The U.S. Justice Department’s Antitrust Division said in a statement issued Thursday that a proposed law mandating a new level of real estate services for all real estate transactions in Idaho “would be likely to reduce choice” and raise prices.
The proposed legislation, House Bill 135, has passed the Idaho House of Representatives in a 64-0 vote, with six members absent, and was introduced Monday to the state Senate. The legislation is similar to another proposal by the Idaho Real Estate Commission last year that did not go forward, and to other state measures that the Justice Department and Federal Trade Commission opposed.
Real estate brokerages, as stated in the proposed bill, “have the obligation to be available to the customer to receive and timely present all written offers and counteroffers” in any compensation agreement, which targets companies that offer to list a home in a multiple listing service but provide few or no other services to consumers.
“The duties … are mandatory and may not be waived or abrogated,” the proposed bill states, and provides that brokerages may charge “a separate fee or commission for each service provided to the customer in the transaction.”
“Our assessment is that such minimum service provisions would be likely to reduce choice and raise the prices Idaho home buyers and sellers pay for brokerage services. Further, we have not seen evidence of consumer harm that HB 135 would prohibit,” according to the Justice Department statement.
While the Justice Department and Federal Trade Commission can comment about state legislation that they believe violates antitrust laws, state legislation is largely immune from federal action — even if those laws are in violation of federal antitrust law.
In several states, legislators passed so-called minimum-service legislation even after the federal agencies expressed opposition.
The Idaho Real Estate Commission voted at a Nov. 27, 2006, meeting to support the Idaho Association of Realtors legislation.