The Federal Government versus the Real Estate Industry

The Federal Government versus the Real Estate Industry

In 2008 the federal government and the real estate industry (NAR?) entered into a 10 year agreement where the government would not pursue what they perceived as anti-trust violations, if the real estate industry focused on cleaning-up some of it’s practices.  At the most recent Legal Symposium sponsored by the Washington Realtors Association it was revealed that the federal government is once again targeting the real estate industry and how it has failed in some areas.  Apparently, there is a joint Federal Trade Commission and Department of Justice Workshop on June 5^th to explore and discuss potential options/penalties for them to pursue.

One area of focus is whether as independent contractors if we discuss with virtually anyone in the industry about the setting of standard commissions (price fixing), requiring specific terms and conditions be included in Offers to Purchase or, requiring the removal of language in Offers to Purchase (paragraph W) when receiving Offers (conspiring to restrain trade).  Stating in front of any competitor (and independent real estate agent) that you would not recommend using a specific lender, attorney, inspector, etc.  This could be construed as a “boycott” of that individual.

Not only does this apply to individuals within an office or agency, but it applies to every real estate Team.  For example, a Team Leader cannot state in any conversation with members of their Team that “they will not use a specific inspector again”.  Because every real estate agent on that Team is a potential competitor, now, or in the future.  That conversation would be considered “boycotting” and fall under federal Anti-Trust Violations.  A Team Leader cannot set a standard commission rate that any, or all, of their Team Members must adhere to.  The Designated Broker of an agency is the only person who can set the commission rates within that agency.

Food for thought.

If you have any questions or comments about this article, please contact Steve Meyers at smeyers@kw.com or (206) 972-3328.