Howard Hanna named in new homebuyer commission suit

After being voluntarily dismissed from the Batton 2 homebuyer commission lawsuit in early March, things were looking up for Howard Hanna Real Estate Services.

But the brokerage firm is once again finding itself under fire after homebuyer plaintiff Scott Davis filed a suit against the firm’s parent company, Hanna Holdings, on May 31.

The suit was filed in U.S. District Court in Philadelphia on behalf of Davis by attorneys at Korein Tillery LLC, the same law firm representing the plaintiffs in the Batton suits. Davis is a resident of North Carolina who purchased a home in Greensboro in 2022 using a buyer agent from Allen Tate Real Estate LLC, a subsidiary of Hanna Holdings.

Like other buyer-initiated commission lawsuits, the Davis suit claims that Hanna Holdings conspired to “impose, implement, and enforce anticompetitive restraints that reduce price competition in the markets for buyer-agent services in violation of federal antitrust law and state antitrust statutes, consumer protection laws, and common law.”

“Defendant’s unlawful, anticompetitive conduct causes America’s home buyers to pay inflated commissions for broker services they misrepresent are free, to pay inflated prices for the homes they purchase, and to receive reduced quality broker services,” the complaint states.

Additionally, the suit takes aim at the rules of the National Association of Realtors (NAR), including the trade group’s Participation Rule, which requires listing brokers to make a blanket offer of compensation to the buyer’s broker in order to list a property on a Realtor association-affiliated MLS.

“These rules, which include a requirement that sellers set aside a portion of the purchase price for buyer-agent commissions, prohibitions on modifying the commission, and permission to filter listings by commission, all enable NAR and its members to maintain buyer agent commissions at supra-competitive levels unrelated to brokers’ experience or the services provided, steer home buyers away from lower commission homes, and drive out discounters — among other harms,” the complaint states.

“NAR’s rules, policies, and practices have been adopted and enforced by NAR members, including NAR MLSs, and are, therefore, agreements among competing real estate brokers. Defendant’s and its coconspirators’ implementation of and adherence to these agreements is manifestly anticompetitive.”

In addition to Hanna Holdings, Anywhere Real Estate, RE/MAX Holdings, Keller Williams Realty, HomeServices of America, Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate Group and Douglas Elliman are listed as co-conspirators.

The suit is seeking class-action status for a nationwide class defined as persons who purchased residential real estate that was listed on a Realtor-affiliated MLS between Dec. 1, 1996, and the present.

The plaintiff is demanding a jury trial, as well as damages and a permanent injunction that “permanently enjoin and restrain Defendant from establishing the same or similar rules, policies, or practices as those challenged in this action in the future.”

Hanna Holdings told HousingWire it did not wish to comment on the allegations.

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