Why one broker took on NAR: ‘They just keep overreaching’ 

For Lou Eytalis, it was NAR's myopic focus on rules — coupled with its failure to push for meaningful change — that led her to challenge the most powerful organization in real estate.

Eytalis, a broker in Wichita Falls, Texas, is one of several real estate professionals across the U.S. suing NAR and other Realtor organizations over so-called "forced" membership policies that often require agents to join their local and state associations — along with the National Association of Realtors — in order to access multiple listing services. 

Similar lawsuits are working their way through the courts in Michigan and Pennsylvania, and the most recent case, filed in Louisiana in January, also alleges that the unfavorable spotlight on NAR — which includes national media coverage of sexual harassment allegations and "lavish" spending — has harmed the reputation of the entire industry.

Growing dissent within the industry

The events of the past 18 months may have set the stage for the lawsuits, with two big issues — NAR's alleged failure to address internal complaints about its leadership and culture, and its handling of the commissions lawsuits and settlement — angering some in the industry. Others have expressed concern that rule changes will negatively affect their business. 

Eytalis believes those issues, plus NAR's aggressive enforcement of rules, are at the core of the membership lawsuits: The plaintiffs don't want to be shackled to an association they've lost faith in, but they need MLS access to do their jobs effectively.

"It's just become this institution that we cannot abide anymore. It's not there for our benefit," Eytalis told Real Estate News.

'No business telling me how to run my business'

Like many real estate professionals, Eytalis has been willing to pay multiple memberships for years because of the value behind the Realtor name. But a recent experience with NAR pushed her to take legal action.

As a broker with around 30 agents in Texas and Oklahoma, she's responsible for the dues of every agent in her firm. After a handful of agents didn't renew their memberships — either because they left the industry or moved — she became embroiled in a battle over penalties.

Eytlis acknowledges that they didn't notify NAR about the non-renewals, but she found the consequences to be random and draconian. She said if she didn't pay a penalty right away, she was told all of the agents in the firm would have their association membership revoked, leaving them without essential access to MLS data.

That prompted Eytalis to research NAR bylaws, and she came to the conclusion that the penalty didn't actually exist. She first took the organization to small claims court, ultimately deciding to file an antitrust lawsuit in federal court.

"They had no business telling me how to run my business," Eytalis said. "It was an overreach of their power."

More than money: Pushing for change — and survival

While the mandatory membership lawsuits take issue with fees — from criticisms of NAR's three-way agreement, to claims that members no longer get any value from their dues, to allegations that the fees disproportionately harm minority professionals — Eytalis says the issue is bigger than that.

"It's not about the money. It's about change, and the only way we are finding that we're getting results or feel like we can make a difference is by filing these lawsuits," Eytalis said. 

During her 15 years in the industry, she's observed how the business of real estate has changed. She sees parallels to the travel industry, whose failure to innovate allowed technology to replace travel agents — and worries that NAR is taking the industry down the same path.

If agents can choose whether to join NAR, she believes the association will have to do more to provide value for members — or it won't survive. 

"The more we yell, the louder we roar, the more likely we are to actually make them change. … Otherwise we're going to have to be happy with the status quo or wait for the technology to completely take our business."

NAR says it doesn't make the rules

NAR has taken a multifaceted approach in responding to the membership lawsuits. In a recent filing in the Michigan case, attorneys for NAR and other defendants asked the judge to throw out the lawsuit on its merits, arguing that the necessary elements for an antitrust claim are largely absent.

While NAR says it will respond to other specific claims in court, it has repeatedly stated that local organizations dictate rules about MLS access. Yet when one local association — Phoenix Realtors — recently began offering MLS Choice, an access plan that doesn't require association membership, NAR quickly sought to shut it down.

The association's latest move, however, appears to be more about carrots than sticks. Citing the need to increase outreach and strengthen relationships at the local and state levels, NAR announced last week the appointment of Jarod Grasso to a newly created role, SVP of  industry relations. NAR CEO Nykia Wright said it was a critical step "to ensure we're hearing real-time feedback about challenges leaders face so they can be addressed quickly."

Getting the word out

Meanwhile, Eytalis has embarked on a PR campaign of her own, creating a private Facebook page — the Real Estate Reform & Fairness Initiative — and setting up a GoFundMe account to tell her story and help pay for court costs. "I just wanted to create a space where we're giving the information to the agents so that we can have a conversation about this," she said.

While she doesn't know whether any of the lawsuits will be successful, Eytalis senses that rumblings of discontent have been building, and she hopes that will push NAR to make changes. 

"They just keep on overreaching," Eytalis said. "And if we don't stop them, how much farther are they going to go?"