{"id":26175,"date":"2023-11-20T00:00:00","date_gmt":"2023-11-20T00:00:00","guid":{"rendered":"https:\/\/columbusintl.com\/lawsuit-alleges-conspiracy-to-inflate-real-estate-commissions-in-manhattan\/"},"modified":"2025-09-12T21:23:18","modified_gmt":"2025-09-12T21:23:18","slug":"lawsuit-alleges-conspiracy-to-inflate-real-estate-commissions-in-manhattan","status":"publish","type":"post","link":"https:\/\/columbusintl.com\/en\/lawsuit-alleges-conspiracy-to-inflate-real-estate-commissions-in-manhattan\/","title":{"rendered":"Lawsuit Alleges Conspiracy to Inflate Real Estate Commissions in Manhattan"},"content":{"rendered":"

On Monday, a legal action was initiated, accusing the Real Estate Board of New York<\/strong> (REBNY), along with over two dozen brokerages and companies, of collaborating to artificially boost commissions paid to agents involved in the sale of residential real estate in Manhattan. This proposed class action against the REBNY trade group, the Corcoran Group (HOUS.N), Douglas Elliman (DOUG.N), and others, comes in the wake of an October 31 verdict by a federal jury in Missouri, awarding home sellers $1.78 billion in a parallel case against the National Association of Realtors and multiple brokerages. The potential impact of this verdict, which a judge could triple to exceed $5.3 billion, has the potential to disrupt long-standing practices mandating sellers to pay commissions to buyers’ brokers.<\/p>\n

The National Association of Realtors (NAR) is currently facing at least two other similar proposed class actions. In the federal court lawsuit filed on Monday in Manhattan, Monty March, the plaintiff, asserted that commissions on Manhattan residential sales persist at a stable 5% to 6%, even as home prices skyrocket, reaching an average apartment price exceeding $2 million by early 2022. March argued that sellers using REBNY’s listing service should not be obligated to pay 2.5% to 3% commissions to buyers’ brokers, especially when compared to lower commissions in “fully competitive” markets such as Brooklyn, where negotiations occur separately and average around 1%. REBNY’s General Counsel, Carl Hum, stated that the group is currently reviewing the complaint with its legal team and expressed confidence that the practices and procedures of its listing service “abide by all relevant laws.”<\/p>\n

As of now, Corcoran and Douglas Elliman have not responded to requests for comments. March claimed to have paid inflated commissions when he recently sold property on Manhattan’s Upper East Side, with property records revealing the sale of an apartment for $5.6 million in July 2022. Commencing January 1, REBNY will mandate sellers, rather than their brokers, to directly remit any commissions to buyers’ brokers, aiming to enhance “transparency and consumer confidence in the residential marketplace.” March expressed uncertainty about whether this change would lead to lower commissions or potentially cause delays in sales as buyers’ brokers negotiate with sellers. The lawsuit seeks damages for sellers of Manhattan residential property over the past four years who paid buyer brokers’ commissions under REBNY rules.<\/p>\n

Source: Reuters<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

On Monday, a legal action was initiated, accusing the Real Estate Board of New York (REBNY), along with over two dozen brokerages and companies, of collaborating to artificially boost commissions paid to agents involved in the sale of residential real estate in Manhattan. 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