Federal officials have turned an eye to real estate listings and commission practices in New York, according to a report from the New York Times.
The Real Estate Board of New York, a real estate group with broad membership, has received subpoenas from the New York Attorney General’s Office and the U.S. Federal Trade Commission’s regional office in New York, the Times reported. Officials at both offices had no comment about the actions.
Members of the Real Estate Board, known as REBNY (pronounced REB-nee), include residential and commercial real estate brokers; property owners, builders and managers; banks, financial services companies, utilities, lawyers, architects and contractors, among other professionals working in real estate-related fields.
While the vast majority of real estate agents and brokers across the country are members of local, state and national Realtor associations, REBNY is a separate, unaffiliated organization.
Steven Spinola, REBNY president, was not immediately available for comment today about the information requests by state and federal agencies. The New York Times reported that the agencies requested information relating to “setting commissions” and “the establishment of a multiple listing service in New York City.”
REBNY in 2003 year adopted a policy that requires mandatory sharing of exclusive Manhattan listings with other REBNY-member brokerage firms within 72 hours, and REBNY also established its own property-listing service. REBNY members include some of the largest real estate brokerages operating in the New York City market, among them Douglas Elliman and The Corcoran Group.
Still, critics have charged that REBNY members are not doing enough to promote a more open real estate market for consumers in New York City.
LaLa Wang, owner of a real estate services company called BrokersNYC, filed a lawsuit last year charging that REBNY has worked to monopolize property listings information in New York City and limit the technology platforms used in handling property listings information. She had advocated for greater openness in the sharing of property listings information with consumers.
Wang said today, “I think it is appropriate that the FTC take a look into New York real estate. I think consumers are being harmed and made to pay the price of unnecessarily expensive transactions. There has been a chilling effect on innovation that could make the lives of consumer and independent brokers much more easy.”
The Manhattan Association of Realtors, a local group affiliated with the National Association of Realtors, has not received any contact from state or federal agencies about commission and MLS issues, said the group’s executive, Laura Rubinfeld.
“No subpoenas have been received nor are any expected. We have been a force for change in Manhattan since our founding and we will continue our efforts to bring the broadest exposure possible to Manhattan listings,” Rubinfeld said. The local association, established in 2001, also operates an MLS.
David M. Michonski, CEO of Coldwell Banker Hunt Kennedy in New York City and former president for the Manhattan Association of Realtors, also said that the Manhattan association and the association’s MLS “do all their business in complete compliance with the FTC and New York law” and “we welcome anyone looking into our practices as we think they are the model for how business should be done in New York.”
The reports of the state and federal actions in New York follow other federal actions relating to alleged antitrust activities in the real estate industry. The U.S. Department of Justice, for example, is suing the National Association of Realtors over policies related to the sharing and display of online property listings information, and the Justice Department and Federal Trade Commission have also taken actions this year to oppose industry-backed state measures that could limit competition or consumer choice in the real estate industry.
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