realestate

Allegations of Deceptive Practices in Membership Scheme Emerge

Real estate agents sue NAR, claiming membership offers no benefits; 8 defendants dismissed in Georgia commission case.

T
he real estate industry's focus on the NAR and HomeServices of America settlement hearings in Kansas City next week may be overshadowed by other high-impact cases playing out in courts across the country. A potential next big battle could revolve around "forced membership," where agents are required to pay dues to local, state, or national associations – often all three – to access multiple listing services (MLS).

    Cases challenging mandatory membership rules are ongoing in Michigan and Pennsylvania, while a California case was dismissed but may be refiled soon. In Michigan, plaintiffs have expanded their lawsuit against the National Association of Realtors and several other defendants, alleging that mandatory memberships violate antitrust laws and unfairly restrict trade. The amended complaint claims agents and brokers are forced into deceptive compensation practices and that associations no longer provide benefits justifying membership fees.

    If successful, overturning mandatory membership rules could lead to more turmoil in an industry already reeling from the NAR settlement. However, some associations are proactively updating their policies: Phoenix Realtors recently introduced MLS Choice, a lower-cost subscription option providing MLS access without requiring association membership. Meanwhile, eight defendants were dropped from a Georgia commissions case after several brokerages received final settlement approval in another lawsuit.

Business executives accused of deceptive membership scheme practices in a major city.