COURT REPORT: Judge Approves Seller Settlements; AREAA Files First Lawsuit; Redfin Settles


Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.

AREAA

The National Fair Housing Alliance (NFHA), Asian Real Estate Association of America (AREAA), Housing Opportunities Project for Excellence, Inc. and the Fair Housing Center of the Greater Palm Beaches, have filed a fair housing discrimination suit in Miami federal court, together challenging Florida’s state law SB 264. Each organization is claiming the bill violates the Federal Fair Housing Act—with claims that Florida is allegedly restricting people from China, Russia, Iran, North Korea, Cuba, Venezuela and Syria from buying property in the state.

Jamie Tian, president of AREAA, says that Governor Ron DeSantis and the rest of Florida’s legislatures have left an opening for continual discrimination, while also creating barriers of homeownership entry for possible AANHPI (Asian American Native Hawaiian and Pacific Islanders) homebuyers and sellers. This is the first time the organization has filed a lawsuit since its launch in 2003.

“This is a momentous day for AREAA and our 19,000 members as it is the first time we have filed suit to protect the rights of the AANHPI community,” said Tian.

According to the Florida Senate, “The bill generally restricts the issuance of government contracts or economic development incentives to, or real property ownership by, foreign principals, which are certain individuals and entities associated with foreign countries of concern,” which include China, Iran, Cuba and North Korea.

The advocacy organizations claim SB 264 almost completely forbids Chinese citizens and those domiciled in China from buying any property across Florida.

In the complaint, plaintiffs assert that the law is flawed, and it exemplifies clear xenophobia and discrimination “transparently motivated by discrimination against people from the seven targeted countries based on their national origin.”

Redfin

According to new legal filings in the U.S. Securities and Exchange Commission (SEC), Redfin will pay $9.25 million as part of a settlement agreement reached with homeseller plaintiffs in the class-action lawsuit known as Gibson. This amount comes as plaintiffs argue that Redfin—as well as other brokerages such as The Real Brokerage, Realty ONE Group, Compass, Douglas Elliman and @properties—worked to inflate commissions, violating antitrust laws.

The proposed settlement comes as no surprise, as Redfin—along with 87 other brokerages—was not covered in the National Association of REALTORS®’ (NAR) March 15 settlement. Brokerages not covered have until June 18 to opt into the settlement.

As with other settlements reached by brokerages in the seller lawsuits, the agreement does not include an admission of liability, and is still subject to court approval. The company will pay the full $9.25 million within 30 days of receiving preliminary approval from a judge.

HomeServices collateral

In the wake of HomeServices of America’s $250 million historic class-action, commission-focused settlement, leadership within the national brokerage has provided affiliated operating companies and agents with an extensive breakdown of what comes next for them regarding rule changes and overall impact on transactions for sellers moving forward—something that seemingly hasn’t yet been done to this degree across the industry.

While HomeServices of America (HomeServices) has agreed to make changes to policies around commissions and disclosures, the company admitted no wrongdoing as part of the settlement. The amount is being paid solely by HomeServices of America, and there will be no required contributions from parent entities or franchisees.

The various pieces of collateral distributed to agents May 3 consisted of a personal letter from HomeServices President and CEO Gino Blefari, a settlement guide and a comprehensive set of FAQs. 

Judge approves seller settlements

Judge Stephen R. Bough gave his final approval Thursday to settlement agreements struck by big brokerages in class-action commission lawsuits, granting broad immunity from claims by sellers that these companies conspired on rules that inflated real estate compensation at the expense of consumers.

The ruling does not include a settlement struck by the National Association of REALTORS® (NAR), which will receive a separate hearing in front of Bough in November before being finalized.

Notably, the brokerages also appeared to have won a major victory in gaining some limited immunity from buyer-side commission lawsuits.

The firms agreed to policy changes, such as no longer requiring agents to be members of the National Association of REALTORS®, or follow their code of ethics or MLS Handbook. Also moving forward, each brokerage will mandate, or strongly encourage agents to remain utterly transparent in relaying that commissions are, in fact, negotiable, while having the ability to set commissions, or negotiate as they deem appropriate. Agents will not be required to make or accept offers of compensation from transaction-associated brokers.

“Settling defendants have denied any liability, fault, or wrongdoing of any kind in connection with the allegations in the actions, and as such, neither the settlements, nor any of their respective terms or provisions, nor any of the negotiations or proceedings connected with the settlements shall be construed as an admission or concession of the truth of any of the allegations, or of any liability, fault, or wrongdoing of any kind by settling defendants,” wrote Judge Bough in recent settlement ruling paperwork.

Top Agent Network

A pocket listing startup suing the National Association of REALTORS® (NAR) is seeking to push forward with its claims that the Clear Cooperation policy violates antitrust laws, asserting that its business model addresses a “superfluity of ineffective agents” in a case with potential impacts beyond the NAR settlement.

In a 17-page filing in a California federal court, lawyers for Top Agent Network (TAN)—a San Francisco-based pocket listing startup that first sued NAR (along with the San Francisco Association of REALTORS®) back in 2021—urged a judge to allow their case to move forward mostly based on a ruling in a parallel case, in which another alternative listing service (known as PLS.com) eventually settled claims with NAR-affiliated MLSs.

“Both TAN and The PLS.com allege that there is no plausible procompetitive justification for the (Clear Cooperation) Policy…both allege that the Policy has injured competition in the market for property listing services sold to real estate professionals, and that this injury has harmed TAN/PLS.com by restricting their supply of property listings and available customers” the filing reads.

TAN is seeking damages, as well as a court order banning the Clear Cooperation policy. None of the commission-case settlements so far have resulted in any changes to this policy—though Clear Cooperation is one of several rules targeted by the Department of Justice (DOJ) in its scrutiny of NAR and the real estate industry.

Plaintiffs v. Real Estate Board of New York (REBNY) amend complaint

Plaintiffs Monty March and Linda Pratka—who filed an antitrust class-action lawsuit against the Real Estate Board of New York (REBNY) on November 13, 2023—have amended their complaint, including new allegations, while comparing the recent NAR settlement, and issued rule changes with those of the Manhattan-based company. REBNY allegedly mandates that “a Seller Broker and a Buyer Broker divide and share a relevant commission to the detriment of the Seller.”

REBNY disassociated with NAR in 1994, and is a member of the Manhattan-based RLS listing service, “that provides information to the Residential Brokerage Division of the Real Estate Board of New York member firms and their agents.”

Although, in the wake of NAR’s—at the time, potential settlement—REBNY issued various UCBA rule changes on January 1, which differ from other MLSs associated with NAR.





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