A US jury has found real estate firms liable for inflating commissions and has awarded damages of $1.78 billion. According to the lawsuit, negligent service and excessive costs were cited as being the primary reasons for such a ruling.
The lawsuit, captioned Wahn v. Realogy Corp., was filed in 2015 on behalf of real estate brokerage company customers who claimed that Realogy, NRT LLC, and HomeServices of America’s commissions were improperly shared with its subsidiaries. These subsidiaries provided services to real estate agents and real estate brokerages associated with the companies such as yard signs, advertising, lockboxes, and website portals.
The lawsuit further claimed that Realogy, NRT LLC, and HomeServices of America had engaged in a corporate breach of contract and had cost their customers millions of dollars over a period of years. The group alleged that the companies had violated their contractual agreements by paying commissions to subsidiaries for services that were not specified in the commission structures that were negotiated and agreed upon by real estate brokerages.
The jury unanimously found Realogy, NRT LLC, and HomeServices of America liable for breaching their contractual agreements and awarding damages of $1.78 billion in favor of the plaintiffs. The damages included compensatory, disgorgement, and contract damages.
This ruling is a significant reminder of the need for transparency in real estate transactions and the importance of ensuring that commissions and other fees are clearly communicated. It also serves as a warning to all those in the real estate industry that they must abide by their contractual agreements and ensure that they are receiving full market value for any services or products they are providing.
Overall, this judgment is an important milestone in setting an example of how corporate accountability should be practiced in the real estate industry. This ruling is also a wake-up call to all those companies involved in the real estate industry that they must ensure that their customers are continuously receiving the best services available and that their fees and commissions are reflective of market prices.