UPDATE: Today I recieved an email from Bo Newell, who is with Mountain Area Realty, concerning the legal action. When I first read the story, my impression was that the case was over a developers right to give a real estate firm the ability to market their homes. Instead, this is what Bo Newell sent me:

“This suit has nothing to do with a developer selling their own property.  This is a suit about an exclusive agreement between a Resort with no property to sell making an exclusive horizontal agreement with a real estate company to sell resale properties at the exclusion of all other realtors to have an office or even place any marketing materials in the resort. This sounds to me like a classic restraint of trade.”

Thanks for the heads up, Bo, it is always better to get the story correct.

Original Story:

It has been a long tradition of developers dealing with a primary brokerage on their properties to manage the sales effort of new development. But an outside the fence brokerage is claiming that the title “official real estate company of Wintergreen Resort” is an antitrust violation of the 1890 Sherman Act and also the Virginia Anti Trust Act.

In my eyes this is a frivilious suit, but I may be missing something. The other real estate companies can sell inside the property, they just can not use the official tag and have a sales office inside the gates. This is a typical arrangement that is replicated across the country.

If for some crazy reason the suit is successful, what does this do to the method developers use to sell their new homes across the country? What would it do to your local market?

Wintergreen Resort and Roy Wheeler Realty joined Sept. 1 to form Wintergreen Resort Premier Properties, which has the exclusive rights to advertise as the “official real estate company of Wintergreen Resort,” operate an office on resort property and distribute marketing materials there. Other real estate firms can sell property at Wintergreen Resort, but not with the preferred treatment of Wintergreen Resort Premier Properties.
The exclusive dealing contract has given Wintergreen Resort Premier Properties a “dominant position” in the home sales market at the resort, driven out at least three competitors and left Mountain Area Realty with only a portion of the sales it normally would receive, Mountain Area Realty’s attorney said.
Wintergreen Resort Premier Properties “is charging sellers 6 percent commissions,” said Allen Foster, attorney for Mountain Area Realty. “Mountain Area Realty was charging 5 to 51/2 percent. So we know consumers are being harmed.”
The lawsuit accuses Wintergreen Resort of violations under the 1890 Sherman Antitrust Act, the Virginia Antitrust Act and the Consumer Protection Act, as well as conspiracy and fraud. The $6 million in damages represents lost commissions, Mr. Foster said. via The Washington Times

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