NAR hit with new commissions suit — but not from consumers
An Ohio renovation company filed the complaint after opting out of NAR’s $418 million settlement. Plus, an Atlanta brokerage settles in the Hooper case.
A company that specializes in acquiring and renovating distressed real estate properties in Northeast Ohio is suing the National Association of Realtors over commission fees.
Who filed the suit? On December 9, Abandoned Homes Project Scattered Site I and II LLC filed the lawsuit in U.S. District Court for the Northern District of Ohio, alleging antitrust violations and anticompetitive conduct. The filing accuses the trade organization of inflating transaction costs by "imposing restrictive requirements" that resulted in significant harm to renovators in the distressed property market.
What does this company do? The Abandoned Homes Project renovates and manages distressed properties within Northeast Ohio's low income communities to "alleviate urban blight and create affordable housing opportunities," according to the filing.
"As a direct result of these actions, Plaintiffs and similarly situated parties pay inflated commission rates, undermining their operational budgets for purchasing and improving distressed properties and impacting their ability to contribute effectively to community revitalization efforts," the filing states.
The organization said it opted out of NAR's $418 million settlement in order to pursue its own litigation in court.
What is the plaintiff seeking? The filing did not include a specific damages request, but the plaintiff said that due to NAR's alleged anticompetitive policies, the company "suffered significant economic harm" to the tune of $75,000 during a five-year period ending Aug. 17, when the new NAR rules went into effect.
In other court news
A settlement in Georgia: The real estate brokerage Atlanta Communities has reached an agreement with the plaintiffs in the Hooper case. The Dec. 10 filing did not include details about the settlement but indicated that a preliminary approval filing is coming promptly.
The Hooper case, filed in December 2023, named dozens of national and local brokerage firms. eXp and Weichert Real Estate reached settlement agreements with the Hooper plaintiffs in October and December, respectively, but those two settlements are being challenged. The Gibson/Umpa plaintiffs in Missouri claim that the firms reached their agreements via a "reverse auction" — meaning they shopped around to get the best deal rather than continuing to negotiate a settlement with the Gibson plaintiffs.
Atlanta Communities was not named as a defendant in the Gibson/Umpa case.