09.10.08
RESPA Transaction Fees and Admin Fees in the News Again
I just read an article suggesting that real estate agents might think about charging clients a fuel charge. Thought was a fuel charge was tacky but adding on a “transaction fee” might sound better. Now I know some (large companies in particular) require payment of these “admin” or “transaction fees” usually for processing paper work, misc. office expenses, etc. And I think the idea has some appeal for Title Searchers and Abstractors too, but I see in the September 2008 Realtor Today that these fees are being challenged in Federal Court.
The U.S. Court of Appeals for the Eleventh Circuit (Atlanta) has decided that a suit against a brokerage for allegedly charging a buyer a transaction fee when no service was performed (Busby v. JRHBW Realty Inc., 11th Circuit 2008) could be certified as a class action suit. She filed a lawsuit charging that the brokerage had violated the Real Estate Settlement Procedures Act’s Section 8(b) by not providing any additional services to justify the fee. Charging the consumer when no services are provided violates RESPA.
I’m not sure what will happen with the new RESPA suit. The article also compares the differences with the Minnesota 2007 case Grady v. Burnet Realty Inc., where the court refused to classify that case as a class action suit. But a worthwhile read, and another consideration for anyone dealing with RESPA.