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News & Information: ORRA BrokerWise

Brokerages may be safe from flat-fee lawsuits

Tuesday, May 29, 2012  
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The U.S. Supreme Court may have slammed the door on consumer lawsuits alleging that the flat fees brokerages charged clients in addition to percentage-based commissions violate provisions of the Real Estate Settlement Procedures Act (RESPA).

In a case involving mortgage lending but which has direct application to real estate brokerage, the Supreme Court of the United States has determined that a violation of §2607(b) of the Real Estate Settlement Procedures Act only occurs when a split of a settlement-service fee paid by a consumer to a real estate settlement-service provider is split with a third party.

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