The Anti-Trust Climate in Real Estate LEGAL COUNSEL
SCOTT PETERSON General Counsel of the Colorado Association of REALTORS®
Colorado REALTORS® are probably tired of hearing me talk to them about the various anti-trust matters swirling around our industry over the last few years. Trust me, I get it. As an education topic, “anti-trust” is about as scintillating to most people as a 4-hour discussion on “aglets” (Google it!). That said, I believe the various implications of the anti-trust matters involving the real estate & MLS industries have the potential to have a very profound impact on the way our industry compensates REALTORS® representing buyers. Most of you are probably aware by now that there are three independent class action lawsuits that are pending in two different federal courts. Two of these lawsuits have been initiated on behalf of sellers and the other is being initiated on behalf of buyers. In all cases, the respondents to the lawsuit include the National Association of REALTORS® (“NAR”) and some of the largest real estate brokerage franchisors in the United States. The gist of the allegations are that the MLS policy mandating an offer of compensation to a cooperating (buyer) broker has served to artificially i nflate co mmissions to th e harm of both buyers and sellers. Each of these lawsuits is based in a theory of anti-trust. Also looming is a United States Department of Justice (“DOJ”) investigation of NAR and MLS policies around cooperating compensation. This investigation, which was initiated in early 2019, was ostensibly resolved by a joint settlement agreement between NAR and the DOJ in November 2020. Unfortunately, prior to that agreement being finalized, the Executive Branch of the US government made some of its own. In connection to the change in presidential administrations, the DOJ was placed under the stewardship of a new US Attorney General (Merrick Garland) in March 2021. On July 1, 2021, the DOJ formally withdrew from the settlement that had been previously negotiated in good faith by the former administration. The impact of the DOJ’s withdrawal from the agreement is uncertain as they have indicated they will initiate a new, broader investigation of NAR’s MLS policies. In other words, stay tuned. I know that it is easy to consider the implications that any MLS policy changes may have on REALTOR® commissions. As individual REALTORS®, brokerages, and local/state/national business trade associations, we are right to consider the implications on our industry. Equally important, however, is the implications these anti-trust matters may have on consumers, home values, buyer agency/advocacy, and barriers to entry in the housing market. NAR President Charlie Oppler’s July 19, 2021 excellent article “Misguided DOJ Efforts Could Derail What a Pro-Consumer Real Estate Market Bolsters” follows on the next page. He does an outstanding job of establishing the full potential of the impact of the DOJ’s withdrawal from the settlement agreement. I would encourage Colorado REALTORS® to read President Oppler’s article and focus on the proconsumer elements to the MLS system and compensation structures.
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