Consumers also have the right to seek damages for overpayment caused by these anti-competitive agreements. Keep exploring different platforms, ask questions, and don’t be afraid to negotiate with property managers. The housing market is always evolving, and this lawsuit is just one piece of a much larger puzzle. Judge Thomas Zilly, who oversaw the case, dismissed REX’s antitrust claims against NAR and Zillow. But he allowed the discount brokerage’s false advertising claim under the Lanham Act, along with a claim for unfair or deceptive trade practices under the state of Washington’s Consumer Protection Act, to stand. The success of the case, and the additional scrutiny of how real estate agents are paid, …
Antitrust Issues Shake Up Online Rental Market
- Over the years, lower-cost brokers and unique business models have entered most real-estate brokerage markets to challenge the traditional full-service brokerage model.
- Understanding the antitrust responsibilities of each stakeholder is paramount for maintaining a fair and competitive market.
- In real estate, bid rigging might occur during property auctions or development projects.
- The spokesperson noted that “two separate courts ruled against similar challenges and we will similarly respond to these allegations in Court,” referring to the Texas and Pennsylvania cases ruled on in July.
- The FTC’s goal is to restore that balance, potentially by unwinding the deal or requiring structural changes to ensure fair competition.
All information contained in any transmission is confidential and Hagens Berman agrees to protect information against unauthorized use, publication or disclosure. NAR has now launched the Pro-Property Platform, a system designed to strengthen federal political advocacy by allowing direct-to-candidate contributions to be tagged as pro-housing and pro-property rights. Legal Column author John Dolgetta, Esq. is the principal of the law firm of Dolgetta Law, PLLC.
Prohibited Practices in Real Estate Transactions
If buyers don’t have to pay the commission fee, they can spend more money on their home. In this vein, broker-assisted sales also allow first-time homebuyers with potentially less liquid assets to afford representation. NAR also argued that commission percentages are not a fixed amount and can always be negotiated. “I’m honored to join Compass, a company committed to empowering agents and ensuring homeowners retain control over how their properties are marketed,” said Glass. “This is a pivotal moment for the real estate industry, and I am excited to provide my expertise to a company that is so clearly aligned with supporting both its agents and the homeowners they serve.” “At Compass, we firmly believe agents should not be fined by MLSs or banned by Zillow for marketing listings off their platforms and that no agent should be told by an MLS or Zillow how they must work with their clients,” said Compass Founder and CEO Robert Reffkin.
Redfin reports that it expects to pay the amount within 30 days of the court’s preliminary approval. The settlement will bring the total aggregate settlements reached in the lawsuit to $980.9 million. Hagens Berman believes that home sellers have been cheated in real estate broker commissions, and the lawsuit seeks to recover overcharges. When entities arrange together to rig prices, or control a market, consumers always lose, and we’re here to challenge this illegal price-fixing. A discount broker might put a house on the market for a client, but two existing brokers, who agreed not to do business with that discount broker, collectively refuse to show the house to their buyer clients, even though the house might be suitable and appropriately priced. Beyond government resources, real estate professionals can also rely on ethical codes and guidance from professional organizations to ensure compliance with antitrust laws.
- The NAR requires that realtors join the association in order for homes they are selling to appear on an MLS.
- Payout amounts will vary based on the number of valid claims received and other settlement factors.
- The online rental market has become a cornerstone of modern housing searches, with millions of Americans relying on digital platforms to discover their next apartment.
- In the meantime, home sellers may wish to use some extra caution when choosing a real estate agent.
- It’s a bold move by the FTC, and one that’s sparking conversations about fairness in the housing market.
Real Estate Associations (e.g., NAR): Shaping Industry Standards and Ethics
The REALTOR® Code of Ethics, in particular, provides a comprehensive framework for ethical conduct in the industry. In conclusion, each participant in the real estate industry plays a vital role in maintaining a fair and competitive market. By understanding their antitrust responsibilities and actively promoting compliance, industry participants can contribute to a thriving and equitable real estate sector. Furthermore, we will analyze common scenarios that can give rise to antitrust concerns, providing practical examples and case studies.
