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A lawsuit filed in West Virginia challenging the constitutionality of a requirement for out-of-state brokers to have an in-state brick-and-mortar office to do business has been dismissed after brand-new legislation did away with the requirement.
On Wednesday, April 30, plaintiff and online discount broker Derek Eisenberg, along with the officials of the West Virginia Real Estate Commission named as defendants in the case, filed a stipulation of voluntary dismissal with prejudice, meaning permanently. The case was dismissed that same day.
The court paused Eisenberg’s case in mid-March after the parties informed the court that legislation had been introduced at the state level “that, if enacted, may resolve the claims asserted in this case.”
Derek Eisenberg
According to an amended complaint filed by Eisenberg in January, the West Virginia Real Estate Licensing Act was amended in 2023 to require anyone with a West Virginia broker’s license to maintain a brick-and-mortar office in the state and to conduct their business there. Violations of the law can result in fines in the thousands of dollars and up to 90 days in jail.
But on March 12, Delegates Roger Hanshaw (Republican) and Sean Hornbuckle (Democrat) introduced West Virginia House Bill 2010, which would create “an exception to the requirement that a real estate broker maintain a definite place of business within the state for non-residents who maintain a definite place of business in their jurisdiction of residence.”
On April 30, the parties told the court in a joint status update that the state’s governor had signed the legislation on April 25 “and that the legislation resolves all the Plaintiff’s claims in this matter.”
In a statement, Eisenberg told Inman he’s “glad” West Virginia changed the law.
“Practically, in modern times, no state should require an office anywhere because documents are signed, created and stored electronically; however, their change permits me to have one office in my home state of New Jersey, and that satisfied my concerns,” Eisenberg said.
“While there still is the issue of being required to have an office anywhere at all, I don’t think I would ever run my business with no office in my home state,” he added.
“That might be another case for somebody that wants a 100 percent virtual company.”
Eisenberg is president of Continental Real Estate Group, which operates online under a fee-for-services business model in 45 states and Washington, D.C. He himself holds a broker’s license in 26 states, including West Virginia.
His goal is to expand nationwide to the remaining five states by the end of 2025. However, Eisenberg says three of those five states — Alaska, Hawaii and Oregon — have the same physical office requirement as West Virginia did, and, in his suit, he argued that paying thousands of dollars to comply with states’ brick-and-mortar requirements threatened those plans. He asserts he can do everything required of a broker without a physical office.
Eisenberg filed a complaint against Nevada officials in December that is nearly identical to the West Virginia complaint. On March 5, Nevada officials filed a motion to dismiss that suit, making arguments similar to those the West Virginia Real Estate Commission first put forward regarding the law being applied equally to in-state and out-of-state brokers and ensuring broker competency. The suit is ongoing.
Editor’s note: This story has been updated to note that three of the five remaining states where Eisenberg hopes to expand have the same physical office requirement as West Virginia did.
