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California real estate broker is suing the National Association of Realtors (NAR) and local associations, claiming that membership fees are anticompetitive and have a significant impact on independent brokerages. The lawsuit alleges that NAR's fee structure places an unfair financial burden on agents and brokers, leading to many choosing not to participate in the industry.

    The complaint was filed by John Diaz, who operates a residential brokerage in Modesto, California. Diaz claims that the combined membership fees for four associations total over $1,000 per year, making it difficult for real estate professionals to remain active in the market. He estimates that thousands of agents in California and tens of thousands nationwide are unable to associate with brokers due to these fees.

    The lawsuit also challenges NAR's Variable Dues Formula, which requires brokerages to pay dues for non-Realtor licensees, even if they don't need access to the MLS. This system is alleged to give larger brokerages an advantage over smaller ones, as they can afford to hire staff without paying member dues. The result, according to Diaz, is a "chilling effect on independent brokerages and a suppression of alternative business models."

    This lawsuit is part of a growing trend of cases challenging mandatory membership requirements in the real estate industry. Other active lawsuits are currently underway in Georgia, Michigan, Texas, Pennsylvania, and Louisiana.