Court Rules Administrative Brokerage Fee Violates RESPA

michelle-lind
Michelle Lind

I received an email from Michelle Lind, General Council to the Arizona Association of REALTORS, that included information about a federal court ruling that declared a brokerage firm’s $149 administrative brokerage fee to be a RESPA violation. Her email stated: “A federal district court recently ruled that an administrative brokerage fee was not sufficiently related to any specific settlement service performed, resulting in a violation of Section 8(b) of the Real Estate Settlement Procedures Act (“RESPA”). Section 8(b) prohibits charging for “real estate settlement services” unless the fee charged is for “services actually performed.” To read a summary of the court’s opinion, see www.realtor.org/letterlw.nsf/pages/0509busby2.  An appeal is likely.”

Thanks, Michelle, for keeping us updated. This ruling will probably affect how many real estate brokerage firms handle this fee.

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