^{April 6, 2024 | Reading Time: 2.5 Minutes}

The U.S. Court of Appeals has issued a significant ruling allowing the Department of Justice (DOJ) to revive its investigation into the National Association of Realtors (NAR). This decision carries profound implications for an industry already experiencing considerable turbulence.

In a split decision announced on Friday, the court voted 2-1 in favor of permitting the DOJ to reopen its inquiry into potential anticompetitive practices within the real estate sector, particularly concerning NAR’s regulatory framework.

Judge Florence Pan, speaking for the majority, highlighted that the initial agreement contained a “Reservation of Rights” clause, preserving the DOJ’s authority to pursue actions against NAR in the future. She emphasized the narrow scope of the issue, affirming that the DOJ is not barred from reexamining the Participation Rule and the Clear Cooperation Policy.

However, dissenting Judge Justin Walker argued that the context must guide the interpretation, suggesting that a promise to close could preclude an immediate reopening.

In response, the DOJ, via a news release, refrained from outlining its subsequent actions but underscored its dedication to reducing the costs associated with real estate transactions. Assistant Attorney General Jonathan Kanter emphasized the need to address the disproportionately high real-estate commissions in the U.S. compared to other developed economies.

The repercussions of this ruling are significant for NAR, which still retains the option to appeal to the Supreme Court. Despite this, the DOJ may opt not to proceed with the investigation, particularly in light of NAR’s recent settlement with home sellers regarding buyer agent commissions.

Nonetheless, indications suggest otherwise, as the DOJ has signaled further action in the Nosalek case against MLS PIN. Proposed measures, including injunctions prohibiting sellers from making commission offers to buyer brokers, hint at potentially sweeping changes in commission structures.