DOJ inquiry delays settlement-related document rollout at CAR



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The California Association of Realtors postponed the release of 21 forms this week after receiving feedback from members — and an inquiry from the U.S. Department of Justice.

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The California Association of Realtors (CAR) this week delayed the rollout of nearly two dozen new forms dealing with the NAR commission suit settlement after getting an inquiry from the U.S. Department of Justice.

The Golden State trade group confirmed the delay to Inman Friday, with CAR General Counsel Brian Manson saying in an email that each June the organization “updates its standard forms to reflect the latest legal requirements and best practices in real estate transactions. This year, CAR prepared 67 new and revised forms for release next week.”

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“Out of an abundance of caution, CAR is postponing the release of 21 of those forms, which are associated with the changes in business practices required by the NAR settlement,” Manson continued. “CAR has received an inquiry from the [U.S. Department of Justice] regarding these forms as well as extensive feedback from our members. We believe it is prudent to take additional time to consider the concerns comprehensively.”

CAR did not provide additional details about the forms, nor did it described the nature of the DOJ’s inquiry. The U.S. Department of Justice did not respond to Inman’s request for comment. Real estate strategist Rob Hahn first posted about the forms and DOJ inquiry on Twitter Friday.

Though details about what happened are scarce, the DOJ inquiry and document rollout delay come at a significant moment. The real estate industry is currently grappling with how to implement new rules such as a prohibition on sellers’ agents making offers of compensation to buyers’ agents in MLSs affiliated with the National Association of Realtors. Such rules were the result of a major antitrust settlement the National Association of Realtors negotiated earlier this year.

The settlement-prompted rules are set to go into effect in August, and the industry has spent much of the spring trying to figure out what exactly will allowed and how the practice of buying and selling homes might have to evolve.

Against that backdrop, however, many eyes have been on the DOJ, which has indicated it wants significant changes such as “decoupling” — meaning sellers’ agents do not preemptively offer compensation to buyers’ agents, as often happens today — to agent compensation. The DOJ has been a wildcard through the antitrust commission saga because it was unclear how aggressive the agency might be in pushing for change.

Though the DOJ remains something of a wildcard, the inquiry into CAR’s legal and business forms shows at least that, while questions remain, the agency is still busy behind the scenes looking closely at the real estate industry.

Email Jim Dalrymple II





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