Are Class Action Real Estate Commission Lawsuits coming to Alaska?
Mastermind groups nationwide have moved the discussion of these class action lawsuits to the top of their concerns Cheryl. Are you hearing any discussions?
So what's the big deal? In the two lawsuits that have already been filed, where multi million dollar settlements have already been offered by major real estate companies, the calculation for the potential damages in the cases above, the plaintiffs allege, began to occur in 1996 when NAR adopted the adversary commission rule, that requires the listing broker to offer a unilateral offer of compensation to other MLS participants, regardless of who they represent.
The Moehrl case, which will be heard in Illinois, involves thousands of home sellers who paid a commission from 2015-2020 as well as "current and future" sellers if the plaintiffs win.
This suit alleges that all commissions since that date, should potentially be returned to the sellers who listed their home.
As an expert witness and consultant in over 35 Alaska Real Estate cases, I have seen attorneys cast the widest net possible in a lawsuit, to increase potential recovery dollars for their clients.
How wide is the preliminary net in these class action lawsuits?
Returning the commissions since 1996 or 2015 in the 17 states listed above, multiplied by triple damage claims, allowed in many of the states where the suit is taking place, brings the total potential damages to $70.2B. The potential risk and lawfare cost to defend the industry has led to the decision of 2 major real estate companies to settle for $138M. You may have heard the term recently; lawfare. It can mean using the court system to go after the other side and burden them with excessive legal expenses.
This could potentially cost the real estate industry tens or hundreds of millions of dollars to defend itself.
Another consideration we need to begin to put into our real estate practices, includes implementing the settlement agreement concessions which require significant changes to brokerage practices, relating to the conduct that was challenged.
Do you know what those promises were?
We will discuss in our next installment, Commission Class Action Lawsuits Part 4, what measures you need to begin to put in place to protect yourself and your assets.
It is going to get worse!
Live CE classes are better than Correspondence, particularly for this issue.. It was exciting to see the networking, partnerships and strategic partnerships, team building recruiting and resource sharing that happened at our last live classes. You can't get those benefits sitting at home taking a correspondence class in isolation.
You should seriously consider signing up for our next live classes, Nov 11-12, 2023 or Nov 13-14, 2023 where we will give you tools to reduce your risk for the class action lawsuits that are likely heading our way. We will have workshops and role plays to refine your commission discussion to reduce your risk. You can't get that same level of protection and training in a correspondence class. But hurry to register, these classes have limited slots available and will sell out.
Jerry Royse, ITI