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A Texas broker is the latest to take aim at the National Association of Realtors’ divisive three-way agreement, a rule that requires agents to belong to local, state and national Realtors associations in order to access the multiple listing service.
Luz de Amor Eytalis filed the lawsuit Monday in the U.S. District Court for the Northern District of Texas, naming NAR, the Texas Association of Realtors, Wichita Falls Association of Realtors and Paragon MLS Connect.
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Eytalis charged that rules requiring agents to join all three associations amount to an antitrust violation and that the defendants “engaged in monopolistic practices that unlawfully restrict competition in the real estate market.”
“Brokers must ‘purchase’ association memberships they may not need or want to obtain MLS services,” Eytalis wrote. “This structure has created an anti-competitive monopoly over MLS services, limiting the market’s ability to support alternative trade organizations, thereby stifling competition in violation of the Sherman Act.”
Eytalis said the rule amounts to an illegal “tying agreement.”
“It’s all a money grab,” she told Inman in a call on Tuesday. “We need to be focused on doing a better service for our clients [and] achieving the goals that we’re supposed to be achieving, which is to sell real estate. That’s the bottom line. We’re here to sell real estate, not to take classes and pay dues and fees and fill out more forms.”
Eytalis, who operates her brokerage Strategic Realty in Texas and Oklahoma, said the three-way agreement restricts competition and options for agents who want to work for her brokerage but don’t want to be Realtors.
“I can only sponsor Realtors. That’s the problem,” she said. “If somebody wants to join Strategic Realty they have to become Realtors. Not all real estate agents want to become Realtors.”
Eytalis filed her complaint pro se, which means she is currently representing herself. She said she was committed to fighting the lawsuit, and that she would continue paying her membership dues so that she can stay in business while challenging the agreement.
She alleged unjust enrichment, breach of contract and discriminatory practices and asked the court to issue $5.8 million in damages, unspecified restitution and punitive damages.
Eytalis said she came up with that figure because she makes about $1 million per year in commissions.
She had followed the similar lawsuits filed in three other states — Michigan, Pennsylvania and California — and used them to guide her complaint.
“I had all these other filings that I could basically copy off of,” she said. “I figure the more the merrier at this point.”
Representatives from NAR, TAR and WFAR didn’t immediately respond to a request for comment about the new filing. Paragon MLS Connect is a technology platform that powers MLSs like the Wichita Falls Association of Realtors MLS.
NAR has recently shown support for maintaining the current membership arrangement, including in a speech CEO Nykia Wright gave at NAR NXT earlier this month.
“Some of you have heard rumblings of the challenging of the three-way agreement,” Wright said during a board of directors meeting at the conference. “Well, we are here to make sure that those rumblings subside because it is our duty to make sure that people understand what happens at the local level, the state level and the national level, and really make sure that people understand that there isn’t a cannibalization of services, but it really is working together … to make things work.”
Eytalis asked the court to declare that the agreement violates antitrust laws, and she asked the court to require the defendants to create an alternative MLS system that doesn’t require multiple memberships to access.
“These practices disproportionately affect minority professionals and have resulted in inequitable enforcement of rules and exclusion from fair competition in the real estate industry,” Eytalis wrote.
