Real Estate Brokerages Caught in Legal Limbo
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Brokerages Remain in Limbo
Several real estate brokerages remain in limbo a month after a June 18 deadline for firms seeking to opt into the National Association of Realtors’ $418 million commission settlement agreement. Inman has learned.
Irrebuttable Presumption
JohnHart Real Estate in California, ARC Realty in Alabama, and Nebraska Realty all confirmed with Inman that they had been included in a court-approved list of brokerages with $2 billion or more in residential sales transaction volume in 2022 following their inclusion in the 2023 Real Estate Almanac, an annual report compiled by the firm T3 Sixty that tracks various real estate metrics.
However, brokerage leaders described being trapped in a legal maze after it was ruled this year that sales figures published in the Almanac would be considered an "irrebuttable presumption" of the brokerages’ total transaction volume for 2022. The legal term describes a set of facts deemed in the eyes of the court to be true, even if contradictory evidence emerges later on.
Disputing the Data
"We weren’t even at the $2 billion" threshold, JohnHart Real Estate General Counsel Brittany Porter told Inman. Porter couldn’t explain the discrepancy with the data but said T3 Sixty told her Wednesday it would issue a correction.
Background of the Settlement
According to the settlement agreement, brokerages that transacted less than $2 billion in residential sales volume in 2022 would be covered legally. The more than 90 firms that closed in excess of $2 billion that year would need to opt into the settlement, opening themselves up to millions of dollars in additional legal costs.
Opting In or Out
For brokerages not automatically covered by the deal, they have two options: pay a fee based on their transaction volume or participate in a non-binding mediation with the plaintiffs’ attorneys.
Complications and Disputes
Some brokerages, including JohnHart Real Estate, ARC Realty, and Nebraska Realty, are disputing the data. They claim that the sales figures in the Almanac are incorrect and should not be used to determine their coverage under the settlement.
Conclusion
With attorneys for both sides unsure how to proceed, it’s not yet clear how the matter will be resolved. The outcome will likely impact the future of the real estate industry and the thousands of agents and brokers involved.
FAQs
Q: What is the National Association of Realtors’ $418 million commission settlement agreement?
A: The agreement is a settlement reached between the National Association of Realtors and a group of homesellers who claimed the association and its member brokers failed to properly compensate them for commission payments.
Q: What is an "irrebuttable presumption"?
A: An irrebuttable presumption is a legal term that describes a set of facts deemed in the eyes of the court to be true, even if contradictory evidence emerges later on.
Q: What are the two options for brokerages not automatically covered by the settlement?
A: Brokerages have two options: pay a fee based on their transaction volume or participate in a non-binding mediation with the plaintiffs’ attorneys.
Q: Can brokerages dispute the data used to determine their coverage under the settlement?
A: Yes, some brokerages, including JohnHart Real Estate, ARC Realty, and Nebraska Realty, are disputing the data used to determine their coverage under the settlement.
Q: How will the matter be resolved?
A: The outcome is currently uncertain, and attorneys for both sides are unsure how to proceed. The dispute will likely be resolved through mediation or further litigation.
Author: www.inman.com
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