Posted on December 24, 2024
Authored by Jonathan Hammer Levy
This newsletter serves as a detailed and formal response to the objections and the accompanying 132-page brief submitted by Tanya J. Monestier concerning the National Association of Realtors (NAR®) settlement. While her arguments are elaborate, they are fundamentally flawed, marred by significant inaccuracies, unsupported assumptions, and a lack of nuanced understanding of the real estate industry’s structure and practices. Below, I will address her claims point by point, providing a thorough counter to each.
She argues that real estate agents are employing strategies to circumvent the settlement’s intent, thereby preserving inflated commission structures.
Response:The real estate industry operates within a robust framework of regulations and ethical standards designed to safeguard consumers and ensure fair practices. While isolated incidents of non-compliance may arise, as in any profession, they are not indicative of the industry as a whole. It is overly simplistic and unfair to assume that such deviations represent systemic malpractice. Furthermore, industry watchdogs, regulatory authorities, and internal compliance mechanisms actively monitor and address these exceptions to ensure alignment with the settlement’s objectives. The portrayal of agents as scheming to subvert the settlement undermines the diligent efforts of professionals working to adhere to its stipulations.
She contends that the settlement lacks external enforcement provisions, which could allow non-compliant behaviors to persist.
Response:This claim overlooks the extensive regulatory oversight provided by federal and state laws that govern the real estate industry. Regulatory bodies such as the Federal Trade Commission (FTC), state real estate commissions, and licensing boards ensure compliance independently of industry organizations like the NAR®. These external enforcement mechanisms complement internal industry measures, creating a robust, multi-layered system to prevent misconduct. The settlement enhances these mechanisms by mandating transparency and accountability, ensuring that consumer interests remain protected.
She highlights the minimal monetary compensation for class members, especially herself, estimating individual recoveries to be less than $25.
Response:It is true that individual payouts in class-action settlements can be modest due to the sheer scale of affected parties. However, the primary purpose of this settlement is not to offer immediate financial restitution but to implement systemic changes that will deliver long-term benefits to consumers. By fostering a transparent commission structure and empowering consumers with clearer choices, the settlement provides enduring value that far exceeds short-term monetary compensation.
She criticizes the plaintiffs’ attorneys for requesting $333 million in fees, suggesting that this diminishes funds available to class members.
Response:Attorneys’ fees in class-action cases are reviewed and approved by the courts based on the case's complexity, the work involved, and the results achieved. While the requested fees may seem substantial, they reflect the extensive resources and expertise required to navigate and resolve a case of this magnitude. These fees are critical in ensuring that consumer rights are defended and systemic reforms are enacted.
She asserts that the settlement’s implementation has caused confusion among consumers, complicating the home-buying and selling processes.
Response:
While any major industry shift can initially create challenges, the real estate sector is committed to educating consumers and smoothing the transition to new practices. Professionals across the industry are providing resources, guidance, and support to ensure clarity and improve consumer confidence. These efforts demonstrate the industry’s dedication to fostering an environment where consumers can navigate the market with ease and understanding.
She describes the settlement as an "illusion of change," arguing that it fails to address root issues within the industry.
Response:This characterization dismisses the meaningful progress the settlement represents. While no agreement can immediately resolve all systemic issues, this settlement sets a strong foundation for ongoing improvements. By increasing transparency, fostering fairer commission practices, and enhancing consumer awareness, the settlement takes tangible steps toward creating a more equitable and trustworthy real estate market.
Her brief broadly characterizes the real estate industry as unethical, non-compliant, and untrustworthy.
Response:This sweeping generalization misrepresents an industry built on stringent regulatory frameworks, ethical standards, and a deep commitment to consumer protection. It disregards the efforts of countless professionals who act with integrity and professionalism daily. The newly instituted widely accepted use of the ConfirmBuyer.com platform further illustrates the industry’s proactive approach to enhancing transparency, compliance, and consumer trust.
Her arguments appear influenced by personal grievances or biases rather than objective legal or industry-specific expertise.
Response:Her objections reflect a narrative that lacks balance and is seemingly rooted in anecdotal evidence or speculative assumptions. By focusing on isolated concerns and amplifying them into broad accusations, her critique detracts from constructive discourse that could drive meaningful reform.
Professor Monestier's arguments imply that the entire real estate industry is plagued by deception, where agents, NAR® members, and MLS participants deliberately mislead and exploit consumers. Such a sweeping condemnation could easily be directed at other professions, such as attorneys abusing the settlement system or medical practitioners manipulating billing mandates. These unfounded generalizations fail to acknowledge the significant strides the real estate industry has made toward fostering trust and compliance.
Professor Monestier’s objections, while thorough, fail to account for the industry’s continuous efforts to uphold ethical standards, adapt to evolving regulations, and embrace systemic reforms. The settlement is a meaningful step toward addressing structural challenges and delivering long-term benefits to consumers and professionals alike. Furthermore, the adoption of platforms like ConfirmBuyer.com exemplifies the industry’s commitment to fostering compliance, accuracy, and consumer trust.
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