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LEGAL UPDATE: WHAT YOU NEED TO KNOW ABOUT ANTITRUST LAW – NOW!

LEGAL UPDATE: Jury Verdict in the Antitrust Class Action Sitzer/Burnett v. NAR, et al.
LEGAL UPDATE: Jury Verdict in the Antitrust Class Action Sitzer/Burnett v. NAR, et al.

UPDATE ON THE JURY VERDICT IN THE ANTITRUST CLASS ACTION, SITZER/BURNETT V. NAR, ET AL.

Posted November 2, 2023

Updated November 9, 2023

 

MESSAGE FROM MIAMI REALTORS®:

As you know, on October 31, 2023, in the Sitzer/Burnett v. NAR, et al. class action case, the jury awarded the plaintiffs $1.785 billion in damages (which could be $5.356 billion after treble damages are assessed). To be clear – MIAMI REALTORS® was not a defendant in that court case.

We understand that this has sent shockwaves through the real estate industry. While there is much we still do not know, including what will be in the final judgment against NAR, it is important to remember that as of right now, we are still status quo. MIAMI REALTORS® has existed for over 100 years, and we will continue to move forward in the face of challenges, as we have always done.

This page is to update you on next steps and resources available to you. As always, make sure you are following our LEGAL UPDATES page and our new ANTITRUST RESOURCE PAGE to stay on top of this – and all other legal developments in the industry.

Questions? Reach out to legal@miamire.com.

EDUCATION:

Makes sure that you have the education you need to adapt to what may come of this lawsuit, and any other pending legal matters. Sign up for classes on buyer broker agreements, get your ABR designation, and stay tuned for more content coming soon.

BEST PRACTICES AND WHAT YOU CAN DO NOW:

  • ALWAYS MAKE ALL BUSINESS DECISIONS UNILATERALLY AND INDEPENDENTLY!
  • Join MIAMI REALTORS® in committing to antitrust compliance – implement an antitrust policy, review your handbooks and brokerage materials, and train your teams. MIAMI REALTORS®’ Antitrust Policy is HERE.
  • Refuse to participate in any discussions or agreements that violate antitrust laws, including discussions of commissions with competitors.
  • Instead, focus on advancing the interest of real estate professionals and consumers of real estate services, increasing competition, reducing risk for all parties involved in real estate transactions, and sharing insights on best practices.
  • Use buyer representation agreements, which maximize transparency by putting all agreements in writing to ensure clarity and understanding, as all members are obligated to do pursuant to the NAR Code of Ethics. These agreements formalize the professional working relationship with customers and detail what services consumers are entitled to and what the buyer agent expects from their customer in return.
  • Do not ever use any technology or manual methods to sort listings by offers of compensation.
  • Make sure your customers know that commissions are not set by law, are fully negotiable and set between brokers and their customers, and that you have ethical obligations under the NAR Code of Ethics (Article 16).
  • Regularly monitor social media. Remove yourself from discussions or comments that disparage competitors or comment on their business practices (including, but not limited to business models, commissions, policies, etc.). Remove comments and posts that might violate antitrust laws. Train your teams on proper social media usage.
  • DISCUSSION OF THESE TOPICS IS ALWAYS PROHIBITED: fixing prices or commissions; limiting products or service offerings; allocating geographic territory or customers; steering; and, refusing to deal.

 FREQUENTLY ASKED QUESTIONS:

  • What is the Sitzer/Burnett v. NAR, et al. case?

 As you know, on October 31, 2023, in the Sitzer/Burnett v. NAR, et al. class action case, the jury awarded the plaintiffs $1.785 billion in damages (which could be $5.356 billion after treble damages are assessed) and found the defendants liable for violations of antitrust laws, including the NATIONAL ASSOCIATION OF REALTORS®. To be clear – MIAMI REALTORS® was not a defendant in that court case. To be clear – MIAMI REALTORS® was not a defendant in that court case.

We understand that this has sent shockwaves through the real estate industry. While there is much we still do not know, including what will be in the final judgment against NAR, it is important to remember that as of right now, we are still status quo. MIAMI REALTORS® has existed for over 100 years, and we will continue to move forward in the face of challenges, as we have always done.

