RE/MAX paying $55M to settle brokerage commission lawsuits

Brokerage also agrees to change its business practices

RE/MAX Agrees To Settle Brokerage Commission Lawsuits
RE/MAX's Nick Bailey (RE/MAX, Getty)

RE/MAX will cough up an eight-figure sum to extricate itself from two class-action lawsuits over agent commission payments.

The company agreed on Friday to pay $55 million to settle the claims filed in Kansas City and Chicago, according to a document filed with the Securities and Exchange Commission.

If approved by the judges in each case, the settlement would remove RE/MAX from the landmark lawsuits without holding the company responsible for claims outlined in them.  The lawsuits, known as Sitzer/Burnett and Christopher Moehrl, allege the brokerages violated the Sherman Antitrust Act by colluding with the National Association of Realtors to inflate commissions paid by home sellers.

The agreement also commits RE/MAX to making “certain changes to its business practices,” according to the SEC document filed Monday. Among the changes is to no longer require sellers to pay buyer’s agents’ commission, Michael Ketchmark, one of the lead attorneys in the Sitzer/Burnett told Inman.

A spokesperson for the company denied the allegations in the lawsuits and noted that the agreement was reached “after carefully considering the significant risks and costs associated with continued litigation,” according to an emailed statement.

“The settlement paves the way for a clear path forward for the RE/MAX brand, its franchisees and its agents, removing the uncertainty of ongoing litigation related to these cases,” the spokesperson wrote.

Attorneys for the plaintiffs in each case did not immediately respond to requests for comment.

Other brokerages named as defendants include Keller Williams, Anywhere Real Estate and HomeServices of America, along with the National Association of Realtors.

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Anywhere, the parent company of Corcoran, Coldwell Banker, Century21 and Sotheby’s International Realty, agreed this month to pay $83.5 million to settle the lawsuits. The firm also agreed to stop mandating sellers pay commissions for the buyers’ agents.

Last month, attorneys for NAR filed four requests with the U.S. District Court in Western Missouri — the jurisdiction of the Sitzer/Burnett case — to suppress evidence associated with discrimination and government investigations.

A three-week jury trial for the Sitzer/Burnett case, the smaller of the two actions, is scheduled to start Oct. 16.

A federal appeals court denied a May request from the defendants in the Moehrl case to overturn its class certification. The judge has not yet set a trial date.

The latest development in the antitrust lawsuits come as NAR is facing a reckoning over misconduct among its leadership and various policies.

Kenny Parcell resigned as president of the trade group in August following an investigation by the New York Times that involved accusations of sexual harassment from three women. 

The U.S. Court of Appeals also ruled last month to bring back a lawsuit related to pocket listings. The lawsuit claims the trade group and two other associations violated antitrust laws by mandating listing brokers submit a property to their MLS within one day of marketing a home.

Earlier this summer, the Department of Justice took steps to relaunch its probe into NAR. The agency filed an appeal brief in June arguing against a January court decision that barred it from reviving its investigation into the trade group’s policies on pocket listings and broker commissions.

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