The Texas state flag behind a gavel and scales of justice.
Illustration by Lanette Behiry/Real Estate News

Texas commissions lawsuit targets teams, associations 

Texas Realtor associations and 20+ brokerages and teams are being sued by a home builder and magazine publisher who call NAR the “creator of the conspiracy.”

Updated December 15, 2023
4 minutes

Key points:

  • The lawsuit is the latest in a series of commissions-related cases filed in the wake of the Sitzer/Burnett verdict.
  • The largest Texas Realtor associations are among the defendants, which also include local and national brokerage companies and Texas-based teams.
  • NAR is not named in the suit despite being described as “at the core of this alleged conspiracy.”

The National Association of Realtors is the "creator" of a scheme to inflate real estate commissions, according to a lawsuit filed in a Texas federal court Monday, but it's individual brokerages, agent teams and associations that are the targets of the suit.

The suit, which seeks class action status, was brought by a Texas home builder, QJ Team LLC, and Five Points Holding, LLC, a holding company headed by business magazine publisher Mark Hulme in the U.S. District Court for the Eastern District of Texas. The Texas case is one of several new lawsuits filed in the wake of the Sitzer/Burnett verdict.

"In the realm of Texas real estate lies a concealed conspiracy that has adversely impacted countless home buyers and sellers," the suit alleges. "Plaintiffs, who have listed their homes on Multiple Listing Services (MLSs) in Texas, stand as the voice of those who have borne the brunt of the Defendants' unlawful collaboration and anticompetitive practices."

Though the suit identifies NAR as the "creator of the conspiracy" and claims the association is "at the core of this alleged conspiracy," NAR is not named as a defendant.

Instead, the suit is aimed at local associations and brokerages. Named defendants include the Texas Association of Realtors, MetroTex Association of Realtors, Houston Association of Realtors, Austin Board of Realtors, San Antonio Board of Realtors, more than 20 Texas teams or brokerages — including Square MB, LLC, which does business as Magnolia Realty and was founded by HGTV stars Chip and Joanna Gaines in 2007 — and individual broker Mark Anthony Dimas.

In addition to alleging that all named defendants violated the federal Sherman Antitrust Act, the suit accuses real estate teams Hexagon Group and The Michael Group of violating the Texas Deceptive Trade Practices Act. 

Among the named brokerages is Ebby Halliday Real Estate, described by the plaintiffs as "the largest private residential real estate company in Texas by sales volume." National brokerage companies Side, Fathom Realty, HomeServices of America and Keller Williams are also named as defendants.

"As prominent brokers in Texas, their involvement in the alleged conspiracy, manifested through the implementation and enforcement of its rules and policies, is indispensable to the conspiracy's prosperity."

The suit alleges that the defendants helped implement the conspiracy by "reviewing NAR's Rules and consenting to them at annual meetings" and by "serving on boards and committees that oversee compliance with NAR Rules," the filing states.

The lawsuit was brought on behalf of all home sellers in Texas from November 13, 2019, to the present who used a defendant or their affiliates as a listing broker and paid a buyer's agent commission.

Some Texas sellers who listed their homes with KW or HomeServices are already covered in the Moehrl v. NAR suit. The sellers covered in the new suit sold homes through those firms between January 1, 2021, and March 29, 2023.

Keller Williams responded to a request for comment by pointing to a previous statement following the Sitzer/Burnett verdict, which reads: "Keller Williams followed the law regarding cooperative compensation and stands by the evidence presented on the 100-year-old practice of sellers' agents offering commissions to other agents who help market and sell homes."

The CEO of the Austin Board of Realtors, Emily Chenevert, said she would not comment on pending litigation. "We will continue to focus our efforts on serving our 20,000-member organization while advocating for the rights of property owners and homebuyers in Central Texas."

Although NAR was not directly named in the suit, Mantill Williams, VP of communications at NAR, said the association stands by the current system of cooperative compensation, calling it a "longstanding, pro-consumer practice" that "makes efficient, transparent, and accessible marketplaces possible."

Williams added: "Sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation. REALTORS® across the country are continuing to deliver value to their clients day in and day out, helping them to understand their choices and navigate what for many will be the most significant and complex transactions of their lives."

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