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The number of commission lawsuits seeking to up end the real estate industry’s status quo continued to pile up this week as a new group of homesellers in Texas began a case against a group of Realtor associations, multiple listing services and brokerages.
Homesellers Julie Martin, Mark Adams and Adelaida Matta filed the case Thursday in the United States District Court for the Eastern District of Texas. The case claims various real estate entities violated antitrust laws and engaged in a “conspiratorial scheme” by requiring sellers and their brokers to offer compensation to buyers’ agents.
The case has an extensive list of dozens of defendants, including the Texas Association of Realtors, the Austin Board of Realtors, the San Antonio Board of Realtors, the MetroTex Association of Realtors, the Houston Association of Realtors, and numerous other Realtor associations.
The case also names as defendants multiple listing services Austin/Central Texas Realty Information, Houston Realtors Information Service, North Texas Real Estate Information Systems and others.
Local and national real estate companies also appear on the list of defendants, including Keller Williams, Heyl Group Holdings, Dave Perry-Miller Company, the Loken Group, the Hexagon Group and others.
The case is seeking class-action status on behalf of everyone who listed a house on a multiple listing service in the state of Texas between the present and either Dec. 13, 2019, or Nov. 13, 2019. The complaint includes both dates, and Inman has reached out to attorneys in the case to clarify which the plaintiffs intended.
The claims mirror those in numerous other commission-based antitrust cases, some of which have been in litigation for years and others of which were only just filed this fall.
The most prominent of those other cases is known as Sitzer | Burnett and went to trial in October. A jury in the case ultimately sided with the homeseller-plaintiffs, agreed that the National Association of Realtors and various major franchisors had conspired to keep costs and commissions high. The jury awarded the plaintiffs billions, though NAR and the other defendants have vowed to appeal.
The Sitzer | Burnett verdict unleashed a flood of similar cases, including a previous one filed in the same Texas federal court as the new lawsuit. The new case’s proposed class, location and time period are the same as the previous Texas suit, known as QJ Team.
Many of the defendants are also the same in both lawsuits, though the plaintiffs in the earlier case — Texas-based homebuilder QJ Team LLC and holding company Five Points Holdings — are not individual people but rather companies that have sold homes.
How exactly the many commission lawsuits currently in litigation play out remains to be seen. The October verdict in Sitzer | Burnett sent shock waves through the real estate industry and led to speculation that buyers’ agents could become more rare, or that agent pay could experience downward pressure.
On the other hand, a number of major industry executives have pushed back on apocalyptic forecasts. During various earnings calls last month, they pointed out that already sellers aren’t required to offer buyers’ agent commissions in some places, yet the absence of such a requirement has not radically changed those markets.
Either way, right now all eyes are on NAR — which is mentioned in the new Martin complaint but not named as a defendant — and how it plans to appeal the Sitzer | Burnett verdict while also handling an ever growing number of similar cases.
Read the complaint in the new Martin antitrust commission lawsuit here:
Update: This post was updated after publication to reflect that the complaint includes conflicting dates regarding case’s request for class status, and to reflect that the plaintiffs in the previous Texas case are companies, but also homesellers.
