It seems that no actual property brokerage agency within the U.S. is protected from a fee lawsuit. On Wednesday, Manhattan dwelling vendor Monty March filed a lawsuit in U.S. District Court docket within the Southern District of New York, alleging that Actual Property Board of New York guidelines governing the a number of itemizing service in Manhattan stored commissions excessive and violated state and federal antitrust legal guidelines.
Along with REBNY, the sturdy checklist of defendants consists of: Actual Property Board of New York Itemizing Service, Brown Harris Stevens, Christie’s Worldwide Actual Property, Coldwell Banker, Compass, Core Advertising and marketing Providers, The Corcoran Group , Douglas Elliman, Elegran, Engel & Volkers, Fox Residential Group, Halstead Actual Property, Homesnap, Keller Williams NYC , Leslie J. Garfield & Co, Stage Group, M.N.S. Actual Property, Fashionable Areas, The Company, The Modlin Group, Nest Seekers Worldwide, Oxford Property Group, R New York, RE/MAX, SERHANT., Sloane Sq., and Sotheby’s Worldwide Realty Associates. Noticeably lacking from the checklist is the Nationwide Affiliation of Realtors.
The 105-page criticism takes goal at a REBNY Itemizing Service rule known as the Purchaser Dealer Fee Rule, which states that the brokers “shall every be paid an equal share of the fee as specified within the Unique Itemizing.”
Within the complaintant, March, who bought a house in Manhattan and is the one named plaintiff, states that REBNY’s Common Co-Brokerage Settlement pressured him to pay an allegedly inflated fee charge to the customer’s dealer.
“The inclusion of language in regards to the fee to be paid by the Vendor Dealer to the Purchaser Dealer within the itemizing settlement, generally often known as the Consumers Dealer Fee Rule, constitutes an antitrust violation below Part 1 of the Sherman Act and the Donnelly Act as there isn’t any separate negotiation/competitors in regards to the fee paid to the Purchaser Dealer,” the submitting reads. “The REBNY Itemizing Service’s fee rule fosters an surroundings wherein brokers work co-operatively to separate a complete fee as a substitute of open and separate negotiation. The anti-competitive nature of fee rule is obvious when in comparison with different international locations with aggressive markets for residential actual property brokerage providers.”
The lawsuit is searching for class motion standing, with the proposed class together with Manhattan dwelling sellers who labored with an agent from one of many defendants between Nov. 8, 2019, and the current.
In mid-October, REBNY introduced modifications to its guidelines, together with a rule stopping itemizing brokers from paying or providing to pay consumers’ brokers compensation. As a substitute, if a vendor needs to compensate the customer’s agent, they need to pay the agent themselves. It’s not required for a vendor to compensate a purchaser’s agent. The rule goes into impact on Jan. 1, 2024.
“We’re reviewing the criticism with our attorneys. In the mean time, we’re assured that RLS practices and procedures abide by all related legal guidelines,” a spokesperson for REBNY wrote in an e-mail.
HousingWire reached out to all 26 brokerage defendants within the lawsuit. Brown Harris Stevens, Christie’s Worldwide Actual Property, Homesnap, SERHANT., Compass, Keller Williams and Douglas Elliman all didn’t want to remark, whereas the others didn’t return a request for remark.