Federal Court: DOJ Must Uphold Settlement with NAR

The decision ends a Department of Justice inquiry into the association’s Clear Cooperation Policy and participation rule.

On Wednesday, a federal judge granted the National Association of REALTORS®’ petition to end a Department of Justice inquiry into the association’s Clear Cooperation Policy and participation rule. NAR filed the petition in September 2021 after the Department of Justice announced it was backing out of a November 2020 settlement agreement.

That settlement agreement emphasized and furthered NAR’s longstanding pro-consumer guidance. Even while the court was considering the petition, NAR moved forward with the terms of the settlement, clarifying its policies to further what was already their spirit and intent.

For example, NAR provided increased transparency for consumers by enabling brokerages to make offers of compensation public on their websites. In addition, Code of Ethics Standard of Practice 12-1 was amended in January 2022 to state: “REALTORS® must not represent that their brokerage services to a client or customer are free or available at no cost to their clients, unless the REALTOR® will receive no financial compensation from any source for those services.”

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The victory Wednesday “does not preclude the DOJ from investigating NAR in the future, and the DOJ has the option to appeal this decision if desired,” says NAR General Counsel Katie Johnson, “but this is a clear victory. NAR is delighted the DOJ is now bound to honor its agreement.”

NAR continues to defend against class-action lawsuits challenging the U.S. model of broker compensation. The lawsuits falsely assert that sellers do not have any ability to negotiate, though NAR guidance is clear: Compensation is always negotiable.

“As part of our commitment to act in the best interests of home buyers and sellers across this country,” Johnson says, “NAR remains dedicated to advancing independent, local real estate marketplaces that provide for greater economic opportunity and equity for small businesses and consumers of all backgrounds and financial means.”