The beleaguered National Association of Realtors (NAR) in the US, has been hit with another lawsuit, only this time its real estate agents challenging its rules.
The lawsuit comes as the organisation is getting ready to finalise its landmark US$418 million commissions settlement, which is moving toward final approval in November.
According to realestatenews.com, three real estate professionals in Southeastern Michigan — Douglas Hardy, Glenn Champion and Dylan Tent – have made allegations of ‘economic coercion and conspiracy’, due to the fact that agents need to be members of three organisations in order to access the Multiple Listing Service (MLS).
In Michigan, agents are required to be a member of the NAR, the state association (Michigan Realtors) and one of the local associations in order to use the MLS.
The trio decided to file the suit after NAR came to a proposed settlement in multiple antitrust lawsuits, whose rule changes the professionals say will harm agents, brokers and consumers.
The suit, filed in the U.S. District Court for the Eastern District of Michigan, names NAR, the Michigan Association of Realtors, the Grosse Pointe Board of Realtors, the Greater Metropolitan Association of Realtors, the North Oakland County Board of Realtors, and Michigan’s largest MLS, Realcomp II, as defendants, according to Inman.
The suit alleges civil conspiracy, economic coercion and unfair restraint of trade in violation of the federal Sherman Antitrust Act and the Michigan Antitrust Reform Act.
“Defendants mandate membership in their organisations in order to essentially hold hostage access to the MLS only allowing those entities and persons who pay membership fees access to same,” the complaint said.
“In order to perpetuate the above scheme and continue to mandate the class members to comply with their membership requirements, Defendants use their overwhelming economic power and market dominance to coerce Plaintiffs.
“Defendants further wield their economic power and market dominance in a coercive manner by unilaterally refusing Plaintiffs such as the Sotheby Entities from opting out of membership.
“Defendants’ extortionate conduct is made more effective by, and enforced through, their conspiracy.”
The case also targets RealComp, which provides the MLS software and regulates members’ use of the MLS.
The plaintiffs said the membership rule “is akin to mandating membership in a union or other trade organisation depriving members of free choice”.
They alleged that it is “essentially a violation of the Anti-Trust laws, Economic Coercion, Unfair Restraint on Trade and Conspiracy”.
A NAR spokesperson told Inman that the organisation stands by the pro-competitive, pro-consumer local broker marketplaces, which local associations may choose to provide as a member benefit.
“Furthermore, NAR stands by the practice changes required by the proposed settlement because they bring buyers and sellers greater transparency on compensation and protect consumer choice,” NAR told Inman.
“NAR will defend against these baseless claims in court.”
The complaint asks for a jury trial, damages, and attorney costs and fees.
