Appeals Court Grants Department of Justice Authority to Reopen Antitrust Probe into National Association of Realtors

Antitrust Probe into National Association of Realtors Reopened by Appeals Court

In a significant development, the Department of Justice (DOJ) has been granted the authority to reopen an antitrust probe into the National Association of Realtors (NAR) by an appeals court, overturning a previous decision by a lower court. The probe, which had been closed earlier, will now continue to investigate NAR policies related to the commission and the choices of home sellers.

Background

During the Trump administration, the NAR had settled with the DOJ, but the Biden administration decided to continue the investigation. However, a lower court had blocked their efforts in 2023. However, the recent court decision has ruled in favor of the DOJ, stating that the previous closure of the case does not prohibit its reopening, thus allowing the investigation into potential antitrust behavior to proceed.

Key Decision Highlights

The 2-1 decision by the District of Columbia Circuit Court of Appeals panel of judges has determined that the DOJ has the authority to reopen the investigation. Judge Florence Pan, in the majority ruling, stated, “In our view, the plain language of the disputed 2020 letter permits DOJ to reopen its investigation. We therefore reverse the judgment of the district court.”

Focus Area of Investigation

The issue at the center of this legal battle against NAR is the high commission rates on home sales borne by the buyer, which contribute to the soaring home prices that have made housing increasingly unaffordable for many.

Recent Settlement and Implications

In a recent development, the NAR reached a $418 million settlement with home sellers over commission rates. However, this serves as a separate agreement and does not hinder the ongoing antitrust investigation. The settlement underscores the increasing concerns over the exorbitant commission rates within the real estate industry.

DOJ’s Stance

In a statement by the DOJ, Assistant Attorney General Jonathan Kanter’s acknowledgement of the investigation holds significance: “[R]eal-estate commissions in the United States greatly exceed those in any other developed economy, and this decision restores the Antitrust Division’s ability to investigate potentially unlawful conduct by NAR that may be contributing to this problem.” The DOJ remains steadfast in its commitment to reducing the cost of buying and selling homes.

NAR’s Reaction

The NAR expressed disappointment with the court ruling and is currently evaluating its next steps. NAR spokesman Mantill Williams, in a statement to Politico, stated, “NAR believes that the government should be held to the terms of its contracts.”

Disclaimer

This article is for informational purposes only. The information provided does not constitute legal advice and should not be construed as such.