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Real Estate Commission Lawsuit Explained

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Real Estate Commission Lawsuit Explained

A series of lawsuits seeks to challenge the practice in which commission agents receive a commission from the sale of a home, with the bill being footed by the seller. In other words, when you sell a home, you end up giving a slice to both the buyer commission agent and the seller commission agent.

In one such lawsuit, a Federal Jury has directed the National Association of Realtors, which includes some of the nation’s biggest real estate brokerages, to pay almost $1.8 billion in damages after it was revealed that they had artificially inflated real estate commissions paid to agents.

The lawsuit was filed in 2019 and represented 500,000 home sellers in Missouri and some border towns. The verdict said that the defendants had unlawfully asked the home sellers to pay the brokers representing the buyer, which contravened federal antitrust law.

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The matter is still not final, and if the damages amount to thrice the damages, then the plaintiffs could be receiving more than $5 billion.

Meanwhile, the NAR spokesman Mantill Williams said that it will appeal against the jury’s verdict and request a reduction in the damages awarded by the jury.

NAR, along with several real estate brokerages, has already been slapped with several lawsuits over the real estate commission rules.

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Post the positive verdict in the 2019 case, a slew of lawsuits were instituted in the U.S. District Court for the Western District of Missouri.

The lawsuit seeks to represent any person in the U.S. who has sold a home in the last five years. The lawsuit has named several brokerage companies, including Redfin Corp., Weichert Realtors, and Compass Inc., and trade associations.

One of the attorneys who represent the plaintiff, Michael Ketchmark, said that the issue has nationwide significance since it had cost American citizens a whopping $60 billion in extra real estate commissions.

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The lawsuit has highlighted an NAR rule that stipulates that home sellers must pay the agent who represents the homebuyer whenever an advertisement is made on a local Multiple Listings Service where most of the U.S. homes are listed for sale.

The above fees are in addition to the commission for their listing agent or broker. The complaint also underlines the NAR rules which forbid the buyer’s agent from effecting a home purchase which offers contingent on the reduction of their commission.

The plaintiffs contended that the NAR rules force the home sellers to pay a cost that in a competitive market scenario would be borne by the buyer. Also, the NAR rules manipulate and keep the commissions for a homebuyer’s agent artificially high.

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In the absence of NAR’s “Mandatory Offer of Compensation Rule”, the buyer will foot the bill for their agent’s real estate commission and this will increase competition and lower commissions among the agents, ultimately benefiting the consumer. However, the NAR does not accrue to this view and says that listing brokers making offers of compensation to buyer brokers is the best for consumers. It argues that the present system will open doors for more buyers a chance to own a home and also give sellers greater access to more buyers. The NAR also pointed out that as per trade association policies offer of agent compensation be made without specifying an amount and it could be as trivial as $1.

However, some associations are making amends, and in July 2023, the independent Bright MLS, which covers some states in the eastern part of the country, altered rules and negated the need to include an offer of agent compensation at all. That still falls within NAR’s guidelines.

As reported by the Economic Times, With soaring home prices, with the average national median sales price to $394,300 as of September 2023, agent’s real estate commissions have also soared.

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Buyer agent’s commissions when added increase the sale price of the house. If sellers don’t have to pay buyer agents, there will be less inflation and the buyers on their part can negotiate to reduce the commission and thus end up paying less.

Also Read:

Smartmatic vs. Fox News – A Billion-Dollar Defamation Lawsuit

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Govt expedites Byju's financial inspection, firm says complied with MCA directions

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Govt expedites Byju's financial inspection, firm says complied with MCA directions

The government has expedited the inspection of Byju’s financial books, with the edtech company responding with necessary documents. Byju’s stated that it has cooperated fully with the Ministry of Corporate Affairs (MCA) and hopes for a swift resolution of the matter. The inspection is ongoing, as per sources, and the company has implemented corporate governance measures.

According to Byju’s spokesperson, “The company has received multiple communications requesting information and documents from time to time, and it has cooperated completely and responded with all necessary responses along with documents to the MCA.” The company has also informed government officials about the advisory council’s formation and compliance with MCA directions. Byju’s has closed its financials for FY 2022 and filed necessary documents with the ROC, aiming for a timely resolution of the matter.

