NAR ANNOUNCES PROPOSED SETTLEMENT IN SITZER/BURNETT AND MOEHRL ANTITRUST CASES
Posted March 15, 2024
Updated March 21, 2024
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. Another similar antitrust class action case, Moehrl v. NAR, et al., was scheduled to go to trial later this year. To be clear – MIAMI REALTORS® was not a defendant in either of those court cases. On March 15, 2024, NAR announced a proposed settlement in the Sitzer/Burnett and Moehrl cases that would end litigation of many claims brought by home sellers related to broker commissions This is a nationwide release for all sellers and should resolve much of the litigation.
This page is to provide you with a summary of the proposed settlement 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.
For the past 104 years, MIAMI REALTORS® and the real estate industry have seen tremendous change. Together, we will continue to move forward through the changes, as we have always done, to continue serving over 62,000 members and the consumers in South Florida, nationally, and across the world.
Questions? Reach out to legal@miamire.com.
WHAT IS IN THE PROPOSED SETTLEMENT:
- RELEASE OF LIABILITY. Most (not all) members, all state/local REALTOR® associations, all association-owned MLSs, and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or less would be released from liability in Sitzer/Burnett and Moehrl Read the entire proposed settlement agreement HERE.
- COMPENSATION OFFERS MOVING OFF THE MLS, BUT CONCESSIONS ARE ALLOWED. Effective mid-July 2024, NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS. Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. Sellers will be able to offer buyer concessions on an MLS (like concessions for buyer closing costs), provided that such concessions are not conditioned on the use of or payment to a buyer broker. The types of compensation available for buyer brokers continues to take multiple forms, depending on broker-consumer negotiations (as all business decisions are always made unilaterally and independently). That could include but is not limited to: fixed fee commission paid directly by consumers; à la carte services; seller concessions; a portion of the listing broker’s compensation. Compensation continues to be negotiable and should always be negotiated between agents and the consumers they serve. As always, MIAMI REALTORS® will immediately notify members via email when the MLS Rules change. The most current MLS Rules are HERE.
- WRITTEN AGREEMENTS WITH BUYERS. Effective in approximately mid-July 2024 (this is subject to change), NAR has agreed to require MLS participants working with buyers to enter into written representation agreements with their buyers.
- SETTLEMENT PAYMENT. NAR would pay $418 million over the next 4 years if the proposed settlement is approved.
WHO IS COVERED BY THE PROPOSED SETTLEMENT:
- Over 1 million NAR members.
- All state/territorial and local REALTOR® associations.
- All association-owned MLSs.
- All brokerages with an NAR member principal that had a residential transaction volume in 2022 of $2 billion or below.
- Read the entire proposed settlement agreement HERE.
WHAT IS NOT IN THE PROPOSED SETTLEMENT:
- This is a nationwide release for all sellers and should resolve most of the litigation. While it affects most copycat litigation, there is also the possibility that there will be opt-outs from the proposed settlements.
- The proposed settlement does NOT apply to those who had a residential transaction volume in 2022 of more than $2 billion.
- Agents affiliated with HomeServices of America and its related companies (the last corporate defendant still litigating the Sitzer/Burnett case) are NOT released under the proposed settlement, nor are the employees of the remaining corporate defendants named in Sitzer/Burnett and Moherl.
WHAT HAPPENS TO THE OTHER PENDING ANTITRUST CASES:
- Because the proposed settlement agreement would not end litigation as to all defendants in all antitrust lawsuits pending across the country in state and federal courts, that other litigation may continue.
- In Batton I (N.D. Ill.), NAR’s answer to plaintiffs’ amended complaint is due on April 14, 2024, and there is a status hearing on May 7, 2024.
WHAT COMES NEXT:
- The proposed settlement is subject to court approval, which is a process that may take several months (or more) and will include an opportunity for interested parties to object. Objections and opt outs are common in large class action cases.
- NAR will ask the courts to pause litigation about the MLS cooperative compensation Model Rule pending the settlement approval process.
MIAMI REALTORS®‘ RESOURCES:
- Get your Antitrust Audit checklist HERE
- SIGN UP FOR BUYER’S REPRESENTATION COURSES ASAP. If you have not done so already, get your ABR (Accredited Buyer’s Representative) designation ASAP, and sign up for a course on understanding and implementing buyer broker agreements. Our online calendar of events is HERE (use the search bar to search for “ABR” and “buyer broker” for future classes).
NAR’S RESOURCES:
- NAR’s materials and resources are on facts.realtor
- NAR’s press release on the proposed settlement is HERE
- Litigation FAQ
- Financing FAQ
- Watch this video from NAR Chief Legal Officer and Member Experience Officer Katie Johnson and NAR President Kevin Sears (3/15/24)
- Watch this updated video from NAR President Kevin Sears (3/21/24)
- Correcting the Record: NAR Does Not Set Commissions
- Fostering Consumer-Friendly Real Estate Marketplaces
- NAR will continue to provide updates about the settlement process as it unfolds on competition.realtor
FLORIDA REALTORS®’ RESOURCES:
MIAMI REALTORS®’ ANTITRUST POLICY:
The MIAMI Association of REALTORS® adheres to a strict policy of compliance with both federal and state antitrust laws. As such, any discussions or activities with potential anti-trust implications, including but not limited to commission price fixing, market allocation, customer allocation, bid rigging, or boycotts, are strictly prohibited. MIAMI REALTORS® strongly endorses a competitive marketplace, ensuring that competitors have the freedom to engage in business without artificial restrictions on competition.
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.
