New NAR commission lawsuit, this time from home reno companies

The National Association of Realtors’ (NAR) commission lawsuit settlement agreement may have received final approval, but it looks like NAR’s commission lawsuit woes are not over.

On Tuesday, two Ohio-based companies that specialize in the acquisition, renovation and management of distressed real estate properties in Northeast Ohio, Abandoned Homes Project Scattered Site I LLC and Scattered Site II LLC., filed a suit against NAR, claiming that the trade group’s now abandoned Participation Rule, which required listing brokers to make a blanket offer of buyer broker compensation in order to list a property on the MLS, artificially inflated agent commissions.

Additionally, the plaintiffs claim that the rule prevented the negotiation of commissions between brokers, buyers, and sellers, and limited competition among real estate professionals.

According to the complaint, this practice resulted in significant financial harm to those who buy and renovate distressed properties, as the inflated commissions reduce funds available for community-focused projects.

The plaintiffs allege they have suffered over $75,000 in financial damages due to NAR’s policies, which they are asking the court to award in damages, plus interest on these damages and attorneys’ fees. The suit is not seeking class action status, and the plaintiffs made no demands for injunctive relief.

While the suit makes similar claims to that of the other commission lawsuits, it differs in that the plaintiffs are companies that buy and renovate houses and are not individual homebuyers or sellers.

According to a NAR spokesperson, the suit’s two plaintiffs opted out of the settlement NAR negotiated in the Sitzer/Burnett suit.

“We will respond to their claims in court,” the spokesperson wrote in an email.