“Official†Tag By In House Real Estate Broker Relationship Sued In Virginia Court
It has been a long tradition of developers dealing with a primary brokerage on their properties to manage the sales effort of new development. But an outside the fence brokerage is claiming that the title “official real estate company of Wintergreen Resort” is an antitrust violation of the 1890 Sherman Act and also the Virginia Anti Trust Act.
In my eyes this is a frivilious suit, but I may be missing something. The other real estate companies can sell inside the property, they just can not use the official tag and have a sales office inside the gates. This is a typical arrangement that is replicated across the country.
If for some crazy reason the suit is successful, what does this do to the method developers use to sell their new homes across the country? What would it do to your local market?
Wintergreen Resort and Roy Wheeler Realty joined Sept. 1 to form Wintergreen Resort Premier Properties, which has the exclusive rights to advertise as the “official real estate company of Wintergreen Resort,” operate an office on resort property and distribute marketing materials there. Other real estate firms can sell property at Wintergreen Resort, but not with the preferred treatment of Wintergreen Resort Premier Properties.
The exclusive dealing contract has given Wintergreen Resort Premier Properties a “dominant position” in the home sales market at the resort, driven out at least three competitors and left Mountain Area Realty with only a portion of the sales it normally would receive, Mountain Area Realty’s attorney said.
Wintergreen Resort Premier Properties “is charging sellers 6 percent commissions,” said Allen Foster, attorney for Mountain Area Realty. “Mountain Area Realty was charging 5 to 51/2 percent. So we know consumers are being harmed.”
The lawsuit accuses Wintergreen Resort of violations under the 1890 Sherman Antitrust Act, the Virginia Antitrust Act and the Consumer Protection Act, as well as conspiracy and fraud. The $6 million in damages represents lost commissions, Mr. Foster said. via The Washington Times