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Maryland real estate brokerage faces $11M lawsuit

Two Maryland companies are accused of breaking federal laws by wrongfully exchanging kickbacks for over a decade in a recent lawsuit. The couple that filed the claim contends that Lakeview Title and its part owner gave over $500,000 in illegal kickbacks to Long and Foster Real Estate's Creig Northrop Team in exchange for referring buyers to the title company for its settlement services. Both companies have denied the accusations detailed in the lawsuit and plan on preventing the impending real estate litigation from going to trial..

The lawsuit demands over $11 million in damages from the two firms and could see thousands of additional Long and Foster customers join as plaintiffs if it is granted the class action status the plaintiffs' attorneys have requested. An attorney with Long and Foster, which is one of Maryland's largest residential real estate brokerages, added that the defendants will request that the claim's request class certification be rejected.

The plaintiffs claim the companies conspired to create a "shame employment arrangement" between 2000 and 2007, during which times Lakeview allegedly paid a Long and Foster employee, even though she did not perform any services for the company. The lawsuit goes on to allege that the title company ceased those payments in 2008, but replaced them with monthly payments of $6,000 to $12,000 in exchange for marketing the title company's settlement services to customers. The plaintiffs argue those sums were not legitimate marketing fees, but rather paid based on the number of individuals referred by Long and Foster.

The plaintiffs used the Long and Foster team to purchase a home in 2008, after which they claim Lakeview violated the federal Real Estate Settlement Procedures Act by giving kickbacks to the real estate firm. They assert that this wrongfully deprived them and other buyers of benefiting from fair competition between settlement service providers as required by the law.

Source:  Baltimore Sun, "Federal lawsuit alleges kickbacks at Northrop real estate firm" Steve Kilar, May. 02, 2013

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