Class Action Settlement
On March 15, 2024, NAR reached a proposed settlement agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions. The agreement would resolve claims against NAR, over one million NAR members1, all state/territorial and local REALTOR® associations, all association-owned MLSs2, and brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below.
The proposed settlement, which is subject to final court approval (a decision which we expect later this year), makes clear that NAR continues to deny any wrongdoing in connection with the Multiple Listing Service cooperative compensation model rule that was introduced in the 1990s in response to calls from consumer protection advocates for buyer representation.
Under the terms of the agreement, NAR will implement several practices changes, to be effective on August 17, 2024, including but not limited to: (1) removing offers of cooperative compensation from the MLS; and (2) requiring an MLS Participant working with a buyer to obtain a written agreement prior to touring a home listed on the MLS. In addition, if approved, NAR will pay $418 million over approximately four years.
1NAR's release covers all members except: (1) independent contractors or employees of Home Services of America or one of its affiliates; and (2) employees of these remaining corporate defendants in the Gibson/Umpa cases: Douglas Elliman, Inc.; Douglas Elliman Realty, LLC; eXp Realty, LLC; eXp World Holdings, Inc.; Hanna Holdings, Inc.; HomeSmart International, LLC; Howard Hanna Real Estate Services; Redfin Corporation; United Real Estate; or Weichert, Realtors®. HomeServices of America announced its own settlement on April 26, 2024.
2Association-owned MLSs must opt in to the settlement by June 18, 2024 by submitting Appendix Bpdf.