BAM Key Details:
- Home sellers in both Pennsylvania and Florida filed class action commission lawsuits on Monday, December 4th.
- The plaintiffs in both allege that the defendants enforced the buyer-broker commission rule, unfairly forcing sellers to pay for buyer-agent commissions.
Two new commission lawsuits have been filed—this time in Pennsylvania and Florida.
In one, a group of Pennsylvania home sellers allege that West Penn MLS, along with several local brokerages, enforced the cooperative compensation rule throughout Western Pennsylvania, forcing sellers to offer compensation to buyer agents.
In the other, Parker Holding Group makes similar allegations against the Florida Association of Realtors and 16 large brokerages.
Both cases were filed on Monday, December 4th. Here’s what we know so far.
The Pennsylvania lawsuit
In Pennsylvania, the proposed class action lawsuit was filed by a group of home sellers:
- Spring Way Center
- John and Nancy Moratis
- Nancy Wehrheim
Spring Way, a limited liability company, sold a home in September 2023. The other plaintiffs sold homes in 2021.
The plaintiffs are seeking class certification. If granted, the class would include anyone who
- sold a home listed on West Penn MLS during the past four years
- was aided by one of the brokerages named as defendants, and
- paid a commission to the buyer agent
As one of the defendants, the lawsuit names West Penn MLS, which is based in Pittsburgh and serves approximately 9,000 members.
Other defendants include—
- Berkshire Hathaway HomeServices
- The Preferred Realty
- Coldwell Banker Realty
- Piatt Sotheby’s International Realty
- NextHome PPM Realty
- Realty One Group Gold Standard
- Realty One Group Platinum
- Realty One Group Horizon
The suit also named a variety of co-conspirators, including the Pennsylvania Association of Realtors.
This is not the first time West Penn MLS has been the subject of a lawsuit.
Two other lawsuits—one filed in 2009 by the Federal Trade Commission (FTC) and the other filed in 2010 by a home seller—alleged the MLS was engaging in anticompetitive practices.
According to the FTC complaint, the MLS’s rules “effectively barred brokers who offered ‘unbundled,’ flat-rate, or otherwise innovative service packages from becoming subscribers.”
In that case, the parties reached a settlement, with West Penn agreeing to change its policy.
In the 2010 case, a home seller filed a class action antitrust lawsuit, alleging that the MLS’s rules restricted competition among real estate agents. The specified class included homeowners who hired agents from four discount brokerages while those anticompetitive rules were still in effect between 2005 and 2009.
The parties settled that case, too, with West Penn paying the plaintiff $2.38 million in damages.
The Florida lawsuit
Parker Holding Group, a Panama City-based company that sold homes in March and August 2021, filed the Florida suit in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida.
The named defendants include the Florida Association of Realtors–-the largest state Realtor association in the country with 280,000 members—and 16 large brokerages:
- The Keyes Company
- LPT Realty
- Charles Rutenberg Realty
- Charles Rutenberg Realty – Orlando
- United Realty Group
- The K Company Realty
- Florida Homes Realty & Mortgage
- Dalton Wade
- Avanti Way Realty
- MVP Realty Associates
- Florida Realty of Miami
- Lifestyle International Realty
- Watson Realty
- Premiere Plus Realty
- Future Home Realty
- Michael Saunders & Company
As with the Pennsylvania suit, the Florida plaintiffs allege a conspiracy among the defendants to enforce anticompetitive practices that require sellers to pay inflated commissions.
Per the complaint, that requirement imposed on home sellers violates the Florida Antitrust Act of 1980 as well as the Florida Deceptive and Unfair Trade Practices Act.
Stay tuned for more as the cases develop.