Lew Sichelman
If you purchased a property that was listed on any multiple listing service and paid a commission to a real estate agent, you may be entitled to a cash payment from a class-action lawsuit filed against the National Association of Realtors and a couple dozen real estate brokerages.
A settlement has been agreed to by the defendants, who collectively have set aside over $120 million. With a few exceptions, the agreement covers all people who purchased an MLS-listed house, anywhere in the country, where a commission was paid to any brokerage in connection with the transaction. The listing service need not be affiliated with NAR.
If the agreement is approved by the U.S. District Court for the Northern District of Illinois, the funds will be distributed on a pro rata basis after deductions for fees and costs associated with the suit. The net amount after deductions will be paid out in more than one payment issued over several years.
The individuals who brought the suit (Tuccori et al. v. At World Properties, LLC et al.) claim the defendants created anti-competitive rules designed to keep brokers’ commissions artificially elevated. The suit also claims the defendants participated in an unlawful conspiracy to implement and enforce these rules in residential real estate transactions.
This conspiracy allegedly impaired competition in the market for residential real estate broker services nationwide, to the detriment of consumers, who unwittingly paid inflated commissions as part of their respective home transactions. This in turn harmed buyers by inflating home prices and reducing the quality of buyer-broker services.
Latest Commission Suit Settlement
No court or jury has ruled one way or the other on the merits of the suit. The defendants denied any wrongdoing, but agreed to settle to avoid the cost and uncertainty of further litigation.
The list of defendants includes Anywhere Real Estate, Compass, eXp, Home Services of America and Realty ONE. Anywhere’s brands include Better Homes and Gardens Real Estate, Century 21, Coldwell Banker, Corcoran, ERA and Sotheby’s International Realty.
The suit only includes homebuyers, not sellers, and does not overlap with any existing seller settlements. Previous settlements – including cases known as Burnett, Gibson, Keel and Hooper – cover people who sold homes.
To be eligible, you must have purchased a house during the “class periods,” which vary by state and defendant. The starting dates vary quite a bit by location, but all windows end with June 25, 2026.
You can locate the dates for your state here: homebuyersettlement.com/en/Home/FAQ#faq6.
Buyers can opt out of the settlement if they so choose, in which case they would not be bound by the settlement or any judgment in the case. But if you remain a member of the class, you give up the right to sue, continue to sue or be part of any other lawsuit against the defendants.
40-Year Listing Firm in Crosshairs
Meanwhile, in other legal news, the noose keeps tightening around the neck of MV Realty, the Florida-based firm that sold a controversial “Homeowner Benefit Program” that locked homeowners into 40-year listing agreements in exchange for stipends running from a few hundred dollars to upwards of $5,000, depending on the value of the property.
Those pacts have become known as NTRAPS, which stands for Non-Title Recorded Agreements for Personal Services. They also are known as future-right-to-list contracts or right-to-list contracts.
In the latest development, MV Realty has settled with the California attorney general’s office and agreed to pay $2.5 million to affected homeowners. In his suit against the company, AG Rob Bonta labeled the firm a “financial predator,” and said it signed the unlawful deals with nearly 1,500 Golden State homeowners.
According to the suit, MV misrepresented the significant downsides of its agreements, including that it places a lien on the owner’s property that prevents them and their successors from transferring the house without paying the company 3 percent of the home’s value, even if the company fails to provide diligent realty services.
MV Realty charges owners a 3 percent penalty if they sell their homes without using MV Realty or otherwise cancel their agreement, and refuses to lift its liens unless owners pay the fee, the suit said. In addition to blocking transfer of the house, the lien can also impede, delay or prevent an owner from obtaining financing.
“Through its one-sided agreements, the company lined its own pockets at the expense of vulnerable homeowners in California, holding their most valuable assets hostage,” Bonta said when filing the suit.
Future Right to List Contracts Banned
More than 30 states have now passed legislation banning or regulating NTRAPS, according to the American Land Title Association, which has lobbied hard against such contracts. AARP also has lobbied against the deals.
“The way these agreements are marketed to property owners and the terms, duration and enforcement of these agreements are concerning,” ALTA said in its position statement. “There are no regulatory disclosure requirements. … As a result, consumers may not fully understand the implications of these agreements.”
The trade group also said that in recording the contracts, property records can create a long-term barrier to the sale or refinancing of real estate or hamper estate administration.
In Nevada, MV agreed to make null and void more than 700 right-to-list contracts and pay $200,000 in restitution to homeowners who were forced into paying early termination fees. In Pennsylvania, the company agreed to terminate more than 1,300 liens it recorded on properties in the state and pay nearly $650,000 in restitution to homeowners. And in North Carolina, a Superior Court has permanently barred the company from enforcing its contracts, thereby protecting more than 2,000 owners who had signed on.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at lsichelman@aol.com.
