The National Association of Realtors‘ president met with Federal Trade Commission Chairman Deborah Platt Majoras to discuss controversial minimum-service real estate laws and other real estate issues, according to a report this week in an association publication.

Realtor Magazine reported that Mansell met with Majoras “to update the agency on where (the association) stands on some key trade issues, including the growth in minimum service laws enacted by states.”

Steve Cook, a spokesman for the trade group, said Tuesday he did not have much additional information about the meeting, though he said it was held in Washington, D.C.

The national association has not formally announced a position on whether it supports state laws — backed by the state-level Realtor associations — that require agents and brokers to perform a specific minimum set of services for consumers, for some or all real estate transactions.

But antitrust officials at the U.S. Federal Trade Commission and Justice Department have made it very clear that they are opposed to any real estate law that could have the effect of limiting consumer choice and competition in the real estate marketplace. The federal agencies have issued letters of protest this year to regulators, lawmakers and governors in four states that were considering real estate minimum-service laws. The agencies encouraged state officials to amend or reject the legislation to address possible anti-competitive impacts from the legislation. All four states — Alabama, Missouri, Oklahoma and Texas — passed the legislation despite federal objections.

At issue is whether a mandate for minimum-service levels restricts consumers from saving money by choosing bare bones real estate services, or whether such minimum-service laws protect consumers from choosing an inadequate level of service that will leave them confused and stranded in a real estate transaction.

The state Realtor associations have argued that limited-service real estate companies, such as companies that offer to list a home in a multiple listing service for a flat rate and provide no additional services, put a burden on consumers and on agents who represent a buyer or seller on the other side of the real estate transaction.

If consumers are not fully represented, an agent working with a consumer on the other side of the transaction may feel obligated to perform the work of the other consumer’s limited-service agent, Realtor groups have said.

But the federal officials and real estate professionals working at limited-service companies have said the state laws force consumers to pay for real estate services they may not need or want, and there is not a huge volume of consumer complaints against such flat-fee or limited-service business models.

The National Association of Realtors has offered legal advice to the executives of state Realtor associations about so-called minimum-service laws, stating that it is not illegal for state associations to lobby for such laws and that federal antitrust agencies can only lobby against such legislation and are powerless to take legal action against states that approve such laws. Mansell, who is also a state senator in Utah, sponsored minimum-service legislation in that state earlier this year, after taking office as association president. Utah’s version of the minimum-service law, signed by the state’s governor in March, was enacted in May.

Inman News has identified a list of about one dozen states in which so-called real estate minimum-service laws are under consideration or have been approved in the past couple of years, and several other states also have earlier passed laws or regulations with similar language, too.

The Realtor Magazine report on the meeting between Mansell and Majoras states, “(The association) defers to state associations of Realtors on whether to support enactment of such laws . . . Mansell used the meeting to explain the laws’ aim of protecting consumers by requiring real estate professionals to provide minimal services such as presenting offers. The FTC views these laws as anti-competitive and harmful to consumers.”

The magazine report stated that Mansell also explained the association’s opposition to the entry of federally chartered banks into the business of real estate brokerage, and shared information about association efforts to educate its members about do-not-call, do-not-fax and anti-spam laws and to educate consumers about the risks of specialty mortgages and predatory lending.

A spokesman for the Federal Trade Commission said he could not divulge any details about the FTC meeting with Mansell because it was a private meeting.

Majoras, who was sworn in on Aug. 16, 2004, as chairman of the FTC, was nominated by President Bush in May 2004. She previously served as a partner in the antitrust section at the Jones Day law firm in Washington, D.C., and as deputy assistant attorney general and principal deputy at the U.S. Justice Department’s Antitrust Division.

***

What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top