Legal Blog - RESPA


Guide to Unearned Real Estate Fees

Sep 20, 2016


A new guide that further explains HUD's RESPA Statement of Policy on Unearned Fees is now available online. NAR asked a well known RESPA expert to develop this guide that details what the new HUD statement means to real estate brokers about the legality of charging fees, such as transaction fees, available at:

HUD, of course, has issued an official statement that administrative fees in excess of the value of services rendered for those fees are a violation of RESPA, whether there's a sharing of such fees or not.

The 7th Circuit Court (Illinois, Indiana, Wisconsin) has ruled that RESPA does not prohibit such fees unless they are shared, although courts in other circuits could affirm the HUD ruling at some which case REALTOR® firms in that area could face substantial lawsuits (possibly class action) for all such fees 

Firms which charge this fee should document that the fee DOES represent a service which is NOT included with the usual brokerage commission...and the amount is reasonably commensurate with the cost of the service.
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