A federal judge today promptly issued preliminary approval to the landmark settlement agreement struck last month between the National Association of REALTORS® (NAR) and a class of recent homesellers, a major, if expected step toward finalizing a deal that will see NAR pay $418 million and make major changes to policies and practice.
Judge Stephen R. Bough, who oversaw the Burnett case, scheduled a final approval hearing for November, while finding that the agreement—which requires compensation be removed from NAR-affiliated MLSs and makes buyer agency agreements mandatory—to be “fair, reasonable and adequate.”
Bough’s approval comes only four days after plaintiffs initially requested the agreement receive an initial ratification, which also kicked off a 60-day grace period for those aforementioned big brokerages to pay up and opt in.
Recent homesellers across the country are now “preliminarily enjoined from filing, commencing, prosecuting, intervening in, or pursuing as a plaintiff or class member any claims against NAR” or other entities included in the settlement, which include most small and mid-size brokerages, with the option for larger companies to pay an additional fee and opt in.
The official approval marks the beginning of a still uncertain path for the industry as a whole to put a major threat in the rearview mirror, even as other legal issues continue to loom, including buyer lawsuits and a Department of Justice (DOJ) investigation.
NAR’s settlement only includes immunity from seller claims related to commissions, and separate but similar accusations from buyers continue to advance in court.
And the DOJ has the power to intervene before the hearing is finalized, something it already did in another preliminary commission-case settlement, which has resulted in that agreement being placed on hold.
Anyone who objects to the settlement also has the right to be heard in writing, but must submit that objection in writing within 60 days of receiving notice of the agreement. Anyone who is part of the class can still opt out and pursue their own legal case as well.
Although the two seller lawsuits covered in the agreement only included a handful of MLSs as part of their classes, Bough certified a nationwide class, which would seemingly nullify all the copycat cases that have popped up around the country (at least those filed by sellers that name NAR or affiliated entities).
In asking for the approval, lawyers for the plaintiffs empathized that negotiations had been “hotly contested” and dragged out over almost four years.
A final hearing on settlement agreements by three other companies named in the seller suits are occurring separately, just over two weeks from now on May 9.
