Propmodo Daily

By Franco Faraudo · Feb. 5, 2024

Greetings!

The legal battles for the National Association of Realtors and some of the country’s largest brokerages continue. After the surprise verdict of the Sitzer/Burnett case, copycat lawsuits have been filed around the country. Now we are starting to see diverging paths from the defendants when it comes to legal strategy, as we explore in today’s daily.

Cities across the U.S. are updating zoning laws to breathe new life into urban areas and address housing shortages. Our latest article dives into initiatives such as converting office spaces into residential areas, allowing for more compact development by doing away with single-family zoning, and relaxing parking requirements. These reforms hold potential, but they're not without their challenges, including pushback from communities worried about gentrification and increased traffic. Despite these obstacles, zoning reform is becoming a key approach to creating more inclusive, sustainable, and welcoming cities.

This week, Propmodo Technology delves into the cutting-edge innovations that are shaping the future of hybrid work environments. From the flexibility of modular design to calculating office space needs, we're exploring how facilities managers and workplace experts are incorporating technology into office management.

Now let's dig in!

The Diverging Paths of the Commission Split Lawsuit Defendants

It has been nearly 5 months since a jury in Missouri shocked the real estate industry by siding with the plaintiffs in a class action lawsuit against the largest real estate companies and organizations for the tune of $1.8 billion. The decision sparked an explosion of copycat lawsuits that were filed from Washington to Georgia.

The main defendant in the cases, the National Association of Realtors, has vowed to fight the lawsuit. “NAR’s commitment to defend ourselves in court remains unchanged, and we are confident we will prevail in proving the lawfulness of the rules under attack,” Mantill Williams, NAR’s vice president of public relations and communication strategy, said in a statement. “We look forward to arguing our case in court,” he added.

NAR has asked the court to consolidate all of the remaining lawsuits into one centralized case. They suggested that this single case be heard in the North District Court of Illinois, where they are defendants in another lawsuit. The real estate association has also been very careful about the way that they speak about the case. The interim president posted a video with the interim president saying that “NAR does not set commissions; it never has and it never will” but later changed it to say "NAR does not set commissions. And it never will."

The reason for the change was that the FTC did find the organization guilty of fixing commissions back in 1983. “We updated the video to avoid any distraction from the fact that NAR does not set commissions and that our rules have expressly prohibited anticompetitive behavior for decades,” a NAR spokesperson wrote in an email.

Other defendants don’t have the same resolve. RE/MAX and Anywhere Realty have already settled, and last week, Keller Williams decided to do the same. Now that each of these companies paid around $70 million to release themselves from any further litigation, it serves as a good estimate of what it would cost for the other brokerages to end this likely lengthy legal battle.

NAR has every reason to fight this lawsuit to the end. Being an advocate for the industry is one of the reasons that members pay dues. That advocacy might be even more important if they lose control over the country’s multiple listing services. The real estate companies, on the other hand, have a much more compelling reason to settle. The seventy million dollars that the settlement cost has to be weighed against the future legal fees needed to fight the seemingly never ending copycat lawsuits. My guess is that more companies will choose to pay the fees and end these cases to not have to deal with the expenses and bad press that come with them.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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