In both of the following antitrust cases from the past year, the court said there was no evidence that the real estate professionals were conspiring to fix fees or otherwise harm the market.
1. Hyland v. HomeServices of Am., Inc., 771 F. 3d 310 (6th Cir. 2014)
Brokers did not conspire to fix commissions.
As in prior quarters, most of the RESPA cases in this edition deal with possible kickbacks.
1. Edwards v. The First American Corp., 798 F.3d 1172 (9th Cir. 2015)
Suit alleging kickback scheme by which title insurer purchased a minority interest in a title agency and title agency agreed to refer business to the title insurer could proceed as a class action.
In the cases discussed below, the buyer sued the real estate professional for failure to disclose a property condition, even though that condition was disclosed in an inspection report or a disclosure form. In all three of these cases, the real estate professionals were found not to have breached their fiduciary duties. In one of the cases, however, the licensee could be liable for fraud based on his own statements, separate from the inspection report, regarding the property condition.
The Agency cases reviewed this quarter address a variety of different issues important to real estate professionals. In an Indiana case, the court ruled that an agent breached the fiduciary duty owed to her client by purchasing a property that her client wanted. In other cases, the courts examined whether a licensee’s fiduciary duty extends to former clients and tenants of a client.
The recently-enacted Protecting American Taxpayers from Tax Hikes (PATH) Act (H.R. 2029, P.L. 114-113) includes two NAR-supported provisions affecting the Foreign Investment in Real Property Tax Act (FIRPTA) that are estimated to boost significantly foreign investment in U.S. commercial real estate.
In an effort to combat money laundering in the real estate sector, the Financial Crimes Enforcement Network (FinCEN) at the Treasury Department issued a Geographic Targeting Order (GTO) that will temporarily require certain U.S. title insurance companies to identify the natural persons behind companies used to pay “all cash” for high-end residential real estate in Manhattan and Miami-Dade County.