The American Homeowners Grassroots Alliance (AHGA), a national advocacy organization representing the nation’s 70 million homeowners, has recommended an aggressive agenda to the Antitrust Modernization Commission that suggests ways to improve antitrust and consumer protection laws.
Congress created the Antitrust Modernization Commission in 2002 to examine whether the need exists to modernize the antitrust laws, to identify and study related issues and evaluate the advisability of proposals, and to prepare and submit recommendations to Congress and the President. The commission consists of 12 members, four of which were appointed by the President, four by the leadership of the Senate, and four by the leadership of the House of Representatives. The Commission solicited public recommendations on or before Oct. 1, 2004.
In its recommendations AHGA noted “The ultimate purposes of the nation’s antitrust laws are to protect consumers, and AHGA believes that should be the focus of any revisions in antitrust laws and/or the creation of new antitrust or consumer protection laws. Their purpose should not be to advance the interests of one business or a category of businesses.”
AHGA made a number of recommendations to the commission relating to existing real estate practices. The Alliance suggested the commission study whether current industry electronic commerce practices served the best interests of home buyers and sellers. New legislation may be needed to assure that home listings are widely disseminated in manner that is user friendly to potential buyers and to assure that organizations representing real estate brokers and agents who have fiduciary responsibilities to buyers and sellers reflect those responsibilities in their collective actions.
AHGA also asked the commission to study causes of the erosion of the laws of real estate agency. In recent years, representatives of real estate organizations have set out at the state level to create laws legalizing “dual agency,” which would allow a broker to simultaneously represent both home buyers and sellers. Among the fiduciary responsibilities of a real estate broker and agent is to help negotiate for the best price and terms for their clients. When the broker/agent simultaneously represents a buyer and a seller of the same property getting the best price and terms for both clients is mutually exclusive. AHGA urged the commission to examine this issue and to recommend a federal law pre-empting state “dual agency” laws should it conclude that consumers are being denied full benefit of real estate broker and agent fiduciary responsibilities. The Alliance also noted that tie-in arrangements between real estate trade associations and multiple listing service (MLS) organizations appear to undermine real estate agency and that a “bright line” prohibition of this practice would be timely.
There are also several potential antitrust issues relating to real estate financing and marketing. There appears to be insufficient competition in title insurance reissue market. As multiple factors, including consumer demand, are driving increased overlap between real estate lending and real estate marketing, antitrust laws should be adjusted to both protect consumer interests and encourage greater competition. For example real estate agents or brokers who arrange home financing should be subject to all Truth-In-Lending-Act (TILA) requirements. Similarly, while antitrust laws should facilitate the ability of banks to enter the real estate sales market, at the same time all consumer protections and other appropriate laws and regulations should apply to new entrants into the field of real estate marketing.
Finally AHGA suggested that Congress should consider the creation of an independent advocacy function within the Department of Justice and other regulatory agencies with antitrust oversight. Like the office of the Chief Counsel for Advocacy within the Small Business Administration, the role of those offices would be to advocate on behalf of the best interests of the consumer on all matters, including proposed federal laws and regulations, totally free of political pressures from any incumbent administration.
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