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Second REBNY Commission Lawsuit Dismissed

The real estate industry is facing one less copycat commission lawsuit. On Thursday, Robert Friedman voluntarily dismissed without prejudice the lawsuit he filed in late December in U.S. District Court in New York against the Real Estate Board of New York and several brokerages, according to court filings.

The filings did not provide any insight into why the suit was dismissed.

Friedman’s suit was in regard to the 2021 sale of his Park Slope home, in which he paid a buyer broker commission.

At the time of Friedman’s transaction, REBNY, despite not being affiliated with the National Association of Realtors, had a rule similar to NAR’s Participation Rule, that required the listing broker to split the commission they earned in a home sale transaction with the buyer’s broker. According to Friedman’s initial complaint, this artificially inflated real estate agent commissions.

In Oct. 2023, REBNY announced changes to its rules, including a rule preventing listing agents from paying or offering to pay buyers’ agents compensation. Instead, if a seller wishes to compensate the buyer’s agent, they must pay the agent themselves. It is not required for a seller to compensate a buyer’s agent. The rule went into effect on the first of this year.

In addition to REBNY, the lawsuit named Douglas Elliman, Christie’s International Real EstateBrown Harris StevensSERHANT.CompassThe AgencyElegranEngel & VölkersR New YorkTerra HoldingsLeslie J. Garfield & Co., and Anywhere, as well as some of its affiliates, as defendants.

Since the start of the year, four new copycat lawsuits have been filed. While REBNY is no longer facing a suit from Friedman, it is still a defendant in the March suit, filed in early November, just days after a Missouri jury found  NAR, Keller Williams, and HomeServices of America liable for colluding to artificially inflate real estate agent commissions.

Compass, Christies and The Agency did not wish to comment on the dismissal, while the other defendants and counsel for the plaintiff did not return a request for comment.

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