Thursday, February 22, 2007
An interesting class action lawsuit was filed recently. The lawsuit alleges that a Minnesota real estate firm has been providing incentives to its agents to refer their clients to an affiliated title company. The title company apparently has some of the highest fees in the area. The agents provided the bare minimum required disclosure, but did not disclose that the were not exactly getting the best price in town. Rather than focus on RESPA disclosures, the case seems to pivot on the breach of fiduciary duty the agents and brokers owed to their clients. Basically, the agents did not represent their clients' best interests because it knowingly steered them to the most expensive title option. This should be a very interesting case to watch.