Top Agent Network, a firm that operates a members-only private group of top-producing real estate agents, filed for a temporary restraining order Wednesday night in an attempt to stop the National Association of Realtors from enforcing a policy designed to curtail pocket listings.
On Monday, TAN filed a lawsuit alleging NAR and fellow defendants the California Association of Realtors and the San Francisco Association of Realtors (SFAR) have violated a slew of antitrust and unfair competition laws for adopting the Clear Cooperation Policy, also known as MLS Policy Statement 8.0, which requires listing brokers to submit a listing to their multiple listing service within one business day of marketing a property to the public. The controversial rule is meant to effectively end the growing practice of publicizing listings for days or weeks without making them universally available to other agents.
The Clear Cooperation Policy implementation deadline was May 1, and some MLSs have instituted hefty fines to enforce it, including SFAR. Some brokerages, including Compass and The Agency, and discount franchisor Assist-2-Sell have come out against the policy while MLSs, Redfin’s Glenn Kelman and others argued in favor of it, in part because they believe it promotes fair housing.
In its complaint, TAN refers to itself as a “private MLS” and alleges the policy constitutes a “group boycott” of TAN that NAR is using to keep agents tied to Realtor-affiliated MLSs and paying association and MLS dues and fees and away from competitors like TAN. Both NAR and C.A.R. told Inman the lawsuit was baseless.
On Wednesday, TAN filed a motion for a temporary restraining order and for a preliminary injunction preventing the three Realtor associations from enforcing the policy until the resolution of the lawsuit. The filing argues that TAN has already lost subscribers that cite the policy as a reason to not renew their memberships and that the policy’s continued enforcement would cause TAN to suffer “irreparable harm.”
“[B]ecause TAN offers a recurring subscription service, every lost member represents the loss of a persistent revenue source, not just a one-time transaction. These increased departures can lead to a ‘death spiral’ where the loss of members means that remaining participants have less incentive to remain, accelerating further departures — i.e., TAN’s ‘network effect’ will be lost,” the motion states.
Temporarily stopping the defendants from enforcing the policy will cause them little, if any, hardship, attorneys for TAN argue.
“They would simply be required to temporarily carry on under the system that existed prior to the Policy in which they flourished and had market domination. Under the pre-Policy system, moreover, agents were still required to obtain seller-consent before opting to market/sell property Off-MLS. Thus, consumers are not being harmed by temporarily enjoining the Policy’s enforcement,” the motion states.
“On the other hand, if the Policy continues to be enforced, TAN faces the certainty of continued membership losses and a clear risk that its overall business will be severely diminished or destroyed.”
NAR declined to comment for this story, pointing to its earlier statement on the lawsuit. But on Thursday, Ethan Glass, outside counsel for NAR, filed a letter with the court saying the immediate relief sought by TAN was “not appropriate” on the grounds that the company had known about the Clear Cooperation Policy since November 5, 2019, shortly before the policy was approved by NAR’s board of directors.
“Simply put, TAN sat on its hands — for months — before burdening this Court in the midst of a global pandemic with a request for immediate, injunctive relief,” Glass wrote. He further said TAN would not be able to show that the law and facts would “clearly favor” its position as a mandatory injunction would require and NAR will demonstrate that if the court asks.
C.A.R. also took issue with TAN’s timing.
“The request for an emergency TRO is way off base and way too late. This policy has been very public and debated since November 2019. Further, the entire lawsuit is entirely baseless, particularly as it applies to C.A.R. since it neither operates an MLS, nor is it responsible for enforcement of these NAR rules,” C.A.R. said in an emailed statement.
SFAR declined to comment for this story, citing ongoing litigation.
Editor’s note: This story has been updated with a comment from C.A.R. and to note that SFAR declined to comment.