NAR Issues Fact Sheet for Proposed Class Action Settlement to Resolve Broker Commission Claims

In the wake of filing a notice of pending settlement of a class action lawsuit that alleged collusion to inflate broker commission rates in violation of federal antitrust law, the National Association of Realtors (NAR) published a fact sheet to explain the proposed settlement.  NAR had previously appealed a $1.78 billion jury verdict.

NAR asserted that under the terms of the settlement agreement, it would pay approximately $418 million over four years.  The settlement would release over one million NAR members.  Brokerage entities owned by members that had a residential transaction volume of $2 billion or below would be included in the release, but larger entities would not be covered by the proposed settlement.  NAR and other state and local associations of realtors would also be released, as well as association-owned MLSs.  Other MLSs could choose to opt into the settlement by paying a per-subscriber fee to the settlement fund.

NAR would also institute a new rule that prohibits offers of compensation on the MLS.  NAR emphasized that the new rule does not prohibit offers of compensation that are made off the MLS.  For buyer brokers, the types of compensation that would continue could take multiple forms, including fixed-fee commissions paid by consumers; concessions from sellers; and a portion of the listing broker’s compensation.  The compensation would continue to be negotiable between agents and consumers.  In addition, under the terms of the settlement, sellers could communicate seller concessions via the MLS, if the concessions are not conditioned on payment to a buyer broker.

The proposed settlement agreement has not yet been filed for court approval, which is necessary under the terms of the settlement.  If the settlement is approved, it will go into effect in mid-July, 2024.