In filing a lawsuit on Wednesday in Franklin Circuit Court, Attorney General Jack Conway said a national mortgage company deliberately violated Kentucky law by not recording mortgages with county clerks.
Conway said MERSCORP Holdings, Inc. and its subsidiary Mortgage Electronic Registration Systems, Inc., chronically failed to file the mortgages when they were sold or transferred thereby avoiding a $12 clerks fee each time.
MERS has denied any wrongdoing (see statement below).
Conway said “MERS directly violated the law by creating this system that provides absolutely no public record of sales or transactions.” Read More.
A Missouri court has considered whether a broker could collect a commission from a commercial lease transaction when the parties had agreed to a lease but had not fixed the monthly base rent.
In 1998, DeBruce Grain, Inc. (“Tenant”) entered into a ten-year lease with Briarcliff Development Company (“Landlord”) for office space. The lease contained a renewal option, but the Tenant did not exercise the renewal option and instead hired the real estate brokerage firm Wally & Co. (“Brokerage”) to assist the Tenant in its search for office space. Read More.
A Connecticut court has considered whether a lawsuit involving a commission dispute between two REALTORS® should be stayed and sent to the local REALTOR® association for arbitration.
Sotheby’s International Realty (“Listing Broker”) served as a listing broker for a property located in Greenwich, Connecticut. The Listing Broker placed the property into the Greenwich Multiple Listing Service (“MLS”), offering a cooperative commission to other participants who produced a buyer for the property. Read More.
A Tennessee court has considered whether a prospective buyer could bring breach of contract allegations against the seller, the listing broker, and the eventual buyers of the property for allegedly failing to disclose that the transaction would require short sale approval. Read More (realtor.org login required).
A Michigan court has considered whether a listing broker had a duty to disclose to buyers that a property had a chemical contamination problem, when the property’s marketing materials represented that the pollution had been remediated.
Frank and Tonya Alfieri (“Buyers”) entered into an agreement to purchase a condominium built in an abandoned factory that had a history of trichloroethylene contamination (“Contamination”). During the building of the condos, the developer had installed a vapor barrier because of the Contamination but the property was never properly remediated. Newspaper articles and the development’s marketing materials suggested that the property was no longer contaminated. Read More.
The following list of considerations was developed to assist a broker in evaluating organizations and websites for display of the broker’s listings. Each broker should make an independent business decision where and under what terms to permit the display of the broker’s listings. Read More (realtor.org login required).
A Hawaii federal court has considered whether a real estate professional’s management of her client’s rental property purportedly “as a friend” subjected her to the legal duties that a property manager owes to his/her client.
Inmi Fegenbush (“Broker”) represented Richard and Sally Giomi as well as members of their family (collectively, the “Clients”) in various real estate transactions. Following some of these transactions, the Broker began assisting the Clients in the leasing of the properties. The Broker found tenants, collected the rent, arranged for maintenance of the properties, and made the mortgage payments for these properties. The parties did not enter into a formal property management agreement. Read More (realtor.org login required).
Brokers charging buyers or sellers administrative fees (sometimes called transaction fees or administrative brokerage commissions) to augment a percentage-based commission received good news from all nine justices of the United States Supreme Court. A rare, unanimous decision by the Court on May 24, 2012, in a case challenging loan fees (Freeman vs. Quicken Loans), eliminated the threat of RESPA challenges to administrative fees that are part of the broker’s commission. Brokers who ceased charging these fees in light of HUD’s policy statement or prior adverse court rulings may safely reinstate them. Furthermore, brokers may split these administrative fees with their licensed sales agents if they choose. Brokers should not split these fees with any third party who performed no services to earn them. Read More.
A recent posting on Realtor.org by the Legal Department of NAR addresses the issue as it was considered by the Court of Appeals of Ohio’s Tenth Appellate District (Ford v. Brooks, March 8, 2012). The facts were as follows.
Donna Brooks served as real estate agent for Jeff and Lisa Ford. She showed them a property at 40 Wexford Drive. On July 16, 2010, Ms. Brooks’ husband, also a real estate agent, escorted Lisa Ford through the property at which time she measured for furniture and discussed various issues related to a purchase. Read More.
An Illinois federal court has determined that a website operator’s willful violation of the NATIONAL ASSOCIATION OF REALTORS® (“NAR”) trademark rights entitled NAR to an injunction prohibiting any further infringing behavior as well as an award of $500,000 plus attorney’s fees.
John Fothergill (“Broker”) owned a real estate brokerage and was a member of NAR. In 2009, the Broker registered two domain names, listitonrealtor.com and listonrealtor.com. The Broker’s website advertised that consumers could pay a flat fee to the Broker and have their listings appear on a number of websites, including . In addition, some of the Broker’s communications appeared as though they were being sent by NAR. Read More.