On that note, this email is to update you on next steps and resources available to you. As always, make sure you are following our LEGAL UPDATES page and our new ANTITRUST RESOURCE PAGE to stay on top of this – and all other legal developments in the industry.

  • Will NAR appeal the jury verdict in Sitzer/Burnett v. NAR, et al.?

NAR has stated that it plans to appeal the jury’s verdict. In the meantime, NAR will likely ask the court to reduce the damages awarded by the jury.

  • How long will it be before the outcome of the litigation in Sitzer/Burnett v. NAR, et al. is final?

If NAR and their co-defendants appeal, the appellate process could take years to resolve. That said, do not delay in educating yourself and ensuring that you are in full compliance with federal and state antitrust laws.

  • What is happening with the settlements with Anywhere and RE/MAX in the Sitzer/Burnett v. NAR, et al. and Moehrl v. NAR, et al. cases?

Anywhere and RE/MAX, corporate defendants in both cases, are settling, subject to court approval. On November 20, 2023, the court granted the motion for preliminary approval of the settlements. The proposed settlements would include changes to the brokerages’ respective business practices and payments to the plaintiffs. To be clear, MIAMI REALTORS® is not a party to those lawsuits, nor is MIAMI REALTORS® required to comply with the settlement terms of those brokerages.

  • When is the Moehrl v. NAR, et al. case going to trial?

We are waiting to hear when this case is set for jury trial in 2024. To be clear, MIAMI REALTORS® is not a party to this lawsuit. This is another class action case pending in federal court, in Illinois, where the plaintiffs are raising questions about how commissions are paid (brokers representing sellers often paying the commissions of brokers representing home buyers).

  • Will more lawsuits be filed?

They attorneys representing the plaintiffs in the Sitzer/Burnett v. NAR, et al. case filed another lawsuit, just minutes after the verdict. The new case is against seven defendants, including NAR. The Moehrl class action case, which makes similar allegations to the ones in Sizter/Burnett, is still pending in federal court in Illinois. Many other copycat lawsuits have already been filed. Each case will be tried separately. We cannot predict if (and if so, how many) other lawsuits will be filed.

  • Will there be changes to the MIAMI MLS Rules?

On November 9, 2023, MIAMI MLS made changes to the MLS Rules to reinforce Participants/Subscribers’ ability to engage in transparent negotiations with customers and prospective buyers by allowing Participants/Subscribers to enter ANY amount in a listing’s cooperative compensation fields, from $0 and up. The full MIAMI MLS update on the rule change is HERE and the most current version of the MIAMI MLS Rules is here. 

  • What is NAR’s “Participation Rule,” and has anything changed with the MIAMI MLS?

Previously, NAR required MLS Participants/Subscribers to offer compensation to cooperating brokers (which could be as little as one cent). As announced recently, NAR updated its interpretation of the “Participation Rule.” MLS Participants/Subscribers are required to communicate an offer of compensation to other MLS Participants/Subscribers, and that offer can be any amount, including $0. NAR is not requiring or encouraging MLSs to change their data fields to permit $0. But they are advising that doing so would comply with NAR’s MLS policy. Each MLS throughout the country unilaterally and independently makes their own business decisions, including this one.

On November 9, 2023, MIAMI MLS made changes to the MLS Rules to reinforce Participants/Subscribers’ ability to engage in transparent negotiations with customers and prospective buyers by allowing Participants/Subscribers to enter ANY amount in a listing’s cooperative compensation fields, from $0 and up. The full MIAMI MLS update on the rule change is HERE and the most current version of the MIAMI MLS Rules is here. 

  • Do MLS Participants/Subscribers in the MIAMI MLS need to enter buyer agency compensation? Or can they leave the field blank?

MIAMI MLS Rules currently require that the listing broker make a blanket unilateral contractual offer of compensation to the other MLS broker participants for their services in selling the property when entering that property into the MLS. Each listing must include entry of a value of $0 or greater in the MIAMI MLS compensation fields. Remember, commissions are always negotiable. MIAMI REALTORS® does not mandate the amount of compensation that a broker offers, nor does MIAMI REALTORS® set or suggest compensation values or the cooperative division of compensation.

