Settlement reached with Columbia MLS
2009/05/05, 2:21 pm
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COLUMBIA – A settlement has been reached in a lawsuit in which the U.S. Department of Justice claimed Columbia’s Consolidated Multiple Listing Service’s rules for allowing brokers to use the listing service caused consumers to pay more for residential real estate brokerage services in the Columbia area.

The Department’s Antitrust Division filed its proposed settlement in U.S. District Court in South Carolina on Monday. If approved by the court, the proposed settlement would resolve the Department’s antitrust concerns.

“Today’s settlement will remove unlawful impediments to competition for real estate brokerage services in the Columbia area and will lead to more choices and lower brokerage fees for South Carolina consumers,” said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. “For most Americans, purchasing a home is the most significant purchase of their life. This settlement demonstrates the Department of Justice’s continuing commitment to preserve competition in the real estate brokerage industry.”

The CMLS said in a statement the settlement allows it to maintain its position on several issues that are meant to protect the consumers’ interest, safety, security and trust of professionals in the industry. Among them, it will continue to require background checks for its member companies; only do businesses with real estate companies with Errors and Omissions Insurance; and continue to require electronic key boxes that record and immediately notify the listing agent about who is trying to access a listed property.

“In conclusion, with this settlement we can get back to the focus of helping take care of the Midlands current and would-be homeowners with the same level of service and professionalism that they have come to expect,” the CMLS said.

In May 2008, the Department’s Antitrust Division filed a civil antitrust lawsuit against CMLS in U.S. District Court in South Carolina, challenging policies and rules that restrained competition among brokers in Columbia in several ways.

According to the Justice Department, CMLS imposed prerequisites to membership that prevented some real estate brokers, such as those who would likely compete aggressively on price, from listing homes for sale in the MLS’s database, ensuring that those brokers could not compete in the Columbia area.

CMLS required applicants for membership to discuss the nature of their businesses with a committee of incumbent members and reserved the power to deny membership to brokers who they feared would compete too aggressively. CMLS also stabilized the price of brokerage services by forcing its broker members to provide a full set of brokerage services regardless of whether a client wanted the required services. The Department said that those rules prevented consumers from receiving the full benefits of competition, discouraged discounting, and threatened to lock in outmoded business models.

The proposed settlement with CMLS requires it to change those rules and prohibits it from adopting new rules that exclude real estate brokers from membership based on their business models or price structures.

The settlement also said:

–CMLS must allow any broker holding the appropriate license under South Carolina law to become a member and cannot continue to exclude brokers based on their business models.

–CMLS will repeal rules that denied Columbia-area home sellers the ability to hire a real estate broker to perform only the specific services the seller desired, at a lower cost than the seller would pay a traditional, full-service broker.

–CMLS also will repeal its requirement that its member brokers use only the single contract approved by CMLS, which blocked home sellers from alternative arrangements that allowed them to avoid paying any commission to their broker if the sellers found buyers for their homes.


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