When was the HUD case dismissed by the Court, and what was the impact on Corcoran?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
On May 23, 2007, HUD filed a lawsuit in the Central District of California, United States District Court, against Realogy, NRT, Coldwell Banker Residential Brokerage (collectively, the "Realogy parties"),
Property I.D., several Prudential Real Estate franchisees, and the joint venture companies between Property I.D. and these former joint venture partners. The lawsuit alleges that Natural Hazard Disclosure Reports ("NHD Reports") are settlement services under RESPA, although acknowledges that NHD Reports are not an enumerated service identified in that statute or identified in the regulations. Because NHD Reports are allegedly settlement services, HUD further alleges that the defendants violated RESPA in their operation of the various joint ventures. In July 2007, the Realogy parties filed a motion to dismiss the lawsuit on the grounds that there is no statutory basis to seek disgorgement under RESPA, and no basis for seeking injunctive relief as the allegedly unlawful Realogy Group joint venture was terminated on June 30, 2006. On August 8, 2007, the Court entered a Stipulation extending the briefing on the motions to dismiss. On January 18, 2008, HUD filed an opposition to the motions to dismiss filed by all defendants. On February 15, 2008, the Realogy parties filed their reply to HUD's opposition, which was denied on April 28, 2008. In May 2008, HUD and the Realogy parties agreed to settle the matter with no imposition of fines or penalties and a permanent injunction to refrain from future joint ventures for hazard disclosure reports operated in violation of RESPA. The Settlement Agreement has been fully executed and the Consent Decree and Release were filed with the Court on February 9, 2009. The Court dismissed the case on July 14, 2009.
Source: Item 3 — LITIGATION (FDD pages 18–25)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, a lawsuit filed by HUD against Realogy, NRT, and Coldwell Banker Residential Brokerage was dismissed by the court on July 14, 2009. The lawsuit alleged violations of the Real Estate Settlement and Procedures Act (RESPA) related to Natural Hazard Disclosure Reports and joint ventures.
Prior to the dismissal, the Realogy parties had filed a motion to dismiss the lawsuit, which was initially denied. However, HUD and the Realogy parties eventually reached a settlement agreement to avoid fines or penalties. As part of the settlement, a permanent injunction was put in place to prevent future joint ventures for hazard disclosure reports that would violate RESPA.
The settlement agreement was fully executed, and the Consent Decree and Release were filed with the Court on February 9, 2009, leading to the case's dismissal on July 14, 2009. The FDD indicates that Corcoran was not subject to any pending or resolved litigation against it, but this HUD case involved its parent company, Realogy.