News

Litigation update from NAR

Following the Moehrl v. NAR litigation filed in March that challenges the MLS system and the way that broker commissions are paid, two additional lawsuits with similar allegations have been filed against NAR and the same four franchisor firms that were sued in Moehrl.

The two new suits are quite similar to the Moehrl litigation. Plaintiffs in all three cases allege home sellers unfairly pay the commissions of buyers’ brokers. They ignore how commissions are subject to negotiation. And they question the value buyers’ brokers deliver in the home buying and selling process.

Often referred to as copycat lawsuits because the allegations are substantially similar to lawsuits already filed, such litigation is commonly brought by additional law firms whose ultimate goal is to combine their suits with others, in hopes they receive a portion of attorneys’ fees.

NAR remains confident these lawsuits are without merit. They are wrong on the facts, wrong on the law, and wrong on the economics. As each of you know, the MLS system is designed first and foremost with the buyer and seller in mind. It is pro-competitive and pro-consumer. And buyers’ brokers play a very real and critical role in the home buying and selling process. In the best interests of consumers, we will aggressively defend all three lawsuits – and any others that may be filed in the future.

As mentioned in March, we plan to file a motion to dismiss the Moehrl v. NAR case on May 17. In that motion, we will point out the commission offered to the buyer’s broker is determined by the seller and listing broker and is very much subject to negotiation. We will also note that courts have repeatedly held the MLS system promotes competition, increases the efficiency of the market and serves the best interests of sellers and buyers alike. In due course, we will file similar motions to dismiss in the other two cases.

Please note, courts are often reluctant to grant motions to dismiss. If our motion to dismiss is denied, we expect a years-long litigation process. However, we will continue to aggressively defend the right of American home buyers and sellers to continue to have access to a highly efficient home buying market supported by brokers who help navigate a complex transaction.

We hope this is helpful as you discuss this litigation with consumers. To that end, we would greatly appreciate if you could inform us of any media inquiries you receive (email: mwilliams@realtors.org).

Katie Johnson
General Counsel & Chief Member Experience Officer | Legal Affairs & Member Experience
NATIONAL ASSOCIATION OF REALTORS® | Chicago, IL
Office: 312.329.8372