Coldwell Banker Seacoast Benefit allegedly pocketed fee charges it informed its brokers had been going to the franchisor. The brokerage says the allegations are “an entire fabrication.”
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4 North Carolina actual property brokers have filed a lawsuit searching for class-action standing towards Coldwell Banker’s largest franchisee, alleging the brokerage pocketed fee charges it informed its brokers had been going to the franchisor.
In a Feb. 22 criticism, attorneys for brokers Jeff Domin, Laura LeFevre, Casey Roman, and Jonathan Adcock element an “unfair and misleading scheme” by Wilmington-based Coldwell Banker Seacoast Benefit “to counterpoint itself by surreptitiously retaining tens of millions of {dollars} in actual property commissions which are contractually owed to its brokers — each present and former.” Seacoast has greater than 800 currently-affiliated brokers.
The criticism alleges that Seacoast’s impartial contractor agreements say that the brokerage has to take a “6% Coldwell Banker Franchise Charge” from all the fee the brokerage receives from a transaction, earlier than splitting the remaining fee between the brokerage and the agent. Seacoast allegedly tells its brokers the whole thing of that payment goes to its franchisor, Coldwell Banker.
Nevertheless, the criticism alleges, Coldwell Banker started decreasing its franchise charges for its largest franchisees “[y]ears in the past” to “as little as three %” however Seacoast allegedly continued to take 6 %, helped itself to the distinction, and informed the brokers it was all going to the franchisor.
“Seacoast’s failure to remit the complete six % Coldwell Banker Franchise Charge to Coldwell Banker resulted in an altered fee break up that violated the events’ Settlement as a result of it materially modified the phrases of the agreed-upon Fee Schedule,” the criticism says.
“By deducting the six % Coldwell Banker Franchise Charge after which surreptitiously retaining a portion for itself, Seacoast has brought about substantial financial hurt to Plaintiffs and different equally located actual property brokers …”
Seacoast allegedly hid what it was doing “to discourage any investigation into Seacoast’s cost practices, and to keep away from any renegotiation of the phrases of the Settlement,” the criticism added.
In an emailed assertion, Seacoast’s outdoors counsel, Gary Shipman, managing companion at Shipman & Wright, informed Inman the lawsuit was meritless.
“We take the allegations on this lawsuit significantly, and the notion that any present or former brokers/brokers have been ‘overcharged’ or that Sea Coast has in any approach been misleading is an entire fabrication,” Shipman mentioned.
“Sea Coast takes delight in having delivered to every certainly one of their present and former brokers/brokers every part that Seacoast dedicated to offer, and however the allegations on this lawsuit, Sea Coast’s actions have at all times centered upon making an attempt to maximise every agent/dealer’s skills to succeed underneath the Coldwell Banker model, of which Sea Coast is part.
“We remorse that these former brokers/brokers who filed this motion didn’t have the courtesy to confront Sea Coast with any of their allegations both whereas they had been working with Sea Coast or afterwards, because the allegations they and their attorneys have made signify a gross misunderstanding of what Sea Coast has charged, supplied or tried to offer to them.”
Shipman added that the brokerage has obtained an “overwhelming present of help” from its group members, who’ve additionally mentioned the lawsuit is “frivolous.”
“We intend to vigorously defend this lawsuit, as we imagine it to be fully with out advantage, legally and factually,” Shipman mentioned.
Shipman famous that “one of many fallacies” of the swimsuit is that Seacoast pays Coldwell Banker a “franchise payment.”
“Seacoast doesn’t pay a ‘franchise payment’ to Coldwell Banker; they pay a ‘royalty’ and ‘advertising payment,’” Shipman mentioned. “Brokers are charged a ‘franchise payment’ by Seacoast for the privilege of promoting actual property by way of Seacoast’s Coldwell Banker franchise, for which they’re supplied particular ‘providers’ by the Coldwell Banker Seacoast franchise.”
Requested what the royalty and advertising payment is, whether or not the franchise payment is paid on high of the agent-broker fee break up, and what providers Seacoast gives in alternate for this payment, Shipman didn’t reply.
The criticism seeks class-action standing on behalf of all brokers and brokers in North Carolina who signed an impartial contractor settlement with Seacoast and had been paid commissions from which a 6 % Coldwell Banker Franchise Charge was deducted, which the plaintiffs estimate quantity within the “lots of, if not hundreds.”
The criticism seeks a jury trial and alleges breach of contract, violation of the North Carolina Unfair and Misleading Commerce Practices Act, and unjust enrichment.
Learn the criticism:
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E mail Andrea V. Brambila.
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