The Justice Department can reopen an antitrust investigation into the National Association of Realtors, according to a court ruling on Friday. The ruling rejected a request by the real estate trade group to enforce a 2020 deal with the Trump administration to end the case.
The U.S. Court of Appeals for the D.C. Circuit stated in a 2-1 decision that the Department of Justice (DOJ) closing its inquiry did not mean it could never be reopened. They said that the terms 'close' and 'reopen' are clearly compatible.
In November 2020, the previous President Donald Trump's administration reached a settlement with the group to conclude an investigation regarding its business practices.
The suggested settlement had several conditions for the group, which represents over 1.5 million agents. These included increasing transparency about broker commissions and prohibiting claims that real estate buyers do not pay for any services. The Justice Department declared it was ending the investigation in relation to two of the group's other rules.
Eight months later, President Joe Biden's administration pulled out of the agreement, which had not been finalized, and pursued the investigation further.
The organization filed a lawsuit, arguing that the closing letter prevented the Justice Department from restarting its investigation. A lower court judge agreed, and the Justice Department challenged the decision.
Judges Florence Y. Pan and Karen LeCraft Henderson supported the Justice Department, while Judge Justin Walker disagreed and said he would support the real estate group. Pan is a Biden appointee, and Henderson was nominated by former President George H.W. Bush.
The realtors' group mentioned in a statement, 'As expressed by Judge Walker in his opposing viewpoint, NAR believes that the government should be held to the terms of its agreements. We are examining today's decision and assessing our next actions.'
The Justice Department stated its commitment to 'striving to reduce the cost of purchasing and selling a home.'
Assistant Attorney General for Antitrust Jonathan Kanter remarked in a statement, 'Real estate commissions in the United States significantly surpass those in any other developed economy, and this decision restores the antitrust division's ability to investigate potential illegal conduct by NAR that may be contributing to this issue.'
In recent years, the industry has faced increased scrutiny, with a Missouri jury finding the NAR and others guilty of colluding to maintain high commissions in a $1.8 billion verdict in October. To settle that case and others, the NAR consented in March to a deal that would pay sellers about $418 million, and the group stated it would also amend some of its regulations.
