The California Association of Realtors (CAR) evidently wants no part of the Department of Justice.
The association announced on Wednesday that it will release new and updated forms after a delay caused by the DOJ launching a formal inquiry into CAR at the end of June. The DOJ expressed concerns about possible loopholes the forms might contain, which could allow agents to skirt new rules implemented as part of the National Association of Realtors’ (NAR) antitrust settlement.
CAR President Melanie Barker told association members in a statement that they needed to pay particularly close attention to one change — the removal of a listing broker’s offer of compensation, the thorny issue at the center of the nationwide lawsuit against NAR.
CAR plans to release the forms on July 24, which it believes will give agents time to review the changes before the settlement’s new rules take effect on Aug. 17.
“While we recognize that the offer of compensation remains legal and valid, we nonetheless believe this change is in the best interests of our members and consumers,” Barker wrote in the statement. “Our goal, with this change, is to be proactive, looking ahead to where industry practice needs to be.
“We know change is hard, but we also know that CAR needs to lead the way within the industry, as we have always done.”
At the time the DOJ informed CAR of the inquiry, new NAR President Kevin Sears participated in a closed-door meeting with assistant attorney general Jonathan Kanter. Sears then informed NAR’s members that the DOJ is keeping “a close eye” on the industry as the Aug. 17 deadline approaches.
“To be clear, NAR — and I personally — oppose any attempts to circumvent the settlement,” Sears wrote on Realtor Hub, a NAR member message board. “The practice changes should be implemented fully and in good faith, in the service of promoting consumer empowerment, consumer choice, and healthy competition.”
The DOJ’s inquiry came in response to an analysis done by University of Buffalo law professor Tanya Monestier. Her report concluded that CAR’s updated buyer representation and broker compensation agreement was “virtually unreadable” and that “no seller will read this monster of a document — much less be able to understand it.”
But organizations looking to avoid the DOJ’s watchful eye have their work cut out from them. In addition to the CAR inquiry, the DOJ filed an amicus brief in REX Real Estate’s appeal of the antitrust suit against NAR and Zillow, claiming that while optional, “no commingling” may still support anticompetitive behavior.
It’s another sign that the DOJ still plans to play a role in the fallout from the settlement.
“The DOJ is not done rattling cages in this industry,” Steve Murray, the co-founder of RealTrends Consulting, told HousingWire in response to the DOJ’s inquiry into CAR’s forms. “Their whole intent seems to be to bully the industry. The DOJ bigfooting on top of CAR’s forms, or forms written by anyone else, is overreach.”
