege "deceptive and misleading conduct steering consumers, to an affiliated title company, that had some of the most expensive insurance rates and settlement service fees in the marketplace.

Their claim further states that because the agents received their checks at the closing(significantly faster)"?as opposed to after, this was an attempt to influence the agents. It also alleges the Affiliated Business Disclosure form does not satisfy the greater obligations of fiduciary responsibility.

What's the big deal? No RESPA violations are being alleged. The complaint alleges a breach of fiduciary duty under Minnesota state statutes and common law. They are also alleging a violation of the Minnesota Consumer Fraud Act. The consumer has been harmed unfairly is the short version. This as we know from past law suits can lead to"?gigantic sums of money.

The lead attorneys are high powered and they are joined by an attorney from the "?University of Minnesota Law School's Consumer Protection Clinic."? The law school was reportedly interested in getting involved in the case because they believe it could set some sort of precedent.

Every broker with ancillary business relationships should be watching this suit."? This suit could be precedent setting litigation that taken to extremes could stop agents from referring any business to any provider for fear they would not be the lowest cost or in some way may be "harmful to the consumer"

The implications could be enormous."? Can you imagine a real estate agent or company being sued because the"?service provider"?they have recommended is more expensive."? But what if the service is superior or provides other benefits"?? Who decides"?? Many real estate companies are only profitable today because of their ancillary services"?? What could happen?

Let's watch this one.

Please let us know your thoughts, concerns, and suggestions.

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