Real Estate

The DOJ may reopen its investigation into the NAR, appellate court rules.

In another blow to the National Association of Realtors, the court ruled that the U.S. Department of Justice can reopen the commission’s investigation into the sharing rules.

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The U.S. Justice Department may reopen its investigation into the National Association of Realtors’ commission rules, according to a ruling Friday by the U.S. Court of Appeals for the District of Columbia Circuit.

The DOJ began investigating NAR’s cooperative compensation rule, also known as its participation rule, five years ago.

The DOJ and the NAR agreed to a proposed settlement of the investigation in 2020, and the DOJ sent a letter to the NAR stating that it had discontinued its investigation of the two rules. However, after the White House changed hands, the DOJ withdrew from the settlement in July 2021 and resumed its investigation into the rules.

NAR successfully asked the lower court to entertain the petition. That decision was overturned by a split verdict on Friday.

“The district court granted NAR’s motion, concluding that the new filing was barred by a properly executed settlement agreement. We disagree.” The court pronounced the decision. “We therefore reverse the judgment of the district court.”

The court found that the “plain language” of the 2020 letter leaves open the possibility for the DOJ to reopen its investigation.

The three-judge panel heard oral arguments on December 1, when NAR was still publicly saying it would appeal Sitzer. Burnet’s decision. On March 15, NAR announced that it would settle the case and other cases that have spread across the country, all focusing on the same thing.

Friday’s order allows the DOJ to continue its campaign to pressure the real estate industry.

Judge Justin R. Walker wrote the dissent, saying the DOJ had an agreement with the NAR and reopening its investigation would violate that agreement.

“As in every contract, each side gained something, and each side gave something up,” Walker wrote. “The Realtors agreed to drop four policies that the DOJ deemed competitive. In return, the DOJ promised that it had ‘closed’ its investigation into two other policies.

Walker previously indicated that NAR’s settlement with the DOJ was a condition that the department and its staff would not change under the Biden administration and that the DOJ would keep the matter closed.

“You’ve got the benefit of being confident enough that if the incumbent and no-confidence splits don’t change after the election, you’re good to go,” Walker said during the December arguments. “You made this bet and you lost.”

In a statement, NAR spokeswoman Mantle Williams pointed to Walker’s disagreement and said he was considering his options.

“As Judge Walker stated in his dissenting opinion, NAR believes that the government must abide by the terms of its contracts,” Williams said. “We are reviewing today’s decision and evaluating next steps.”

This post will be updated.

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