Antitrust Lawsuits Spread to Florida and Pennsylvania
The wave of lawsuits tied to broker commissions in the country continues to grow. This week, two more lawsuits were filed against real estate companies and trade groups, accusing them of violating antitrust laws and conspiring to inflate broker commissions, as reported by Inman. The lawsuits, filed in Florida and Pennsylvania, both seek class-action status.
Participation Rule in Focus
Both suits relate to the National Association of Realtors’ Participation Rule, which requires listing brokers to offer buyer brokers compensation when putting a listing on a multiple listing service. This was the same policy at the center of the ruling in Sitzer/Burnett, a landmark decision for residential real estate.
Florida Lawsuit: Parker Holding Group vs. Florida Association of Realtors
In Florida, Parker Holding Group sued the 238,000-member Florida Association of Realtors, the largest state real estate association, and 16 residential brokerages. They alleged that home sellers in the state were forced to pay inflated commissions due to “anticompetitive restraints.” The defendants and co-conspirators allegedly used control of Florida’s realtor-affiliated multiple listing services to impose anticompetitive rules.
Florida Realtors’ general counsel informed its board of directors about the “latest in a series of copycat lawsuits,” denying the allegations against it in the communique.
Pennsylvania Lawsuit: Home Sellers vs. West Penn MLS
In Pennsylvania, home sellers are suing West Penn MLS, which is not realtor-affiliated but has a similar policy to the Participation Rule. Eight brokerages are also named in the lawsuit, including an affiliate of Berkshire Hathaway HomeServices.
The Nightmare for Residential Brokerages
The nightmare for residential brokerages arrived on Halloween, when a Kansas City jury found NAR, Keller Williams, and HomeServices of America liable in a case involving the Participation Rule, also known as the Clear Cooperation Policy. The plaintiffs were awarded $1.8 billion in damages, which could increase to more than $5 billion. The defendants are appealing while preparing themselves for a similar trial in another case next year.
Lawsuits Across the Country
Since the ruling in Sitzer/Burnett pertained explicitly to local transactions, other lawsuits have been popping up across the country on similar grounds. Even New York City, which doesn’t have a citywide MLS, is seeing a case against the Real Estate Board of New York and more than two dozen residential firms.
Department of Justice Scrutiny
The Department of Justice has also scrutinized the controversial NAR policy.
Orginal article: Link To Article – provided by Kansas City Realtors
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