  • Can listing agents offer a penny, or $1, for cooperative compensation?

Neither MIAMI REALTORS® nor the MIAMI MLS mandates the amount of compensation that a broker offers, only that they offer something – which can be as little as zero dollars – and that the offer be stated clearly and in accordance with the MIAMI MLS Rules. Neither MIAMI REALTORS® or MIAMI MLS sets or suggests compensation values or the cooperative division of compensation.

  • Why do antitrust issues matter in real estate?

In recent years, the real estate industry has seen a wide range of antitrust cases – brought by the Department of Justice, sellers, and buyers alike. Who are they suing? The NATIONAL ASSOCIATION OF REALTORS®, brokerages, and multiple listing services. There are serious consequences for violating antitrust laws, which are designed to ensure pro-consumer, pro-competitive marketplaces that facilitate the sale of real estate. Those consequences include civil and criminal penalties, treble damages, attorneys’ fees and costs, lawsuits, and other private and government enforcement. MIAMI REALTORS® is committed to conducting all business affairs in a professional, ethical, and lawful manner, including adherence to all antitrust laws, and we want to provide our members with the tools to make sure they are doing the same.

  • Is MIAMI hosting classes about all of these issues?

Yes! Register for upcoming classes and check back regularly for new programming.

  • What are the education courses is MIAMI offering?

Register for upcoming classes and check back regularly for new programming. These are the two programs you do not want to miss: “Understanding Buyer Broker Agreements and How to Implement Them” (3 CE) and the Accredited Buyer’s Representative(ABR®) designation course.

  • What if I have legal questions about complying with antitrust laws?

Call the Florida Realtors® Legal Hotline (407-438-1409) and/or consult with legal counsel. Remember, all business decisions must always be made unilaterally and independently.

MIAMI REALTORS®’ ANTITRUST POLICY:

MIAMI REALTORS®, a not-for-profit trade association, is the voice for real estate, influencing and shaping the industry, and is devoted to being the business and public policy advocate for REALTORS®. MIAMI meetings and events often include real estate professionals and other industry stakeholders who compete with each other or work for competing businesses. MIAMI is committed to conducting all meetings and events in a professional, ethical, and lawful manner, including adherence to all antitrust laws. This ensures pro-consumer, pro-competitive marketplaces that facilitate the sale of real estate. To that end, the topics of this event or meeting will focus on advancing the interests real estate professionals and consumers of real estate services, increasing competition, reducing risk for all parties involved in real estate transactions, and sharing insights on business best practices. The following discussion topics are always prohibited: agreements to fix prices, limiting product or service offerings, allocating geographical territory or customers, and refusing to deal. Any discussion inconsistent with this policy will not be tolerated.

DISCLAIMER

The information in this program, and corresponding materials, is provided for educational and informational purposes only, and should not be construed as legal advice or as an offer to perform legal services on any subject matter. The content contains general information and may not reflect current legal developments or information. The information is not guaranteed to be correct, complete, current, or suitable. MIAMI Association of REALTORS® (“MIAMI REALTORS®”) makes no warranty, expressed or implied, about the accuracy or reliability of the information in this program or materials. The materials may contain technical or typographical errors. MIAMI REALTORS® does not guarantee their accuracy, completeness, or suitability. Recipients of the information in this program or materials should not act or refrain from acting on the basis of any information without seeking appropriate legal advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state. MIAMI REALTORS® expressly disclaims all liability with respect to actions taken or not taken by the recipient based on any or all of the information in this program and materials. Communications with or from MIAMI REALTORS® or do not constitute or create an attorney-client relationship between any recipients. Nothing herein is intended to create an attorney-client relationship and shall not be construed as legal advice. IN NO EVENT SHALL MIAMI REALTORS® BE LIABLE FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES RELATING TO THESE MATERIALS OR FOR ANY USE OF OR RELIANCE ON THESE MATERIALS.


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