Reaction to our story on a class action lawsuit where a Multiple Listing Service (First Multiple Listing Services in Georgia) allegedly paid kickbacks (a RESPA violation) to agents and brokers has been strong. A nationally recognized real estate attorney shares his insights about the settlement.
Real estate agents should be keenly aware of the business practices their own brokers subject them to because they could be unknowingly exposed to civil liability like in the recent MLS RESPA case. Agents should question their brokers about business practices they have concerns about and if they feel like their broker doesn’t care or doesn’t want to buck the system, then they should find another company to work for.
I have a distinct feeling that we will see the DOJ making an entry into Atlanta on this FMLS issue and unfortunately for many real estate agents the conduct of their broker/FMLS will taint their sterling reputation and wind up costing them more money in the end on E&O insurance and other fees to offset the loses. This will cost the entire real estate industry in that region.
Most of these agents & brokers are members of NAR and this is just another example of how something that could have been avoided wasn’t because no one questioned the legality of the practice even though NAR explicitly stated this type of conduct violates the anti-trust rules.
This information should serve as a great educational piece for real estate agents in that they (or their brokers) should have competent legal counsel vet these types of programs before they sign on the dotted line with any vendor.
Despite a motion to dismiss the case, the US District Court in Georgia has decided to proceed.
The implications for all brokers and agents should be clear. As the industry tightens up regulations and restrictions and the enforcement of the Consumer Financial Protection Bureau (CFPB) begins to pick up even more steam after the naming of a director, well-hidden and convoluted scams like this remind us to maintain only the highest professional standards.