Compass transaction fee case dismissed
The Efron case, filed by Florida homebuyers, had accused the brokerage of unfairly and illegally adding a $475 fee to their 2024 home purchase transaction.
Six weeks after suing Compass for allegedly conducting "unfair and deceptive business practices" by charging "an undisclosed flat-fee to all Florida purchasing clients," the homeowners who filed the lawsuit have voluntarily dismissed the case, according to court documents.
What this case was about: Jeff and Milissa Efron purchased a home in 2024 using a Compass agent, alleging in their June 23 complaint that the company charged a $475 transaction fee at closing despite the buyer agent indicating that all agent fees would be paid by the sellers.
The complaint further alleged that the couple's purchase contract had been amended to include the transaction fee via an "additional terms" page, a modification characterized as an "illegal practice of law."
The plaintiffs sought class status to include all buyers who had paid a similar flat fee to Compass Florida over the past four years.
The dismissal: In a two-sentence statement filed with the circuit court for Palm Beach County on Aug. 4, the plaintiffs indicated they were "dismissing all claims against Compass Florida, LLC without prejudice" — meaning the case could be refiled at a later date.
The document did not disclose any other details, including whether the parties had settled in lieu of pursuing litigation.
Compass declined to comment on the filing, and attorneys for the plaintiffs did not immediately respond to Real Estate News' request for comment.
'Junk' fees or 'standard practice'? Transaction fees, often called administrative fees, are not uncommon, and Compass publicizes its use of "flat transaction commission fees" as a revenue source in its quarterly earnings reports.
After the Efrons sued the brokerage, Compass reiterated that charging an admin fee "has been standard practice in major markets for years, and is done by many other brands in the industry." Notably, the SERHANT listing agent involved in the Efrons' transaction charged a transaction fee of $495.
Some consumer advocates and agents oppose the fees, however. A report published by the Consumer Policy Center in July said "junk" brokerage transaction fees are increasingly common but not clearly disclosed to buyers and sellers, arguing that such fees disproportionately harm lower-income and first-time buyers and cost consumers an estimated $2 billion annually. The report also claims the fees are unpopular with agents, who sometimes eat the cost rather than pass them on to their clients.
Whether the practice will lead to other lawsuits or spur new regulations is yet to be seen.