A federal judge has denied a motion to dismiss a lawsuit over broker commissions on residential real estate deals.
A U.S. District Court judge threw out motions from the National Association of Realtors and some of the nation’s largest brokerages to dismiss the lawsuit, Inman reported. The judge ruled that the plaintiffs’ allegations show that they would have paid lower commissions if the current broker rules had not been in place, and that the rules established by NAR created an artificially high commission rate.
The lawsuit was originally filed in 2019 by a property seller, and is now seeking class action status. The complaint alleges that the sharing of commissions between the listing and buyer brokers leads to higher seller costs and violates the Sherman Antitrust Act.
NAR argued in its motion that the lawsuit misportrayed the rules for multiple listing services, and that the plaintiffs failed to show they suffered an “antitrust injury,” according to Inman.
But the judge who dismissed the motion disagreed, and wrote in his ruling that, “But-for Defendants’ conspiracy, each plaintiff would have paid substantially lower commissions.”
“As the case moves forward, we intend to demonstrate how the MLS system creates competitive, efficient markets that benefit home buyers and sellers as well as small business brokerages,” a NAR spokesperson told Inman.
The other defendants in the lawsuit are HomeServices of America, Keller Williams, RE/MAX, Realogy, Long & Foster Companies HSF Affiliates. Those firms backed NAR’s motion to dismiss the suit, and those requests were also dismissed by the judge.
[Inman] — Keith Larsen