DENVER—State regulators have subpoenaed Re/Max International and 10 top Colorado real-estate brokerages as part of an investigation into whether title companies paid kickbacks to gain business from real estate companies and agents.
The investigation was prompted by a $1.35 million marketing agreement between Re/Max International and First American Residential Group of California.
Erin Toll, director of Colorado’s Division of Real Estate, said she has made no determinations of wrongdoing. “It’s just the agreement is highly suspect,” she said.
Toll said the agreement came to light through an anonymous complaint that included a lawsuit filed by Re/Max against First American for nonpayment.
Toll said she was looking into information that franchisee owners wouldn’t get sales leads or vacation points unless they used First American as the title company.
A First American spokeswoman in Santa Ana, Calif., didn’t have an immediate comment.
Geoff Lewis, senior vice president of Re/Max International Inc. of Greenwood Village, said the First American agreement is a national agreement.
Joe Clement, owner of Re/Max Properties Inc. in Colorado Springs, was among those receiving subpoenas and said he welcomes Toll’s investigation. “We’re not doing anything wrong,” he said.
Toll said she suspects it is a widespread practice for title companies to pay real estate agencies for customer referrals but that the illegal practice can lead to higher title insurance fees.
