Justice Department Objects to Settlement in Real Estate Commission Case

Justice Department

The Department of Justice has made its first foray into the growing number of lawsuits regarding real estate commissions by asking a federal judge in Boston to reject a consumer settlement between a group of home sellers and a multiple listing service.

Reuters is reporting the DOJ is challenging the terms of the settlement between the sellers and MLS Property Information Network (MLS PIN), a regional database serving New England. In a filing, the DOJ claimed the settlement – which features a $3 million payment by MLS PIN – only “makes cosmetic changes” and will enable the continuation of “stubbornly high broker fees.”

Sellers listing their property on MLS PIN were required to offer compensation to a buyer’s agent, which could be as low as one cent. The settlement would change the MLS PIN rule to allow sellers to make zero-dollar commissions, but the DOJ disapproved of that change.

“Virtually no one will exercise that option for the same reason that they don’t offer one cent now: The modified rule still gives sellers and their listing brokers a role in setting compensation for buyers’ brokers,” the Justice Department said.

The case in question is Jennifer Nosalek et al v. MLS Property Information Network et al, which is before the U.S. District Court for the District of Massachusetts.

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