Lawsuits that Need to Happen
Lawsuits and Causes of Action that Need to be Litigated
Affiliated Business Arrangements
Real estate brokers and firms that abuse supervisory duties and their duties to clients in order to steer clients to affiliated business arrangements. Brokers often provide incentives to managers based upon the capture rate of the agents they supervise.
- Real estate brokers and firms that abuse supervisory duties in order to increase the frequency of dual agency transactions.
- Real estate brokers that increase client exposure to dual agency transactions through the use of market manipulations such as:
- Pocket Listings – brokers abuse their position of trust and reliance and persuade clients to limit market exposure of property only to in-house buyers. This severely limits market demand and assures broker will collect excess in commissions.
- Financial incentives to in-house agents or disincentives to cooperating brokerage firms
- Intentionally pulling listing data from free redistributors of data in order to reduce market exposure of listings.
- Claiming copyrights on client data in order to limit market exposure of listings to the company website.
- Broker “designates” an already conflicted agent as a client representative (i.e., a manager).
- Broker improperly supervises “designated agents” because the broker is a dual agent and conflicted.
- Presumption of undisclosed dual agency is not overcome by designated agency forms. Although “disclosure” of risks may be statutorily satisfied, conduct inconsistent with fiduciary duties is not exempted and presumptions of breach of duty still exist in a dual agency situation (brokers are still dual agents).
Interference with Fiduciary Relationships – Conspiracy to Commit Bribery
- Listing brokers and agents representing sellers routinely offer secret compensation (often termed “bonuses”) to buyer brokers without the buyer’s knowledge or informed consent. The Realtor Associations in each region that own MLS’s typically facilitate this practice by providing hidden fields that only agents can see.
- Commercial bribery statutes typically define the term to include corruptly offers, gives, or agrees to give, directly or indirectly, any benefit, consideration, compensation, or reward to any fiduciary of a person with the intent to influence the person’s performance of duties as a fiduciary in relation to the person’s employer’s or principal’s business.
Self-dealing and Interference with Agency Relationships
- Real estate brokers who meet in private (at Realtor Association forms committees) and alter standard form purchase agreements in such a way that causes an increase in fees for their affiliated business arrangements.
- Real estate broker groups like the MLS and Realtor Associations that facilitate commission fixing through limitations on data.
- Brokers who avoid negotiating their fee by telling buyer clients that they work for free because the seller is paying their fee.