November 25, 2024
The U.S. Department of Justice warned the National Association of Realtors that changes to broker commission rules agreed to in a settlement with home sellers does not shield the industry from government antitrust scrutiny.
The DOJ filed a statement of interest on Sunday in Missouri federal court ahead of a fairness hearing scheduled Tuesday for a settlement over NAR rules that required agents listing homes to offer compensation to brokers that work for the buyers on a sale.
NAR and several large brokerages have agreed to pay around $1 billion and to make a number of changes over claims that the rules have inflated broker commissions.
The DOJ’s statement noted that it has an ongoing antitrust investigation into NAR’s rules and said the settlement with home sellers should not be used as “a shield against a future enforcement action by the United States.”
“For this reason, the United States respectfully requests that if the court approves the settlement, it should clarify that such approval does not address whether the proposed settlement prevents and restrains current antitrust violations, remedies past violations, or contains revised policies and practices that comply with the antitrust laws,” the statement said.
Enforcers said they take no position on most aspects of the settlement but are concerned about new requirements for brokers to obtain a written agreement from prospective buyers before showing a home.
The DOJ said the new provision limits how brokers compete for clients and bears a close resemblance to prior restrictions among competitors that courts have found violate the antitrust laws, including a case involving an agreement that prohibited certain information from being distributed through a multiple listing service, or MLS.
Other changes being made as a result of the settlement would bar Realtors from including the commission a buyer’s broker would be paid on an MLS, though the DOJ said brokers would still be able to publicly post the commission offers elsewhere.
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The home sellers are represented by Cohen Milstein Sellers & Toll PLLC, Susman Godfrey LLP, Hagens Berman Sobol Shapiro LLP, Boulware Law LLC, Ketchmark & McCreight PC and Williams Dirks Dameron LLC.
Read DOJ Says Realtor Commissions Deal Is No Antitrust Shield.