Real Estate Newsletter

• Foreclosure Considerations in Bankruptcy
  Prior to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), directly upon filing for federal bankruptcy relief, the bankruptcy court would issue an “automatic stay.” The stay is... Read more.
• 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.
• Conservation Easements Role in the Regulation of Private Land
  The Fifth Amendment to the U.S. Constitution states, in part, that private property shall not be “taken for public use, without just compensation.” In order to take property, the government must first condemn it through... Read more.
• Land Sale Scams Covered by ILSFDA
  Prompted by an increase in land sale scams in the 1960’s, Congress passed the Interstate Land Sales Full Disclosure Act (ILSFDA) in 1968. Administered by the Federal Department of Housing and Urban Development (HUD), the ILSFDA... Read more.

• Real-estate bubble risks are dwindling across the world with higher interest rates taking froth out the market, UBS says
• ‘Million Dollar Listing’ Star Co-Founds Media Business About Real Estate
• Rich Dad Poor Dad’ author Robert Kiyosaki says Airbnb is set to spark a real estate market crash
• Why is the current housing market so expensive? “Blame the boomers,” one economist says.
• Washington Couple Defends Their Wing Walking Business Despite Recent Lawsuit and FAA Investigation

Antitrust Laws Restrict Broker Conduct

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.

© 2023 NextClient.com, Inc. All rights reserved.