Michigan Agents and Brokers Sue NAR Over Settlement

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Two Michigan real estate brokers and an agent have filed a class-action antitrust lawsuit against the National Association of Realtors (NAR) and its affiliated state and local Realtor associations, challenging the requirement that they belong to these trade groups to access the local Multiple Listing Service (MLS). The suit, filed on August 12 in the U.S. District Court for the Eastern District of Michigan, comes just days before NAR's nationwide commission lawsuit settlement is set to take effect.

Allegations and Defendants

The plaintiffs—Douglas Hardy, M.D., broker-owner of Signature Sotheby’s International Realty in Southeastern Michigan; Glenn Champion, Esq., a primary broker for the same brokerage; and Dylan Tent, an agent with the firm—have filed the complaint on behalf of all Michigan agents and brokers who are required to be Realtors to access the MLS. The suit names NAR, the Michigan Association of Realtors (MAR), the Grosse Pointe Board of Realtors, the Greater Metropolitan Association of Realtors (GMAR), the North Oakland County Board of Realtors (NOCBOR), and Realcomp II, Michigan’s largest MLS, as defendants.

The lawsuit accuses these organizations of civil conspiracy, economic coercion, and unfair restraint of trade, in violation of the federal Sherman Antitrust Act and the Michigan Antitrust Reform Act. The complaint argues that the requirement for membership in these associations, which is mandatory to access the MLS, amounts to an unlawful monopolization of the market, coercing real estate professionals into paying membership fees under duress.

Impact of NAR's Settlement

The plaintiffs’ frustration with the membership requirement has been exacerbated by NAR’s recent settlement, which introduces rule changes the plaintiffs believe will harm agents, brokers, and consumers alike. As part of the settlement, NAR has banned listing brokers from making offers of compensation to buyer brokers on MLSs, ended the requirement for sellers to offer buyer-broker compensation, and mandated that brokers and agents sign contracts with buyers before a home tour.

The complaint claims these changes diminish the value of mandatory Realtor membership, as they eliminate the guarantee of broker compensation and invite potentially deceptive and discriminatory practices. The plaintiffs argue that these changes could lead to side negotiations, confusion among consumers, and even fair housing violations.

Plaintiffs’ Attempts to Opt Out

Earlier this year, the plaintiffs sought to opt out of the compulsory memberships or drop them altogether while still accessing the MLS. Their requests were denied by Realcomp II, MAR, and the local Realtor associations, with the organizations maintaining that membership in all three entities was mandatory.

The plaintiffs are seeking damages, attorney costs and fees, and a jury trial. NAR has responded by defending the settlement's rule changes, emphasizing that they bring greater transparency to compensation and protect consumer choice. The organization has stated that it will contest these claims in court.

This lawsuit underscores the growing tensions in the real estate industry as professionals grapple with the implications of NAR’s settlement and the evolving landscape of business practices.