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Will the NAR Settlement in the U.S.A. Eliminate Buyer’s Realtor’s in Canada?
David H. Korman
April 3, 2024
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A proposed settlement agreement has been reached with respect to a class-action lawsuit that was filed in the Missouri federal court by a group of home sellers against the National Association of Realtors (NAR) and other defendants. The Plaintiffs claimed that real estate commission rates are too high, buyers’ representatives are paid too much, and NAR’s Code of Ethics and MLS Handbook, along with the corporate defendants’ practices, lead to inflated commission rates.
Pursuant to the settlement NAR agreed to pay $418 Million over approximately four years. The settlement is subject to court approval which is expected to take several months or more. In addition, the settlement requires practice changes including decoupling of commission fees so that commissions will no longer bundled – i.e. the standard 6% split between the buyer’s and seller’s realtors. NAR will transition to a structure where each realtor’s commission is distinct and not inherently linked.
Consumers will continue to have the right to cooperative compensation as an option so long as they pursue it off-MLS through negotiation and consultation with real estate professionals.
There are many ways in which buyer realtors could be compensated, including through offers of compensation communicated off MLS, including but are not limited to:
The impact of the NAR settlement in Canada is now being analyzed in each Province and by all brokerages and realtors. There is an evolution going on in the industry. To some degree the recent enactment of the Trust in Real Estate Services Act (TRESA) in Ontario anticipated part of this evolution.
The lawyers at Kormans LLP are continually monitoring this development and are happy to assist you with any questions that you may have on this blog, or any other legal inquiries that you may have. Please email us at info@kormans.ca or call (905) 270-6660.
David is a member of the Law Society of Ontario since his call to the bar in 1985. David has over 35 years of extensive experience as a lawyer in residential and commercial real estate transactions, commercial leasing, corporate and commercial transactions, and private and institutional lending. His client base includes individuals, business entrepreneurs, developers, financial institutions, brokerages, and real estate investment trusts.
David takes an amiable and dedicated approach to practicing law. His focus is on providing his clients with the highest levels of legal service. Clients love working with David, as he always works hard in their best interests with a smile on his face. David’s sports background and leadership skills are highly influential on the growth and success of Kormans LLP as he truly believes in fostering the Kormans LLP environment as both a family and a team!
When David isn’t closing real estate and corporate transactions, David is an avid runner, hiker and sports enthusiast. However, what David enjoys most is spending quality time with his wife, kids, grandkids and friends at home, at the cottage, and on travels.
David is a frequent blogger, as well as a lecturer and panel member at seminars, webinars and workshops for real estate agents, mortgage brokers and home buyers. Please make sure to catch “David & David on Real Estate” – David’s featured Podcast which can be heard on RadioPublic, Spotify, Breaker, Anchor and Google Podcasts, and can be viewed on the Kormans LLP YouTube channel!
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