After the National Association of Realtors® (NAR) made comprehensive updates to MLS policies—saying that most are meant to “modernize” and remove “outdated practices”—brokers who are currently suing NAR are citing the changes as an acknowledgment that these policies ran afoul of the law.
In a court filing yesterday, lawyers representing three real estate professionals in Michigan, who sued NAR and local associations last year over MLS access requirements, told a federal judge the decision amounts to admitting that those requirements are “a violation of Anti-trust law.”
“This admission is critical to the issues raised by Plaintiffs in their complaint and rebut the Defendants’ arguments that the previous policy of the NAR requiring membership in its organization in order for brokers and agents to access the MLS did not violate Anti-trust law and were not wrongful,” the filing reads.
In an emailed statement, NAR said it would “respond directly in court” to the plaintiffs in the case.
“NAR stands by the pro-competitive, pro-consumer local broker marketplaces, which local associations may choose to provide as a member benefit. Each local MLS sets their own requirements for determining access to the platform,” the spokesperson said. “NAR’s recently announced changes to the MLS handbook do not change the fact that MLSs have local discretion about whether to require association membership to participate.”
The broker lawsuit, known as Hardy v. NAR, was the first of a handful of post-settlement federal legal claims by brokers who challenged Realtor® membership requirements and fees, most focusing on MLS access. At least two of those lawsuits were dismissed by judges, while at least four others are still pending.
The Hardy lawsuit explicitly cited the NAR settlement as making MLS access less valuable to real estate professionals. Plaintiffs in the case had sought to negotiate a way to access the MLS without Realtor® membership in the months after that agreement was announced, but claim they were denied.
Since 1994, NAR has officially delegated rules on MLS access requirements to local MLSs and policies differ widely across the country. In four states (California, Alabama, Georgia and Florida) it is illegal for MLSs to require Realtor® membership for MLS access, based on two separate court decisions.
The policy changes referenced by the Hardy plaintiffs removed language that said “(t)o the extent permitted by law, the National Association remains firmly and unequivocally committed to the principle that association membership is a reasonable condition of participation in the association’s multiple listing service.” NAR had previously written that it would provide legal or financial assistance to local associations or MLSs who were sued over these policies.
In its updated guidance released after the recent policy changes, NAR wrote that “MLSs will seek assurance that they can still require association membership locally and deem it a reasonable requirement.” NAR added that overall, the policy changes are meant to “reinforce matters of local discretion, such as non-member access to MLS.”
The changes were made after an outside antitrust risk assessment—something the Hardy plaintiffs noted to the judge. Defendants previously asked the judge to consider the dismissals of the other two similar lawsuits as “supplemental authorities,” with plaintiffs opposing that effort.
In response to inquiries about whether the organization would still support MLSs or associations facing legal challenges to Realtor® membership requirement rules, the NAR spokesperson said that “NAR is committed to supporting state and local associations and association-owned MLSs, including with litigation defense when appropriate.”
