By Dean Seal
Re/Max Holdings has agreed to pay $55 million to resolve two class action lawsuits challenging a rule that requires home sellers to pay commissions to brokers that represent the buyers of their homes.
The real-estate brokerage disclosed the settlement in a securities filing on Monday, saying it has also agreed to make “certain changes to its business practices,” though the filing didn’t provide further details.
Re/Max said the settlement isn’t an admission of liability or a concession of the validity of any claims in the litigation, and that it continues to deny the suits’ allegations.
Settlement documents have yet to appear in court records for the pair of cases–one in Missouri and another in Illinois–that are included in the resolution.
A spokesperson for Re/Max said the agreement was in the company’s best interest in light of the significant risks and costs of continued litigation, but didn’t disclose terms of the settlement.
“Given confidentiality agreements and ongoing proceedings, RE/Max has no further comment at this time,” the spokesperson said.
Both lawsuits accuse the National Association of Realtors and the four largest national real estate broker franchisors, including Re/Max, of conspiring to impose the buyer-broker commission requirement and forcing home sellers to pay inflated commissions.
Co-defendant Anywhere Real Estate, formerly known as Realogy Holdings, reached a deal earlier this month to exit the pair of lawsuits by paying $83.5 million in damages. The other co-defendants are HomeServices of America and Keller Williams Realty.
Representatives for the National Association of Realtors and Keller Williams didn’t immediately respond to requests for comment. A spokesperson for HomeServices of America declined to comment.
Re/Max said it will use available cash to fund the settlement, of which it will pay 25% on Sept. 29, another 25% within 10 business days of preliminary court approval of the settlement, and the final 50% within 10 business days of final settlement approval.
In conjunction with the disclosure, Re/Max reaffirmed its third-quarter and full-year guidance.
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