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Federal Appeals Court Allows DOJ to Reopen Antitrust Probe of National Association of Realtors

 |  April 7, 2024

A federal appeals court in Washington, DC, has ruled in favor of the Justice Department, granting it the authority to resume an antitrust investigation into the practices of the National Association of Realtors (NAR), reported Politico.

Judge Florence Pan, in a 21-page opinion released on Friday, asserted that a prior closing letter from the government does not preclude the reopening of the investigation. She emphasized that the letter did not contain any explicit provisions barring such actions, rebuffing claims made by the NAR. However, Judge Justin Walker dissented from the majority opinion, highlighting concerns about the sovereign rights of the United States.

The Justice Department’s investigation has centered on the compensation structure for real estate agents, a system that critics argue leads to inflated housing costs and constitutes illegal price-fixing. This ruling paves the way for a comprehensive probe into the practices of the nation’s largest trade group, adding to its legal challenges.

Related: DOJ Wants National Association Of Realtors Probe Revived

Recently, NAR agreed to settle multiple lawsuits by agreeing to pay $418 million in damages and abolishing a rule central to the commission system prevalent in the housing market. Despite this settlement, the association remains entangled in legal battles, with the DOJ investigation looming large.

Reacting to the court’s decision, NAR spokesman Mantill Williams stated that the association is assessing its options. “NAR believes that the government should be held to the terms of its contracts,” Williams remarked, indicating that the association is considering its next steps in light of the ruling.

At the heart of the controversy lies NAR’s “cooperative compensation” policy, which mandates sellers’ agents to offer compensation to buyer brokers to access the Realtors’ Multiple Listing Service, a platform widely used in the real estate industry. Critics argue that this policy perpetuates high commission rates, contributing to the escalation of housing costs.

Source: Politico