There are just five days to go until the business practice changes outlined in the National Association of Realtors’(NAR) nationwide commission lawsuit settlement agreement, but the trade association is not out of the lawsuit woods just yet.
In a lawsuit filed on Monday by Douglas Hardy, Glenn Champion and Dylan Tent in U.S. District Court for the Eastern District of Michigan, the plaintiffs claim the requirement that all Realtors and brokers in Michigan be member of NAR, their state Realtor association and a local board of Realtors, represents an antitrust violation.
Hardy is the owner of Snyder Kinney Bennet and Keating LLC, which does business in Southeastern Michigan as Signature Sotheby’s International Realty. In addition, Hardy and Champion are primary brokers for Sotheby’s firms that operate in Southeastern Michigan and Tent is a representative of all agents and associate brokers at Sotheby’s in the region.
In addition to NAR, the defendants include Michigan Association of Realtors (MAR), The Grosse Pointe Board of Realtors (GPBOR), Greater Metropolitan Association of Realtors (GMAR), North Oakland County Board of Realtors (NOCBOR) and RealComp II, which is a “software company that manages the MLS and regulates the use of the MLS by brokers and agents.”
In the suit, the plaintiffs allege that the “compulsory membership in these associations” is a violation of antitrust laws, as well as an example of “economic coercion, unfair restraint on trade and conspiracy.”
The plaintiffs’ complaint says that these claims are predicated in part on NAR’s nationwide commission lawsuit settlement agreement, which bans offers of buyer broker compensation from the MLS, which the plaintiffs claim “essentially invites brokers and agents to participate in deceptive compensation practices,” and “encourage discrimination among sellers and sellers’ agents, which will negatively affect consumers, agents and brokers.”
According to the complaint, the plaintiffs believe the “wrongful acts of the defendants” have caused them to lose earning potential, and have been an overall detriment to their business. Additionally, they claim that the “compulsory nature of membership in the defendants’ organizations in order to access the MLS is a violation of their ability to conduct business in a fair and unencumbered manned which has resulted and will continue to result in them incurring damages.”
The complaint states that after lawsuits in Florida, Georgia, Alabama and California found that compulsory membership of NAR for access to the MLS to be an unfair restraint of trade, NAR transferred the mandatory membership requirement to state and local associations, which the plaintiffs claim “essentially perpetuates their same compulsory membership practices which has been found to be illegal.”
The suit is seeking class action status for a class of plaintiffs that includes all real estate agents and brokers who are required to be members of NAR, all agents and brokers who are required to be members of MAR, all agents and brokers who are required to be members of a local board such as GPBOR, GMAR and NOCBOR, and all agents and brokers who must use RealComp II to access the MLS.
The plaintiffs are asking for damages, injunctive relief, and a jury trial.
The defendants did not immediately return a request for comment.
