Real Estate Class Action Lawsuit
The real estate industry has been facing a wave of recent lawsuits, including a class action suit targeting the National Association of REALTORS. These lawsuits allege that the organization's rules on commissions artificially inflated prices, and thereby made homesellers overcharged. In other words, the rules violated the code of ethics. Here's a quick look at how these lawsuits work. If you're in the market for a home, you should know what you're up against.
In the real estate class action lawsuit, a plaintiff claims that the industry's fee structure is unfair to consumers. In other countries, real estate agents are paid just half of what they make in the U.S. For example, a class member who sold a $500,000 home paid between $12,500 and $15,000 more in commissions. This, the plaintiff claims, creates an environment where the market can't be competitive.
The Sunderland Law Firm is attempting to represent the interests of consumers by pursuing a real estate class action lawsuit in Canada federal court. The lawsuit was originally filed in April 2021. It alleges a conspiracy between real estate brokers and the industry to raise prices for homes. It's unclear whether the price-fixing conspiracy involved the MLS. This lawsuit could lead to a settlement for consumers who were cheated out of their money in the real estate market.
In addition to the NAR, the plaintiffs have named the four major national real estate broker franchisors, including HomeServices of America, Prudential Real Estate, Century 21 and Coldwell Banker. The lawsuit claims that the real estate industry and the National Association of Realtors (NAR) conspired to increase home selling commissions, a practice known as "competition," according to the lawsuit. If the plaintiffs win the case, thousands of home sellers could potentially receive compensation.
The NAR's recent withdrawal from the lawsuit prompted the plaintiffs' association to file a petition to block the Justice Department's withdrawal from the settlement. However, the Justice Department has not yet made a decision. The NAR's petition will likely be approved only after the settlement is completed. Despite this victory, the NAR is not free of future lawsuits. In fact, they were previously sued in antitrust litigation, and the NAR sued the association on their behalf in order to stop them from doing so.
The plaintiffs also filed a lawsuit against listing agents, alleging that these agents forced sellers to pay more than they should for their services. In the lawsuit, Sitzer and Moehrl also cited the Buyer Agent Commission Rule as a contributing factor in the inflated costs of selling homes. While the NAR's settlement agreement reached a settlement that eliminated the monopoly on commission sharing, it still requires the listing agent to pay more than the buyer's agent.
Another common reason for going to court is breach of contract. Real estate contracts often include specific details, including title clearance, closing date, and assets. If the wronged party fails to fulfill these details, he or she is entitled to compensation. A real estate class action lawsuit can be effective in redressing perceived wrongs. But despite the risks, it remains an excellent option for both sides. It may be worth pursuing, especially if you believe the outcome is fair.