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Lawsuits Threatening Agent Commissions:
Moehrl v. NAR

By June 2, 2022December 26th, 2023No Comments

By Jordan Grice | RISMedia

The past couple of weeks have been filled with headlines of courtroom battles aimed at the National Association of REALTORS® (NAR) and several prominent real estate companies across the U.S.

From alleged anti-competitive practices to buyers and sellers taking issue with longstanding commission structure policies, one could argue that the industry faces an existential crisis that could yield potentially disastrous consequences.

It may be challenging to keep track of the most impactful lawsuits, so to save time, here are a few of the top court cases carrying significant implications.

Moehrl v. The National Association of REALTORS

Arguably one of the most prominent lawsuits against NAR, the Moehrl case has helped kickstart a list of lawsuits targeting NAR’s Buyer Broker Commission Rule — also known as the Participation Rule.

The lawsuit claims that NAR conspired with four major franchisors to inflate commissions through its MLS policy. Experts and industry pundits have speculated that this lawsuit could harm the real estate commission structure as the legal battle continues to brew.

As the case persists, a recent court order filed on May 11 opened the door for plaintiffs in this case to use briefs and exhibits submitted in the Sitzer/Burnett v. National Association of REALTORS® case, which was recently made into a class action lawsuit.

What we know

  • The case was filed in March 2019 by Christopher Moehrl on behalf of himself and home sellers who paid a broker commission since March 6, 2015 and listed on one of 20 MLSs.
  • The lawsuit also names Realogy, HomeServices of America, Keller Williams and RE/MAX as defendants.
  • The lawsuit challenges the Buyer Broker Commission Rule—also known as the Participation Rule, alleging it’s anti-competitive.
  • The rule requires all brokers to make a blanket, non-negotiable offer of buyer broker compensation when listing a property on a Multiple Listing Service (MLS).
  • The case is currently in the “discovery and briefing” phase, as both sides gather testimony and evidence to support their claims.
  • Plaintiffs are currently seeking a class certification—class action lawsuit designation.
  • MLSs named in the case are:
    • The Bright MLS (including the metropolitan areas of Baltimore, Maryland; Philadelphia, Pennsylvania; Richmond, Virginia; Washington, D.C.)
    • My Florida Regional MLS (including the metropolitan areas of Tampa, Orlando and Sarasota)
    • Five MLSs in the Midwest covering Cleveland, Ohio; Columbus, Ohio; Detroit, Michigan; Milwaukee, Wisconsin; Minneapolis, Minnesota
    • Six MLSs in the Southwest covering Austin, Texas; Dallas, Texas; Houston, Texas; Las Vegas, Nevada; Phoenix, Arizona; San Antonio, Texas
    • Three MLSs in the Mountain West that cover Colorado Springs, Colorado; Denver, Colorado; Salt Lake City, Utah
    • Four MLSs in the Southeast that cover Fort Myers, Florida; Miami, Florida; Charlotte, North Carolina; and Raleigh, North Carolina
  • Aside from damages, the plaintiffs seek “a permanent injunction” stopping NAR from requiring “sellers to pay the buyer broker and from continuing to restrict competition among buyer brokers.”

What’s at stake?

“Listing brokers making offers of compensation to buyer brokers gives first-time, minority and low/middle-income homebuyers a better shot at affording a home and professional representation,” said NAR President Leslie Rouda Smith.

“If buyers were forced to pay their brokers directly out of pocket, they would have to come up with significant amounts of additional cash at closing, which would inevitably make first-time homeownership more difficult. Paying out of pocket would also increase the racial and economic disparities in homeownership that currently exist due to systemic differences in family income and wealth.”

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