William Whittman, a broker licensed in Maryland, D.C. and Virginia is suing the National Association of Realtors® (NAR), Virginia Realtors® (VR), Northern Virginia Association of Realtors® (NVAR), Maryland Realtors® (MR) and the Greater Capital Area Association of Realtors® (GCAAR)—claiming to have suffered millions of dollars in damages due to the defendants’ “unlawful restraints of trade, exclusionary practices and fee structures.”
Filed in the Federal District of Maryland, Whittman is alleging that NAR’s “Three-Way Agreement” is a “nationwide cartel structure that extracts fees at every level.”
“The only reason brokers like plaintiff are compelled to join NAR, VR, MR, NVAR or GCAAR is because these private associations have seized control of MLS systems, lockboxes and standardized forms, erecting private tollgates where the law requires none—forcing brokers to pay repeatedly and still be denied statewide or nationwide access,” the filing reads.
The claims echo a handful of other broker lawsuits—some which have already been thrown out by federal judges—alleging that NAR rules around Realtor® fees and MLS access violate antitrust laws. NAR does not explicitly decide where non-Realtors® can access local MLSs, ostensibly allowing each MLS to make its own decision.
In his pro-se lawsuit, Whittman claims that his business expansion was stifled in 2005, when his firm, Proplocate Realty LLC, which had 300 agents and a valuation of over $2 million, had agents leaving due to the associations’ rules involving duplicative membership dues in every jurisdiction. Whittman’s lawsuit is also full of colorful, acrimonious language, referring to NAR and the other defendants as “…cancerous growths feeding on REALTORS®,” as “an infestation” and “predatory.”
In the court documents, Whittman also claims his firm is not a member of the associations named, but alleges that if it wasn’t for defendants’ anticompetitive restraints, his firm would have expanded nationwide, with thousands of agents and tens of millions of dollars in enterprise value.
“Defendants are nothing more than private corporations that have entrenched themselves as gatekeepers, constructing a tri-layered paywall of local, state and national dues forcibly extracted to unlock MLS, lockboxes and standard forms,” Whittman wrote.
Whittman goes on to explain that although he pays cumulative fees to NAR, VR and NVAR, totaling $759 annually, in order to maintain access to essential services in Virginia, these payments don’t provide access outside NVAR’s “narrow jurisdictional boundaries.”
Likewise, Whittman also pays dues to the GCAAR, $292 annually, and it only covers Montgomery County, Maryland and D.C.
NAR’s “Three-Way Agreement,” which the organization has continued to stand behind, makes these fees mandatory for anyone trying to practice real estate, Whittman wrote. He also claimed, without evidence, that disputes between Realtors® or firms arbitrated by local associations are “kangaroo courts,” which always favor “large, well-connected firms” over small brokerages like his.
Whittman did allege, however, that in all disputes involving his agents and larger firms, the association decided in favor of the big companies.
After paying fees to both NVAR and GCAAR, Whittman claims that he and his agents cannot access forms, lockboxes or MLS listings just across county lines, within the same state, unless they pay additional fees to local boards.
“These boards abuse their control over MLS, lockboxes and forms as weapons of punishment rather than facilitation, and even overstep by penalizing non-members—all in furtherance of defendants’ cartel scheme.”
Whittman is seeking $2 billion in punitive damages and $50 million in treble damages.
RISMedia has reached out for comment from NAR and received the following response from an NAR spokesperson.
“NAR membership is optional. Similar to other national membership organizations, NAR’s integrated structure at the national, state and local level is fundamental to the value we deliver to members. It provides members with a unified voice on policy issues at all levels of government, a uniform Code of Ethics and valuable tools and professional development opportunities that help members serve homebuyers and sellers alike. Over the summer, two separate courts ruled against similar challenges, and we will similarly respond to these allegations in Court.”
Local associations could not immediately be reached for comment.
