Administrative brokerage commission fee of $149 (the “ABC Fee”) violates Section 8(b) of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601, et seq.

This matter is before this Court on Plaintiff Vicki V. Busby’s (“Busby”) appeal of the district court’s denial of class certification to a class of plaintiffs seeking damages arising out of Defendant JRHBW Realty, Inc.’s, d/b/a RealtySouth (“RealtySouth”), alleged violation of Section 8(b) of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601, et seq. AFFIRMED IN PART, REVERSED IN PART, VACATED AND REMANDED.

On May 26, 2004, Busby, the putative class representative, purchased a home in Jefferson, Alabama, using a federally related home loan. Busby employed a RealtySouth real estate agent who earned a sales commission based on a percentage of the purchase price. This brokerage commission, paid by the seller, was lowered from 3% to 2.5% in order to encourage the seller to accept Busby’s offer. During the closing and settlement, RealtySouth charged Busby an Administrative Brokerage Commission fee of $149 (the “ABC Fee”). The closing attorney is Ms. Busby’s current counsel. He explained the closing documents and the HUD-1 statements to Busby 2 and engaged in discussions with her concerning the transactions.

Initial complaint.
Appeal from United States District Court for the Northern District of Alabama