Update on the NAR Settlement with the DOJ

The ongoing legal proceedings between the National Association of Realtors (NAR) and the Department of Justice (DOJ) have taken another significant turn. For those in the real estate industry and prospective home buyers and sellers, this development holds considerable importance.

Background

The DOJ filed a lawsuit against NAR in 2020, alleging that certain NAR policies were anticompetitive and hindered fair competition in the real estate market. The main issues revolved around rules that allegedly kept commission rates artificially high and reduced transparency for consumers.

Recent Developments

In the latest update, NAR has agreed to a settlement with the DOJ to address these concerns. Here are the key points of the settlement:

1. Increased Transparency: NAR will now require all member brokers to disclose commission rates to both buyers and sellers. This move is aimed at giving consumers a clearer understanding of the costs involved in a real estate transaction.

2. Unrestricted Offers: Real estate brokers will no longer be able to restrict certain offers based on commission splits. This change is designed to foster a more competitive environment, where offers can be considered on their merit rather than the commission being offered.

3. Public Access to MLS Data: NAR will provide more public access to MLS data, making it easier for consumers to see the full range of available properties and understand market conditions.

4. Prohibition of Misleading Practices: The settlement includes measures to prevent misleading practices that could potentially confuse consumers regarding the payment of commissions and the roles of real estate professionals.

NAR Continues Its Battle to Keep DOJ Case Closed

While NAR awaits the finalization of its March 15 settlement with home sellers, the organization is turning its attention to a previously closed chapter in the ongoing commissions litigation: NAR's battle with the DOJ.

On Monday, NAR filed a rehearing petition with the U.S. Court of Appeals in its case involving the DOJ. This petition is in response to an April ruling where a panel of judges decided that the government could reopen its investigation into potentially anticompetitive real estate practices resulting from NAR's rules. The court has ordered the DOJ to respond to the petition within the next 15 days.

NAR's Stance

In the latest filing, NAR attorneys argued that the panel's April decision involves "far-reaching and exceptionally important" errors. They stated that the decision conflicts with other decisions made by the appeals court and the Supreme Court, and will fundamentally change the landscape for those at the bargaining table.

"The panel's errors are far-reaching and exceptionally important. Every day, federal agencies resolve civil and criminal enforcement actions through agreements with private parties. It is a bedrock principle that the government must honor its word in those contracts, no matter who occupies the White House or leads the Antitrust Division," NAR attorneys argued.

Background on the Case

The antitrust case was originally settled in 2020 during the Trump administration. In 2021, following a change in administrations, the DOJ wanted to withdraw from the deal and reopen the investigation. That request was rejected in district court, but the Court of Appeals reversed that decision. The arguments have centered on the wording of the agreement, specifically whether the case being "closed" implies it could never be reopened.

Implications for the Industry

The decision on whether the DOJ can reopen its investigation could have major ramifications for the industry. In February, the DOJ filed a Statement of Interest in response to the MLS PIN settlement in the Nosalek case, calling for fundamental changes to how commissions should be handled. These arguments could provide a blueprint for the government's case against NAR if the court allows it to be reopened.

Conclusion

The NAR settlement with the DOJ marks a pivotal change in the real estate industry, emphasizing fairness and transparency. At Realty Net LLC, we are committed to keeping you informed about these changes and how they might affect your real estate transactions. Stay tuned for more updates as we continue to navigate these evolving industry standards.

For more detailed coverage, you can read the full article by Dave Gallagher on Real Estate News.

If you have any questions or need assistance with your real estate needs, don’t hesitate to reach out to us at Realty Net LLC.

Source: Gallagher, D. (2024, May 21). NAR continues its battle to keep DOJ case closed. Real Estate News.