Legal Beat: Keller Williams v. Iowa Realty
Friday, July 06, 2012 7:00 AM
Golden Circle Real Estate Group LLC, doing business as Keller Williams Realty Greater Des Moines, filed a lawsuit June 17 claiming that Iowa Realty Co. Inc. is violating real estate contracts and interfering in trade by failing to inform customers that it will not share commissions with Keller Williams. The dispute centers on Iowa Realty’s decision not to share commissions with Keller Williams, which entered the Greater Des Moines market when it bought Burnett Realty in March. Iowa Realty has prevailed in similar lawsuits filed in the past by other competitors.
Keller Williams has not asked for a specific damage award. The company said in the lawsuit that it is losing money because the commissions are not being paid.
Iowa Realty has told Keller Williams since 2006 that it would not share commissions if the national real estate company entered the Greater Des Moines market. It reiterated that sentiment earlier this year when Doug Burnett was considering a merger with Keller Williams. It restated its position after the merger. There is no standing policy, rule or law that requires real estate companies to share commissions, although it is a common practice that is encouraged by the Des Moines Area Association of Realtors, an organization that counts both companies as members. Iowa Realty’s policy is to share commissions with Keller Williams on sale of new homes and some bank-owned properties. This dispute is about commissions on the sales of existing houses.
Keller Williams has taken issue with Iowa Realty’s business practices. In addition, it has accused Iowa Realty of slander and libel as the result of comments in an internal newsletter published by an Iowa Realty branch office that describes Keller Williams’ business model as a “pyramid scheme.” Keller Williams said in a statement that it continues to share commissions with Iowa Realty.
Iowa Realty says it is acting in the best interests of its agents and customers.
Expect Iowa Realty to file a motion seeking to have the case dismissed.