The National Association of Realtors is facing yet another copycat commission lawsuit. The trade group’s legal woes have brought it back to California, where is already facing other commission lawsuits.
Filed on Tuesday in U.S. District Court in Los Angeles, the Freedlund suit, named after its lead — and currently only — plaintiff, Andrea Freedlund, the suit alleges that NAR, along with the California Association of Realtors and Redfin, conspired to artificially inflate agent commissions. According to the allegations made in the complaint, the collusion takes “a large chunk out of the life savings of middle-class Californians.”
At the center of the lawsuit is NAR’s Participation Rule, which requires listing brokers to make a blanket offer of compensation to buyer’s brokers in order to list a property on a Realtor association affiliated MLS.
“Defendant’s illegal collusion has the inevitable effect of forcing home sellers like Plaintiff to bear a cost—buyer’s side commissions—that in a competitive marketplace lacking Defendants’ collusion would be borne by the buyer, if at all,” the complaint reads.
Freedlund sold her Laguna Nigel home in late Sept. 2021 to a buyer represented by a Redfin agent. She was also represented by a Redfin agent in the transactions. While this is certainly not the only lawsuit Redfin has been named a defendant in, it is the first suit in which it is named as the sole real estate brokerage defendant.
Like the other commission lawsuits, the Freedlund suit is seeking class action status for a class defined as all persons in California who paid a buyer’s broker commission directly or indirectly to Redfin or a Redfin buyer’s agent in connection with the sale of residential property between Oct. 2, 2019, and Oct. 2, 2023.
The plaintiff is seeking damages, a permanent injunction against the defendants and is demanding a jury trial.
“The cooperative compensation practice makes efficient, transparent, and accessible marketplaces possible. 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,” Mantill Williams, NAR’s vice president of communications, wrote in an email. “The National Association of REALTORS® will respond to this complaint in court.”
The other defendants did not respond to a request for comment.
