The Minnesota Attorney General’s Office on Tuesday announced Edina Realty will pay $3.5 million to settle the agency’s investigation into allegations the real estate broker had accepted payments from a home warranty company in exchange for selling warranties to clients.
The AG will use the settlement money to provide refunds to clients who purchased the warranties. The settlement also bans Edina from entering such partnerships again and prohibits the company from licensing its name or trademark to any third party that could market its services to homebuyers and sellers.
The AG alleged Edina breached its fiduciary duty to clients by failing to disclose it received payments from Home Security of America (HSA) while promoting HSA’s home warranties. State investigators also alleged Edina led consumers to believe the home warranties were its own products and contained benefits they did not have.
Edina disputed the allegations and denied it violated any laws. The company argued advertising agreements like these are common in the real estate industry, and it provided written disclosures to customers about the HSA warranties and the fixed monthly fee Edina took in exchange.
“We worked cooperatively with the Attorney General’s Office to answer their questions and explain our industry, our company and how we do business,” an Edina Realty spokesman said in a statement. “At issue in this settlement is an advertising relationship with a third-party warranty company, a…
