A major U.S. realtor group has agreed to implement rule changes and pay out a multi-million dollar settlement to homeowners, ending a four-year class-action lawsuit regarding broker commissions, a landmark outcome that is giving hope to lawyers pursuing a similar action in Canada.
On Friday, the National Association of Realtors (NAR) agreed to a US$418 million settlement to resolve all claims against the group by home sellers’ for artificially inflating real estate commissions. This agreement is still subject to court approval.
Garth Myers, a partner at Kalloghlian Myers LLP, the firm behind the Canadian commission lawsuits against CREA and local real estate boards, believes this development could strengthen Canadian home sellers’ case.
“Along with agreeing to compensate sellers, NAR’s agreement to put in place a new rule prohibiting offers of broker compensation on the MLS shows that this requirement was never necessary in the first place,” Myers said in an email. “This will no doubt help Canadian home sellers in proving that equivalent rules in Canada are an illegal form of control on buyer brokerage commissions.”
According to the U.S. settlement terms, NAR is barred from creating rules that would permit a seller’s agent to determine compensation for a buyer’s agent. The agreement also requires the removal of fields on MLS that display broker compensation and prohibits the mandate for agents to subscribe to MLS in…
