by Peg Ritenour

(Jan. 2012) The appeal of the controversial case, Busby v. Realty South, has been stayed, pending the outcome of another case, Freeman v. Quicken Loans, that will be heard by the U.S. Supreme Court next month. The Freeman case before the U.S. Supreme Court involves the issue of whether a fee  charged a consumer must be split between two or more settlement service providers for Section(8)(b) of RESPA to be violated. Because this is the same issue on appeal in the Busby case, proceedings in this Alabama case have been stayed until the Supreme Court issues its ruling, which is expected later this year.

In the Busby case, a federal district court ruled that the collection of a “flat” administrative fee in addition to a percentage commission charged by the broker violated Section 8(b) of RESPA.  An Ohio federal court had ruled similarly in a case decided last summer. A motion asking the Ohio court to also stay its proceedings was filed by the Ohio brokerage as well.

NAR filed an amicus brief in support of the position that Section 8(b) cannot be violated unless a fee is shared with an entity that does not perform any services in exchange for that fee. The Supreme Court has scheduled oral arguments on this case for Feb. 21, 2012, and is expected to rule on the case by the end of its term in June 2012.