FTC weighs in on antitrust allegations leveled against CoStar
You can learn more about the federal antitrust laws we enforce by visiting The Antitrust Laws page of this website. Multiple Listing Services (MLS) play a vital role in disseminating property information to real estate professionals and, indirectly, to the public. However, restrictions on who can access and list properties on the MLS can raise antitrust concerns.
Antitrust Laws & Definitions
Receive original business news about real estate and the REALTORS® who serve the lower Hudson Valley, delivered straight to your inbox. You can report mergers or other activity that you suspect harms competition through this online reporting portal. Department of Justice is the federal agency tasked with promoting economic competition in the United States.
The real estate industry, a cornerstone of economic activity, operates within a complex legal framework designed to ensure fair competition. Antitrust laws, at their core, are the guardians of this competitive landscape. They prevent monopolies, cartels, and other anti-competitive behaviors that can stifle innovation and harm consumers. The recent lawsuit settlement against the National Association of Realtors (NAR), as well as numerous major real estate companies, centers on allegations of antitrust violations related to how commission fees are structured.
Alena Botros is a former reporter at Fortune, where she primarily covered real estate. The spokesperson noted that “two separate courts ruled against similar challenges and we will similarly respond to these allegations in Court,” referring to the Texas and Pennsylvania cases ruled on in July. Hagens Berman purchases advertisements on search engines, social media sites and other websites. Transmission of the information contained or available through this website is not intended to create, and receipt does not constitute, an attorney-client relationship. If you seek legal advice or representation by Hagens Berman, you must first enter a formal agreement.
Brokers should not agree to stay away from each other’s clients or former clients. Poaching may seem impolite, but agreeing not to do it can violate the antitrust laws. The U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) are the primary enforcers of antitrust laws in the antitrust violation real estate United States. Their websites offer a wealth of information, including guidance documents, case summaries, and insights into enforcement priorities. Another area of concern involves agreements among competitors to divide territories.
By understanding and adhering to antitrust regulations, stakeholders can help foster a thriving real estate sector that benefits both industry participants and consumers alike. Still, although they’ve reached a preliminary agreement to settle, the courts hearing the cases must approve the agreement. Attorneys for the plaintiffs in the Moehrl lawsuit told Inman (a news source for real estate agents, brokers, and executives) and HousingWire that the agreement for both lawsuits was a total of $83.5 million and were negotiated together. That figure does not appear in the notice filed with the court and was not confirmed to Fortune.
These consequences deter anti-competitive behavior, including fines, imprisonment, and civil liabilities. Group boycotts occur when competitors agree not to deal with a specific competitor, supplier, or customer to disadvantage them. An example is agents agreeing not to cooperate with a discount broker or an association excluding a competitor from its multiple listing service (MLS). These practices harm competition and consumers, and understanding them helps ensure compliance and promotes a fair market. Brokers should not agree to divide territories (and this is not limited to written agreements). So if there are two major brokerage firms in a smaller town divided by a river, they should not decide between them that one will take properties north of the river, while the other stays to the south.
This practice limits consumer choice and can force clients into less favorable terms for the tied service. Market allocation involves competitors agreeing to divide territories, customers, or property types. For example, two brokerage firms might agree that one will only operate in the northern part of a town, while the other handles the southern part. For any policies that could affect rivals or competition (e.g., listing timing, data-standard requirements), record the consumer benefits, such as accuracy, fraud prevention, interoperability, safety, and always consider less-restrictive alternatives.
“Bringing Ethan Glass on board as our Chief Legal Officer reflects our unwavering commitment to seller choice and challenging these restrictive practices that limit when, where, and how homeowners can market their homes.” If their access policies discriminate against certain brokers or individuals, they might invite antitrust scrutiny. The trials and tribulations of MLS policies and challenges are beyond the scope of this post, but anyone involved in running or organizing an MLS should seek antitrust counsel because it is very easy to cross the line into anticompetitive territory. From active real estate and broker associations to collectively-run multiple-listing services, real-estate professionals, despite competing on a daily basis, work together all the time. This is how the Music Teachers National Association (MTNA) found themselves in hot water with the FTC.
U.S. homeowners could receive part of a $208.5 million settlement stemming from a major antitrust lawsuit that targeted several major real estate brokerages. Explore how antitrust laws ensure fair competition and prevent market manipulation within the real estate industry. You can read our article about how the antitrust laws do not allow real estate brokers to fix or set prices or commissions.