NAR Announces 17 August Date for Buyer Broker Compensation Process Changes

Michael T. Jackson, SHRM-CP - May 14 2024
Published in: Mobility
| Updated May 14 2024
The National Association of Realtors (NAR) releases date for its implementation of new requirements related to MLS networks and buyer representation/agency agreement requirements under its proposed settlement to multiple U.S. buyer broker compensation litigation cases. 

On 3 May, the National Association of Realtors (NAR) announced that process changes included in its proposed settlement agreement regarding multiple U.S. buyer broker compensation litigation cases will go into effect on 17 August 2024. This announcement provides a firmer timeline than what NAR had previously indicated and reflects a shift from the late July time frame included in previous NAR messaging.

In an email sent to NAR members, Chief Legal Officer Katie Johnson indicated the changes would be implemented via updates to the Multiple Listing Systems (MLS) policy handbook effective on 17 August. The date, according to Johnson, reflects the earliest date of class notice threshold set out in its announced settlement, and this timing was firmed up with the U.S. District Court for the Western District of Missouri during its recent preliminary approval of the proposed settlement. The proposed terms of the settlement still must receive final approval from the court before being formalized, and a hearing has been scheduled for November 2024, but NAR can currently proceed with implementing process changes while the legal process continues.

Johnson indicated that MLS networks fully owned by NAR-affiliated state and local organizations are expected to comply with the 17 August deadline despite the preliminary approval providing non-NAR-affiliated MLS networks until 16 September to implement required policy changes. Thirty MLS networks across the United States are not fully owned by NAR-affiliated organizations, and Johnson indicated that NAR is asking any of those networks that choose to opt into the settlement to implement changes by 17 August. 

The changes that will go into effect on 17 August include:

  • Requirement of compensation-related disclosures to sellers and to prospective sellers and buyers
  • Requirement of MLS-participating brokers working with a buyer to enter into a written buyer agency/representation agreement prior to touring a property
  • Elimination and prohibition of any requirements of compensation offers to buyer brokers in the MLS
  • Prohibition of MLS participants, subscribers, and sellers from making any offers of compensation to buyer brokers in the MLS
  • Updating of MLS systems to remove broker compensation fields and information

In remarks at the MLS Association Executive Session of NAR’s Realtors Legislative Meeting, NAR Associate General Counsel Deanne Rymarowicz indicated that ensuring compliance with these new requirements would fall on the individual MLS networks. Rymarowicz stated that this requirement would be consistent with existing practices for MLS networks, but multiple MLS networks indicated that more clarity on expectations and requirements would be necessary in the coming weeks to define compliance protocols and requirements for the 17 August deadline.

What Does This Mean for Mobility?

NAR’s announcement of the 17 August date for process changes provides important clarity for stakeholders across the talent mobility industry for knowing when new requirements related to buyer representation/agency agreements and MLS network changes will take effect. Talent mobility professionals, including experts involved with WERC’s buyer broker litigation ad hoc group, indicate that they encourage companies, relocation management companies, brokers, and other industry vertical partners to start or continue communicating with their associated partners about what these changes might mean for each organization and educating key internal stakeholders about these new requirements and associated impacts. This will be particularly necessary because each company’s situation will be unique, and many requirements, particularly around buyer representation/agency agreements, will vary state-by-state based on existing or new laws governing these agreements. 

WERC and its ad hoc group of approximately 60 industry experts continue to closely monitor developments related to changes resulting from the U.S. buyer broker compensation litigation and will provide additional updates as they are available. Additionally, WERC and the ad hoc group are working on a range of resources and materials to help support various elements of the industry in preparation for these changes, and more will be forthcoming in the coming weeks.

Michael T. Jackson is vice president of member engagement and public policy at WERC. Multiple volunteer leaders from WERC’s buyer broker litigation ad hoc group also reviewed and contributed insights to this article.