Clear Cooperation Controversy: Class Action Against NAR Gains Momentum

Lisa Mailhot  |  October 14, 2024

Buyers

Clear Cooperation Controversy: Class Action Against NAR Gains Momentum

 

The real estate industry is buzzing as the American Real Estate Association (AREA) challenges the National Association of Realtors (NAR) Clear Cooperation Policy. This policy requires listing brokers to submit a listing to their multiple listing service (MLS) within one business day of publicly marketing a property. But with many agents claiming they've been "fined or otherwise harmed" by this rule, a potential class action lawsuit may be in the works. Here’s what you need to know about the debate, its implications, and how it could reshape real estate practices.

Understanding the Clear Cooperation Policy

The Clear Cooperation Policy was introduced by NAR to ensure fairness and transparency in real estate transactions. It mandates that brokers must submit any publicly marketed listing to the MLS within a day. The intent is to prevent "pocket listings," where agents keep properties off the MLS to privately market them to specific buyers.

However, the policy has sparked significant backlash. As AREA explains, many real estate professionals feel the rule restricts their ability to market listings as they see fit and, in some cases, has led to substantial fines.

“Many real estate professionals and homeowners have expressed how this policy has negatively impacted them, from fines to compromised client relationships,” the American Real Estate Association shared in a recent email.

The Push for Class Action: What's at Stake?

On October 10, 2024, the AREA began reaching out to agents who have felt penalized by the Clear Cooperation Policy, encouraging them to join a collective action. According to AREA, the response has been strong, with many agents expressing frustration over fines ranging from $800 to $5,000.

“If you have been fined or otherwise harmed by the Clear Cooperation Policy, you may be eligible to join a class action lawsuit against NAR,” AREA announced, emphasizing the growing dissatisfaction within the industry.

This move follows AREA's recent petition, which gathered over 4,800 signatures, calling for the policy's removal. The organization believes that the petition's popularity highlights a significant desire for change within the industry.

A Growing Divide in the Real Estate Community

The class action call has deepened the divide between NAR and its rival, AREA. While NAR maintains that its policies are designed to benefit both members and consumers, AREA argues that many agents find the policy restrictive and detrimental to their business.

“A one-size-fits-all policy is just dated. People don’t think that way now,” commented Jason Haber, co-founder of AREA. “It’s time for more flexibility in how listings are managed.”

In response, a spokesperson for NAR stated that the organization is actively listening to feedback and will review the policy during its upcoming MLS Technology and Emerging Issues Board meeting in late October. However, they have yet to comment on the potential litigation.

Why This Matters for Agents and Sellers

The outcome of this dispute could reshape how listings are handled across the industry. If the AREA succeeds in challenging the policy, agents may have more freedom in how they market listings. For sellers, this could mean more options in how their properties are advertised and sold, especially in cases where privacy or price testing is crucial.

For now, AREA is focused on gathering feedback from affected agents, and while no legal action has been taken yet, the possibility of a class action looms large. As the petition and discussions continue, all eyes are on NAR’s next moves and how they will respond to the calls for change.

Bottomline

The battle over NAR’s Clear Cooperation Policy is heating up, with a potential class action lawsuit on the horizon. If you’re a seller looking for more flexibility in marketing your property or an agent seeking a fresh approach, let's connect.

 

 

Reference: Brambila, A. V. (2024, October 10). NAR Rival Seeks Agents for Possible Class Action Over Clear Cooperation. Inman.

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