Plaintiffs’ attorneys are checking on NAR settlement compliance

Almost 11 months have passed since the business practice changes mandated by the National Association of Realtors’ (NAR) commission lawsuit settlement agreement went into effect. Now, the co-lead counsel for the settlement class is looking to find out if the parties are complying.

In a letter sent in April but filed in court last week, the plaintiffs’ co-lead counsel asked 25 MLSs and Realtor associations for proof of compliance with the settlement terms. They called the filing an update on the “ongoing efforts” to enforce the business practice changes outlined in NAR’s commission lawsuit settlement agreement.

Entities in states across the country received letters, including Stellar MLS, Canopy MLS, Northstar MLS, California Regional MLS (CRMLS), Bright MLS, Colorado Association of Realtors, Texas Realtors, Pennsylvania Association of Realtors, New Jersey Realtors and Florida Realtors.

The enforcement mechanisms in the settlement grant the co-lead counsel authority to “request proof of compliance from entities bound by the settlement’s practice changes.” By opting into the settlement, MLSs and Realtor associations agreed to provide proof of compliance as a condition of their being covered by the settlement. 

What’s in the letters?

Included in the filing were letters sent to Bright MLS and the Colorado Association of Realtors by attorneys at Cohen Milstein Sellers & Toll. In the letters, the attorneys ask for all guidance and educational materials given to members about compliance with the settlement’s business practice changes.

They also request all listing, purchase and buyer representation agreement forms; all forms related to buyer broker compensation; proof that the the organizations are enforcing compensation disclosure requirements; and documents related to the organizations’ “positions on the use of ‘Touring Agreements’, ‘Showing Agreements’ or similar agreements between buyers and brokers.” 

Each of these requests closely mirror the objections given last year by University of Buffalo law professor Tanya Monestier before the settlement was granted final approval by the court. In her objection, Monestier said the settlement “is the worst of all possible worlds,” and that the implementation of the settlement was a “disaster.”

In her October 2024 objection, Monestier claimed that there was already “ample evidence” of agents asking buyers to sign modified buyer representation agreements, which allow a buyer’s broker to increase their agreed-upon compensation to whatever the seller is offering.

Additionally, she claimed that some buyers were being asked to sign documents that allow for “seller paid bonuses,” if the seller is offering more compensation than the buyer and their broker agreed to. 

She also addressed touring and showing agreements. Monestier argued that if a buyer’s agent uses one of these agreements and their offer is successful, the agent “will not be able to collect any fees in excess of what was agreed to in that initial agreement.”

“In other words, a realtor is limited to the amount set out in the agreement that was signed prior to the showing — not an amount reflected in a new buyer representation agreement entered at the time the buyer decides to submit an offer,” she wrote.

Further engagement

According to the filing, the plaintiffs’ attorneys are planning on sending more letters to other MLSs and associations in the coming months. Additionally, representatives for the plaintiffs also recently attended a legal seminar run by the Council of MLSs (CMLS), where they engaged “with MLS leaders and their counsel to discuss settlement requirements and compliance.”

In an email to HousingWire, a spokesperson for CMLS said the legal seminar is something the trade group holds each year as it seeks to help its members “understand the legal landscape and lead with confidence.”

“CMLS sought to hear from co-lead Plaintiffs’ counsel for perspective on the settlement, as compliance is a pertinent topic for MLSs,” the spokesperson wrote. ”Our job is to support MLSs, and we wanted to bring this perspective and engage in conversation about transparency and serving the market.

“We are proud of the work our members have already done and how quickly they’ve responded to the changing needs of the marketplace. In our role as trade association, CMLS provides our members with implementation guides and resources to navigate policy changes and make the real estate market work.”

Art Carter, the CEO of CRMLS — the nation’s largest MLS by subscriber count — told HousingWire that his firm answered the letter in its entirety. He said the plaintiffs’ counsel was provided with a file of roughly 50 megabytes that included all of the rule changes, forms and training materials.

Prior to the business practice changes going into effect, Carter estimated that he and his team worked with nearly 50,000 agents to educate them.

“Overall, I’m very proud of what we did to make sure that we were adhering to the settlement and to make sure that our members were as ready as possible,” Carter said. 

Other parties addressed in the filing and contacted by HousingWire did not return a request for comment, did not wish to comment on the matter, or would only confirm the receipt of the letter and the return of their required response. 

According to the filing, if the co-lead counsel finds that an MLS or Realtor association is not complying, they will “ if necessary, bring instances of noncompliance to the Court’s attention.”