Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
This weekend, the practice changes agreed to by the National Association of REALTORS® (NAR) last March, in its agreement to settle seller commission lawsuits, go into effect. The ever-practical agent community is likely laser focused on how to adapt their business to new MLS rules and buyer agreement requirements, but that doesn’t mean other legal issues for the industry are on hold. Last week, a regional buyer case hinted at a precedent-setting settlement, as national lawsuits filed by recent homebuyers still threaten the industry with hundreds of billions in damages. And just as the settlement changes go into effect, settlement notices are landing in the mailboxes of millions of people around the country, potentially sparking an awkward—but important—dialogue.
Here are the latest legal developments affecting real estate:
Chicago buyer lawsuit on track to settle
One of the few Burnett copycat suits filed by homebuyers rather than sellers could very soon provide an important roadmap for how these cases can resolve, as court filings last week indicated the case has reached “framework” for a settlement.
Details of that framework were not immediately released, but the stipulations of the potential agreement—everything from practice changes to payments—are sure to be closely watched as much larger buyer cases continue to threaten the whole industry and are mostly not covered by settlement agreements struck so far.
This case, known as Tuccori, is much different from the larger buyer suits, and names only one company—At World Properties, the parent of @properties Christie’s International Real Estate. Filed in December of last year, plaintiffs have made mostly the same allegations as other commission-focused lawsuits. At World Properties previously settled seller lawsuits.
Parties in the Tuccori case promised another update on settlement negotiations by October 5.
CoStar and Realtor.com trade blows in data-theft suit
Two portal giants, already bitter rivals as they publicly dispute each other’s web traffic numbers, remain tangled up in court over the theft and alleged usage of proprietary data by a former Realtor.com® employee now working for CoStar.
This week, both CoStar and Realtor.com’s parent company, Move, Inc., filed “supplemental” court briefs attacking each other over specific, mostly technical elements of the case, with CoStar accusing Move of dragging its feet in the proceedings, and Move claiming CoStar failed to provide information or make requests in a timely manner.
Both sides have accused each other of using the case to drum up media attention. Move is seeking an injunction to prevent CoStar from using the materials accessed by the former employee and CoStar claiming the documents had no relevance to its business or the employee’s new role with their company.
The judge is expected to rule on the injunction in September.
NAR settlement notices approved
Several waves of settlement notices, mostly in the form of postcards, have gone out to consumers over the past few months, informing them about agreements and payments made by individual companies.
But last week, the judge in the Burnett case approved maybe the most important one—the NAR settlement notice, which alerts consumers specifically about NAR’s $418 payment (as well as HomeServices of America’s $250 million payment).
The postcard also mentions several other companies who have struck agreements, including Anywhere Real Estate, RE/MAX, Keller Williams, Compass, Real Brokerage, Realty ONE, @properties, Douglas Elliman, Redfin, Engel & Völkers, HomeSmart and United Real Estate.
Plaintiffs are seeking to send these postcards “as soon as possible,” and legally the notices must be mailed by August 29. That means people will be receiving the notices, which prominently display the $980 million total settlement figure and discuss antitrust accusations against the industry shortly after the NAR settlement changes go into effect on August 17.