Key shareholders voted last week to remove Byju Raveendran as CEO, but he denied being fired, stating that the management and Board remain unchanged. In an email to employees, Raveendran emphasized that the rights issue had a significant response, and it is “business as usual” at the company. Byju’s expressed confidence in the ongoing process and aims to address any concerns promptly.

The company’s proactive response amidst the government inspection reflects its commitment to transparency and compliance. By cooperating fully with the MCA and implementing corporate governance measures, Byju’s is working towards resolving the matter swiftly. As the inspection continues, the company’s focus remains on maintaining stability and operational efficiency despite recent developments.

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Trulife Distribution Lawsuit Explained (SO FAR)

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Trulife Distribution Lawsuit Details

The Trulife Distribution lawsuit has everything that could label it as a captivating legal drama.

The lawsuit pits Trulife Distribution, a wellness company, against Nutritional Products International (NPI).

Nutritional Products International (NPI) was founded by Mitch Gould; his son, Brian Gould, who had previously served as the president of NPI, is the CEO of Trulife Distribution.

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It is this family connection that makes the legal drama much more gripping.

The lawsuit was instituted by NPI in a U.S. District Court in Florida in May 2022.

The lawsuit alleges that Trulife Distribution had adopted fraudulent means to progress its business interests.

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Some of the charges leveled against Trulife Distribution include misleading trade practices, fake advertising, and the issuance of misleading statements that were aimed at deceiving the existing clientele of NPI.

The lawsuit specifically accuses Trulife of wrongly claiming credit for case studies and testimonials that rightfully belonged to NPI.

NPI alleges that Brian Gould had access to their case studies during his tenure as an executive.

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It was then passed off as Trulife Distribution success stories to win business and sign clients.

It also alleges that Trulife used a fraudulent email address that would divert NPI’s business.

NPI claims that it had to endure huge losses as a result of the fraudulent activities of Trulife Distribution, and the deceptive practices led to a lot of confusion in the marketplace within the nutrition, health, and wellness industry.

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This is not the first time that the two companies have been mired in a legal tussle.

The lawsuit also claims that the true extent of the fraud became evident in 2019, that the former employee had cloned NPI operations in entirety to further Trulife Distribution business interests.

The disputes were at that time resolved through mediation in 2021.

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The charges are serious and, if proven, would constitute a violation of some state and federal laws, which include Florida’s Deceptive and Unfair Trade Practices Act, the federal Lanham (Trademark) Act, and the federal Anti-cybersquatting Consumer Protection Act.

The fallout of the Trulife Distribution Lawsuit

The outcome of the lawsuit will have serious fallout on the operations, reputation, and financial standing of Trulife Distribution, and it could be asked to pay hefty compensation as damages and also face injunctions which could affect its future actions.

The outcome of the lawsuit could also have serious consequences for the health and wellness distribution industry and also affect investment and consumer confidence in the industry.

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Also Read: Dr Amy Sprole Lawsuit, Plastic Surgeon Accused Of Negligence

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Zerodha CEO Nithin Kamath suffers mild stroke, on path to recovery

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Zerodha CEO Nithin Kamath suffers mild stroke, on path to recovery

Zerodha Co-founder and CEO Nithin Kamath recently disclosed that he had suffered a mild stroke around six weeks ago, despite being a fit individual. In a post on X, Kamath mentioned possible reasons such as poor sleep, exhaustion, dehydration, and overworking out, following the passing away of his father.

Kamath shared that he is on the road to recovery, noting improvements in his condition from not being able to read or write initially to now being able to do so with a slight droop in his face. He emphasized the importance of knowing when to slow down, despite being health-conscious.

The Zerodha CEO’s health update comes as the company reported impressive financial numbers for the financial year 2022-23 (FY23), with a revenue of Rs 6,875 crore and a profit of Rs 2,907 crore. This marked a significant growth of 38.5 per cent in revenue and 39 per cent in profit compared to the previous financial year.

In FY22, Zerodha had reported revenue of Rs 4,964 crore and a profit of Rs 2,094 crore. Despite the positive financial performance, Kamath’s health scare serves as a reminder of the importance of self-care and monitoring one’s well-being, even for those who lead active lifestyles.

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