Real Estate Newsletter

  • Compensation for Slip and Fall Injuries
    There is no concise formula to determine whether injuries sustained from a fall are the responsibility of another. Each case is individually evaluated to see if the business or property owner was careful to prevent any injuries. The... Read more.
  • The Basics of Zoning Laws and Ordinances
    “Zoning” is a system of laws and ordinances by which the use and development of land is regulated. The concept of planning for the development of a city or town is well established. The concept of zoning, however, is more... Read more.
  • Establishing a Clear Boundary Between Adjoining Property Owners
    In many cases, adjoining property owners are uncertain as to where boundary lines actually run. Even when land deeds contain legal descriptions of the property named therein, the difficulty of discerning ambiguous descriptions and... Read more.
  • Construction Workers Frequently Exposed to Asbestos
    Asbestos is a fibrous material with high tensile strength and flexibility, widely used for its resistance to heat, chemicals and electricity. In the construction industry, asbestos is typically found in installed products such as pipe... Read more.
Real Estate News Links

Do Antitrust Laws Affect Real Estate Brokers?

The federal Sherman Antitrust Act prohibits any combination, contract or conspiracy in restraint of trade, violations of which are subject to civil and criminal sanctions.

The Sherman Antitrust Act became law in 1890. However, it was only recently that real estate professionals became affected by the Act’s policy to support competition in a free marketplace by prohibiting predatory and unfair business practices. This was based on a 1980 U.S. Supreme Court ruling that real estate professionals and organizations are subject to the requirements and prohibitions of the Sherman Antitrust Act.

As applied to the real estate brokerage industry, the majority of civil and criminal actions have stemmed from the following prohibited practices:

  • Price fixing
  • Group boycotts
  • Tying arrangements
  • Territorial market divisions

Price Fixing

Price fixing is when competing brokers agree to set commissions. Prohibited actions extend to all agreements that have the effect of manipulating the price of real estate services. Furthermore, such agreements do not have to be in writing for illegal price fixing to occur.

Group Boycotts

Group boycotts are concerted refusals to deal based on an agreement among industry members for the purpose of driving a competitor out of business. In the real estate industry, this usually occurs in the context of exclusions from multiple listing services and local real estate boards.

Tying Arrangements

A tying arrangement is when a sale or purchase of one product is conditioned upon the sale or purchase of another product. In real estate, this usually happens in the context of a “list-back” agreement, where a broker, for example, is willing to sell parcels of land to a developer only upon the condition that the developer agrees to list the completed homes on the parcel with the same broker.

Territorial Market Divisions

Territorial Market Divisions occur when competitors agree not to compete with each other in certain geographical areas. An example of this is when real estate firms enter into an agreement not to enter into designated locations in an effort to avoid competing with each other.

Share This Page: