A Broomfield title company affiliated with at least two local Re/Max offices is accused of overcharging consumers so it can afford to give real-estate agents kickbacks in exchange for business.
The Colorado Department of Insurance and the Colorado Real Estate Commission on Wednesday launched investigations into the title company’s business practices and its relationship with Re/Max offices in Broomfield and Denver.
Horizons Title, which does business under the name American Liberty Title Co., “appears to be acting in violation of the law,” Deputy Insurance Commissioner Erin Toll said Wednesday.
“When companies use unfair methods to compete, we have a distortion in the market and, ultimately, a rise in the price of insurance for consumers,” Toll said.
Lucas Lorenz, an attorney for American Liberty Title, said, “Neither my client nor myself has received letters” from the state agencies. He did not elaborate.
Officials at Re/Max Horizons Group, the brokerage that shares office space with American Liberty and allegedly steers customers there, did not return a call for comment.
“Re/Max International doesn’t know anything about this and is not involved,” said Bill Echols, vice president of communications for Re/Max’s Denver headquarters. “We know that some of our offices might be partners in title companies, but we encourage them always to abide by state and federal regulations and never to get involved in any kickbacks.”
Title-insurance entities – including agencies, brokers and insurers – are barred from giving freebies, discounts, refunds, waivers and other things of value in exchange for referrals.
But newsletters posted on the title company’s website make an array of improper promises to real-estate agents who steer customers to the company, Toll said.
For example, the company offers to give agents who use its services a $175 refund when they buy, sell or refinance their own properties. The company also pledges to agents that it will pay “half of your advertising costs for ads in the Saturday Rocky Mountain News.”
American Liberty Title is not an advertising client of the Denver Newspaper Agency, which runs the business operations of The Denver Post and Rocky Mountain News.
However, Re/Max Horizons Group is, agency spokesman Jim Nolan said.
“We have no sales agreement, promotional agreement or any kind of other business relationship with American Liberty or Horizons Title,” Nolan said.
State investigators learned of the title company’s relationship with local Re/Max offices after Antonio Encinias of Denver filed suit against the title company and brokerage in March.
Encinias alleges, in part, that the brokerage failed to inform him of its interest in the title company.
He also claims that the title company overcharged him when it completed the sale of his home.
Staff writer Christine Tatum can be reached at 303-820-1015 or ctatum@denverpost.com.
