Could NAR’s settlement derail MLS PIN agreement? 

As if there weren't enough complications in the Nosalek case, the Mar. 15 settlement proposal from the National Association of Realtors has created new uncertainty in the Massachusetts lawsuit, even though NAR is not a party to the case.

On March 20, the Nosalek plaintiffs submitted a request to extend the deadline for responding to the U.S. Department of Justice's statement of interest. The plaintiffs requested the extension because NAR's proposed settlement could impact the earlier settlement agreement between the plaintiffs and MLS PIN — one that the DOJ objected to in its statement.

Among other rule changes, the NAR settlement mandates the elimination of offers of compensation to buyer brokers on the MLS. In the MLS PIN agreement, those offers could still be made but would not be required.

"Because many Massachusetts real estate brokers are members of NAR and, therefore, could be affected by different rules, the parties need to consider the impact of the proposed NAR rule change on this settlement," the court documents stated.

When asked about the plaintiffs' latest filing, Melissa Lindberg, chief strategy and partnership officer for the organization, said MLS PIN, also known as MLS Property Information Network, cannot comment on pending litigation. 

Next steps: The plaintiffs need to analyze the NAR settlement and discuss any proposed changes with MLS PIN and the DOJ, according to court documents filed March 20. This is happening as the U.S. Judicial Panel on Multidistrict Litigation gets ready to hear oral arguments on whether cases like Nosalek and the copycat lawsuits filed in the past four months should be consolidated into one case.

The plaintiffs wanted to submit a response before those oral arguments take place on March 28, but are now asking to submit a status update within seven days of the panel ruling on consolidation. The plaintiffs anticipate a ruling on consolidation will be made in April.

Original agreement: The initial settlement required MLS PIN to pay $3 million and change its rules surrounding buyer-broker compensation. Interestingly, if MLS PIN had not already reached an agreement and later chose to use the settlement formula outlined in the NAR agreement, it would be on the hook for more than $4.4 million.

The $3 million settlement, which was expected to be finalized this spring, was contested by the DOJ, who said the proposed compensation rule changes were insufficient. The DOJ has suggested it wants an injunction that would "prohibit sellers from making commission offers to buyer brokers at all."

And that suggestion goes even further than what's outlined in the NAR settlement agreement.

Specific rule changes originally agreed to by MLS PIN include eliminating a mandatory offer of compensation from the seller to the buyer-broker, requiring listing agents to notify their sellers that such compensation is not required, and making it clear that any compensation offered by the seller to the buyer-broker can be negotiated among all parties.

Case details: The lawsuit, filed in 2020, is one of several ongoing cases challenging the current system of buyer-broker commissions. MLS PIN, which serves much of Massachusetts, along with several brokerage companies, was sued by home sellers who object to rules that force them to pay buyer agent commissions. 

The original defendants in the case were MLS PIN, Anywhere, RE/MAX, Keller Williams and HomeServices of America. HomeServices is the only remaining defendant, as the MLS and other brokerages previously reached settlements covering commissions lawsuits brought by sellers.