Lawsuit Against NAR Attacking Prohibition of Pocket Listings Revived

The National Association of Realtors (NAR) is under fire once again.

Disgruntled real estate agents have successfully revived a previously dismissed lawsuit, in which they allege that NAR’s policy against pocket listings is anti-competitive and violates antitrust laws, Inman reported.

The private listing service Top Agent Network (TAN)’s suit challenges NAR’s and the San Francisco Association of Realtors’ Clear Cooperation Policy, which requires brokers to post listings to the MLS within one business day of marketing it to the public.

The policy effectively prohibits pocket listings where agents will hold on to a listing for weeks or days, privately marketing it without making it known to other agents through the MLS. The trade group has indicated it may be open to repealing the policy, according to Inman.

If the matter remains unresolved, TAN’s chief executive David Faudman told Inman that the group “looks forward to proving at trial that the CCP is anti-competitive and greatly limits sellers’ choice in how best to market their homes.”

The groups have had ongoing litigation since 2020 when TAN commenced the lawsuit. The court revived the claim after subsequent appeals finding that TAN demonstrated sufficient injury from the policy’s anticompetitive effects, Inman reported.

The court found that the anti-pocket listing policy effectively restricts TAN’s supply of listings. The court said the claim was similar enough to other claims brought against NAR alleging that pocket listings are a MLS conspiracy.

The court only revived the anticompetition portion of TAN’s claims. The prior complaint, alleging intentional interference with the contract, remains dismissed. The remaining part of the lawsuit will continue with the usual litigation process, with a court event scheduled for late August, according to Inman.

The NAR has been mired in turmoil in recent months, leading to the departure of two consecutive presidents, a CEO and other staff members since August. This past spring, the realtor group was found guilty in a landmark verdict over commission-sharing standards in the industry. The association agreed to pay $418 million to settle antitrust lawsuits over broker commissions. Last month, a former NAR employee accused the association of retaliation and cyberstalking.

— Christina Previte