Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
NWMLS Responds to Compass’ April lawsuit
In a court document filed last Monday, Northwest MLS (NWMLS) urged a judge to dismiss Compass’ lawsuit, filed in April, accusing the MLS of breaking the law by banning Compass’ private listings.
In the filing, NWMLS argued that there is no substantial or supported accusation of illegal conduct.
“Compass claims to have suffered ‘anticompetitive harm’ when just its license to NWMLS IDX listing data feed was suspended for two days,” the filing reads. “Yet, Compass wants to free ride by depriving its competitors of access to Compass’ own listings through its Private Exclusive program.”
“Compass cannot have it both ways—depriving its competitors of Compass’ newest and most choice listings while claiming it needs unfettered access to all other brokers’ listings,” the filing continues.
Compass responded to NWMLS’ “several misleading and self-serving claims” in a press release issued the evening of July 3.
Responding directly to NWMLS’ claim of Compass pursuing a ‘free-rider strategy,’ Compass said in a press release that if the MLS truly cared about free-riding, it would remove Zillow from its platform.
“After all, Zillow – a NWMLS member – takes all NWMLS listings without contributing a single listing back to NWMLS,” read the release. “In fact, by that same logic, NWMLS itself could be considered the ultimate free-rider: brokerages provide the inventory that gives NWMLS its very purpose, yet NWMLS takes that inventory for free, forces brokers to participate under threat of exclusion, monetizes those listings by selling the data to third parties, and then charges brokers dues to access the very listings they provide.”
New homebuyer lawsuit
A new copycat commission lawsuit, from a homebuyer, was filed June 28 against the following brokerages: The Real Brokerage and Realty ONE Group, as well as The Agency and San Francisco luxury brokerage Vanguard Properties.
Filed by homebuyer Kevin Cwynar, the suit alleges that the brokerages “adopted and implemented anticompetitive practices that harmed consumers and homebuyers by, among other things, increasing and artificially sustaining the commissions paid to real estate brokers as part of residential real estate transactions.”
Similar to arguments made in the Burnett case, the filing alleges that buyers paid inflated home prices to cover the buyer and seller agents’ commissions, something they were unaware of and unable to negotiate.
The new lawsuit also names the National Association of Realtors® (NAR), “NAR MLSs, and NAR-affiliated brokerages and Realtor associations” as co-conspirators, as each brokerage named is part of NAR as well as the MLSs the agents use.
PLS.com refiled suit against NAR
The National Association of Realtors® (NAR) is under fire again—this time by a refiled lawsuit from former pocket listing startup, PLS.com.
The original lawsuit was filed in 2020 and claimed that NAR was using the Clear Cooperation rule to suppress competition from other listing services.
According to the filing, the suit was paused early last year while NAR was in the midst of resolving the commission lawsuits. The lawsuit was refiled last week at 12:30 a.m. Tuesday morning and seeks treble compensatory damages.
An agreement to pause the lawsuit was in the process of being extended, but that changed the night before the refiling, according to an NAR spokesperson.
“NAR and PLS were in discussions to extend this agreement until PLS ceased to engage…PLS refiled its suit,” they said. “NAR will respond directly to the plaintiff’s claims in court. The Clear Cooperation Policy promotes transparency and competition in the real estate marketplace while still providing home sellers and their agents the option to list their property as an office exclusive.”
Detroit sues Real Token
The City of Detroit has sued Real Token, also known as RealT, alleging that the blockchain-based real estate investment platform neglected its responsibility to ensure that hundreds of properties in Detroit complied with basic health and safety requirements.
“This is the largest nuisance abatement case in our history,” said Conrad Mallett, Corporation Counsel for the City of Detroit. “These defendants have profited from our communities while ignoring their most basic legal obligations as landlords and property owners. Our neighborhoods are not investment portfolios—they are homes for Detroit residents.”
Mallett added, in the release, that this lawsuit is meant to send a message.
“No matter how innovative your business model may be, you cannot hide behind technology or corporate formalities to evade your responsibilities as a property owner.”
