Use Caution When Posting Information or Opinions Regarding the
NAR Litigation and the Settlement
As most REALTORS® are aware, the National Association of REALTORS® (“NAR”) settled the antitrust litigation pending against it, as well as many other brokers, MLSs, and Associations of REALTORS® (“AOR”) throughout the United States. While this Settlement Agreement must still be approved by the court, CAR is recommending that its members be prepared to comply by mid-July.
Broker Risk Management (“BRM”) recently distributed a tip describing the details of that settlement. It has come to BRM’s attention that some agents are disseminating information to their clients and posting about the litigation and the settlement on social media and on public platforms. Those agents are not recognizing that these posts and distributed information may violate anti-trust laws, which could lead to significant personal liability on the part of the agent and the brokerage.
Some examples are as follows:
- “I do not understand why the media keeps posting that listing agents earn 6%. As a listing agent, I always charge 5%.”
RESPONSE: Under California law, all real estate broker commissions are negotiable, and the posting of a minimum commission in public on social media, or discussing or writing about broker compensation outside of your brokerage, arguably constitutes an anti-trust violation as agents are prohibited from setting a minimum or maximum commission in the marketplace.
- “I primarily represent buyers. I require my buyers to pay me 3% to represent them.”
RESPONSE: As set forth above, this post violates anti-trust laws subjecting the agent to personal liability.
- “I am a listing agent. I insist on my sellers paying me 5%. I then offer 2% to the buyer’s agents.”
RESPONSE: As set forth above, this is another example of an anti-trust violation.
- “As a listing agent, I always charge my seller 5%, but it is my decision as to how much to pay the buyer’s agent.”
RESPONSE: This is not only an anti-trust violation, but an ethical violation, which violates the terms of the NAR Settlement Agreement. Agents do not decide how much to offer to a buyer’s agent; sellers must make that decision. It is recommended that listing agents consult with their sellers before determining how much to offer to a buyer’s agent and document that agreement in writing.
- An agent stood up at an AOR meeting and stated, “I do not care what the industry does, my brokerage will always charge a 5% commission.”
RESPONSE: That agent was sued for anti-trust as a result of this statement.
DISCUSSION:
Now that NAR has resolved the litigation, agents need to focus on changing their real estate practices to adapt to the terms of that settlement. BRM addressed this in last week’s tip and will be addressing it at its webinar on April 4, 2024. In the meantime, it is imperative that agents refrain from making any written or verbal comments about the amount of commission being charged to their clients in any public forum. If agents have posted any of these comments, it is strongly recommended that the comments immediately be deleted.
If an agent is sued for anti-trust, their errors and omissions policy may pay attorney’s fees and costs to defend the action, but your insurance company will not pay for any settlements, judgments or penalties, because these expenses are excluded from coverage. Therefore, these posts can create significant and extraordinary liability for agents.
As a reminder, Broker Risk Management previously posted a tip regarding other social media concerns. A copy of that article is attached.230519 Social Media, Friend or Foe..
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is an attorney-client privileged communication for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management LLP. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.