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Supreme Court Strikes Down Section of State Real Estate Law

February 22, 1985

SPRINGFIELD, Ill. (AP) _ State officials can’t bar real estate brokers from offering prizes, money or other inducements to prospective home buyers, the Illinois Supreme Court ruled Friday, upholding a lower court ruling.

The decision came in a case involving Coldwell Banker Real Estate Services of Illinois Inc., a subsidiary of Sears, Roebuck & Co., which had asked the state for an opinion on the legality of two marketing plans it proposed to offer customers.

The state Department of Registration and Education told the company the plans were prohibited under the law.

The company had developed two marketing plans for homebuyers. One offered a coupon book for discounts on Sears products and the other proposed a discount on brokerage commissions to employees of Coldwell Banker, Sears and Allstate Insurance Co., like Coldwell Banker a division of the Sears Financial Network.

Rodger Wunderlich, spokesman for the Illinois Association of Realtors, called the ruling ″a victory for open competition,″ but said he was unsure what impact it would have on the real estate business.

He added the membership of his organization was divided on the issue.

″Some people ... wanted to see the rule stricken, others wanted to see the rule upheld,″ Wunderlich said.

Joe Hanauer, chairman of Coldwell Banker Residential Real Estate Group, said the company was gratified by the ruling.

He said the company has maintained that laws prohibiting such marketing plans ″have the effect of stifling competition as well as denying consumers important benefits including opportunities to save money.″

Justice Thomas Moran said in his opinion that there was ″nothing inherently unlawful in either the coupon program or the commission discount plan.″

The state had contended that while there was nothing deceptive or fraudulent about the proposals, the plans have the potential to mislead consumers.

″No evidence has been presented which would demonstrate that the use of commission discounts or discount coupons is inherently harmful or dishonest or likely to confuse or mislead the consumer,″ the court said.

The court said that a more limited ban on the use of deceptive or misleading offerings would be more appropriate.

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