Key Details:
- On Monday, October 28, law professor Tanya Monestier filed a 136-page objection to the NAR settlement.
- She argues the settlement reinforces the traditional structure of inflated, seller-paid commissions, creating only an “illusion of change” rather than meaningful reform.
- Monestier also criticizes the $333 million attorney fee request, stating it prioritizes attorney profit over consumer relief.
In a 136-page filing, University of Buffalo law professor Tanya Monestier has stepped forward as a home seller, objecting to the settlement agreed to by the National Association of Realtors (NAR). While the case is set for final approval on November 26, Monestier argues the settlement not only falls short but leaves consumers in a worse position.
Since the NAR settlement was announced in March, Monestier has been vocal in her criticism of new buyer-broker agreement forms. Now, she’s formally objecting to the proposed settlement terms.
Monestier describes the settlement as “the worst of all possible worlds,” arguing that it reinforces the existing structure of inflated, seller-paid commissions with Realtor “workarounds.” She also believes it obscures the original intent with added paperwork, legal jargon, and logistical chaos.
But the practice changes of the settlement aren’t Monestier’s only objections—she also comes after attorney fees.
In her introduction, Monestier states:
“I am a member of the settlement class in Burnett v. National Association of Realtors and am filing this objection to urge you to disapprove the settlement reached by Plaintiffs and Defendants and to reject the Plaintiffs’ application for approximately $333,000,000 in attorneys’ fees.”
Below, we dive into Monestier’s arguments.
Monestier’s Objection to the NAR Settlement
Monestier states that the implementation of the NAR settlement “has been a disaster.”
While on paper, it proposes to eliminate steering, Monestier claims it falls short: “It has not eliminated steering. It has not resulted in lower commissions…It has led to widespread confusion and the exploitation of consumers.”
According to Monestier, the “settlement fails to provide for meaningful decoupling and continues to facilitate steering, thereby holding sellers like me to industry norms of paying both sell-side and buy-side commissions.”
Her objection to the practice changes includes the following six arguments:
- “MLS participants are already breaching the settlement agreement en masse and creating so called ‘workarounds.’”
- “MLS participants are engaging in anti-consumer practices in response to the NAR settlement that prejudice members of the plaintiff class (sellers) as well as buyers.”
- “The settlement has caused mass confusion in the real estate industry. This confusion is not just temporary “growing pains” confusion. It is what happens when a settlement that is crafted by lawyers behind closed doors is imposed as a form of regulation on industry participants and consumers.”
- “The settlement has logistical ambiguities that have not been worked out. These deficiencies contribute to the mass confusion and workaround problem. NAR and the Plaintiffs are aware of these ambiguities and have not stepped in to address them.”
- “The settlement does not contain a legitimate and viable enforcement mechanism.”
- “The value of the practice changes is grossly overstated because it rests on erroneous assumptions.”
Seven Industry “Workarounds”
Monestier provided seven examples of workarounds in her filing. She believes that agents and brokers are already using these to sidestep the settlement’s guidelines.
Here are the workarounds included in Monestier’s filing:
- Amending the buyer representation agreement to enable the broker to receive additional compensation.
- Asking the buyer to agree to seller-paid bonuses.
- Using “touring” or “showing” agreements that are later supplemented by full buyer representation agreements.
- Including provisions to guarantee a minimum level of compensation up to a maximum amount.
- Buyer brokers waiving their commission.
- Using provisions that imply the agent will accept any compensation offered by the cooperating broker.
- Tailoring the buyer representation agreement to match seller-offered compensation.
$333 in Attorney Fees: “A Windfall for the Attorneys”
Monestier’s objection isn’t limited to the settlement’s business practice changes. She also challenges the plaintiffs’ attorneys’ request for one-third of the total settlement— or $333 million in fees plus $16 million in expenses.
With settlements as large as this one, Monestier states that “Any amount greater than 10-15% percent would constitute an unwarranted windfall and would be grossly disproportionate to the ‘relief’ provided to class members.”
In her objection, Monestier calculates that class members could receive just $20 to $25 each, a figure she calls “not even enough money to buy a pizza.” Monestier describes the plaintiffs’ attorneys as treating the case like a “lawyer-driven litigation.”
She argues that the high attorney fees compared to the small consumer payouts highlight the settlement’s flawed nature. Her objection goes so far as to state that if the court approves the settlement, it should “disapprove the exorbitant request for attorneys’ fees” as a matter of public trust in the legal profession.
The DOJ’s Involvement
In addition to her court filing, Monestier has involved the Department of Justice (DOJ) in her case. She presented a 41-page memo outlining her concerns to DOJ officials, explaining the “workarounds.” Following that, she spoke via Zoom with people from the DOJ.
Real estate professionals should monitor these developments closely, as the filing may lead to greater DOJ involvement, which could result in regulatory changes.
Monestier’s objection has introduced pressure on the court to reconsider the settlement’s terms. Her final plea underscores her stance: “Unless someone speaks up, this Court is likely to be convinced that this settlement is ‘fair, reasonable, and adequate.’ It is not.”
Read Monestier’s filing in full here.
