Commission Class Action Lawsuits Part 10

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Critical MLS Questions

MLS had 3 meetings last week and our students gave the meetings a mixed report card. I will give a detailed narrative on the meetings and MLS actions taken after the meeting, in next week's newsletter.

Lawsuits expanding to multiple states! Texas commission lawsuit names real estate teams and individual broker as defendants

The commission lawsuits have arrived in Texas, but the QJ Team suit, named after its lead plaintiff, isn’t like your Moehrl, Sitzer/Burnett, March, Gibson or Batton 2 commission lawsuits. While the lawsuit does name large corporate brokerage firms as defendants, including Keller Williams, Side, HomeServices of America, and Fathom Realty, the robust defendant list also includes real estate teams, such as The Loken Group and Hexagon Group, as well as an individual broker, Mark Anthony Dimas.

Despite NAR being identified in the complaint as the creator of the alleged conspiracy, the trade group is not named as a defendant in the lawsuit. (It is, however, named as a co-conspirator along with Anywhere and RE/MAX.) Instead, the Texas Association of Realtors, as well as local Realtor group the Austin Board of Realtors, MetroTex Association of Realtors, Houston Association of Realtors are named.

Illinois homebuyers file second commission lawsuit, and it may be the largest one yet

What’s different about the $200B(!) Gibson commission lawsuit?

Accepted by the court on Oct. 31, 2023, the Gibson lawsuit pits three Missouri home sellers, Don Gibson, Lauren Criss and John Meiners, against National Association of Realtors, Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna and Douglas Elliman.

Like the Sitzer/Burnett, Moehrl and Nosalek lawsuits, the Gibson suit accuses the defendants of conspiring to inflate real estate agent commissions in violation of the Sherman Antitrust Act. According to the plaintiffs’ initial complaint filing, the “cornerstone of the conspiracy” is NAR’s Clear Cooperation rule, which requires all home sellers to make a blanket, unilateral offer of buyer broker compensation when listing a property on the MLS.

One of the named defendants has a very different business model than the more traditional brokerages named in Sitzer/Burnett. Redfin, which has criticized NAR and its rules, argued for increased consumer transparency, and gives a discount to the seller, is a party to the Gibson suit. Redfin was likely named because its salaried agents offer standard commission rates to buyer brokers.

NAR Lawsuit Could Impact CRE Commissions

The $1.8 billion verdict serves as a wake-up call for commercial leasing professionals.

In October 2023, a Missouri jury awarded a staggering $1.8 billion in damages in a case involving the National Association of Realtors (NAR) and certain real estate companies. Though this ruling related to residential brokerage commissions, this landmark verdict is sending ripples throughout the real estate industry and could have far-reaching implications for commercial transactions, in particular commercial leases, in the event that the standard broker landscape is ruled anticompetitive.

Commission lawsuits spread to Manhattan

The lawsuit accuses REBNY and 26 brokerages of conspiring to inflate agent commission

It appears that no real estate brokerage firm in the U.S. is safe from a commission lawsuit. On Wednesday, Manhattan home seller Monty March filed a lawsuit in U.S. District Court in the Southern District of New York, alleging that Real Estate Board of New York rules governing the multiple listing service in Manhattan kept commissions high and violated state and federal antitrust laws.

In addition to REBNY, the robust list of defendants includes: Real Estate Board of New York Listing Service, Brown Harris Stevens, Christie’s International Real Estate, Coldwell Banker, Compass, Core Marketing Services, The Corcoran Group , Douglas Elliman, Elegran, Engel & Volkers, Fox Residential Group, Halstead Real Estate, Homesnap, Keller Williams NYC , Leslie J. Garfield & Co, Level Group, M.N.S. Real Estate, Modern Spaces, The Agency, The Modlin Group, Nest Seekers International, Oxford Property Group, R New York, RE/MAX, SERcHANT., Sloane Square, and Sotheby’s International Realty Affiliates. Notieably missing from the list is the National Association of Realtors.

It is going to get worse!

Live CE classes are better than Correspondence, particularly for this Class Action issue, additionally we have added the discussion and suggested strategies to reduce your risk to our DCE courses. 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 should seriously consider signing up for our next live classes, Jan 6-7 or Jan 8-9, 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.

More to come next week, best regards,

Jerry Royse, ITI

Jerry Royse, at the helm of Royse and Associates, stands out in real estate education with over 35 years of experience teaching across 46 states and 5 countries. A seasoned educator, Jerry has trained thousands in Sales Pre-Licensing and Continuing Education, also applying his expertise as an expert witness in over 30 legal cases and successfully closing over 1100 homes as a Buyer Broker. His extensive knowledge marks him as a preeminent expert in the field.

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