Amid the growing landscape of litigation in the industry, a real estate broker is claiming his livelihood has been put at risk, alleging that he is being retaliated against for suing the National Association of REALTORS® (NAR).
In his latest legal volley against the trade group, broker Maurice Muhammad (who is representing himself in the lawsuit) is requesting a protective order against NAR and other local organizations, claiming they revoked his membership and access to Multiple Listing Service (MLS) without warning or explanation.
“As a result of the wrongful termination, the plaintiff and his five agents have been unable to input new listings, complete transitions or continue operations in the real estate market,” reads the motion filed in the U.S. District Court in Eastern Pennsylvania on December 5.
It also asserts that Muhammad has made “multiple attempts to resolve this issue with Defendants but has not received satisfactory response or resolution.”
Muhammad tells RISMedia he believes the situation is retaliatory because of his October antitrust lawsuit filing against NAR, the Pennsylvania Association of REALTORS® and the Greater Lehigh Valley MLS (GLVMLS). He says that he has had to shut down the operation of his office since November 30.
“If they were going to terminate my membership, they should have refunded me the fourth quarter (dues),” Muhammad says. “These are the tactics that have been used to force you to pay.
“I’m running the risk of losing agents and embarrassment,” he adds. “I won’t get these agents back if they can’t get on the MLS.”
Obtaining a protective order hinges on whether a plaintiff will suffer “irreparable harm if the request isn’t granted. At the same time, it also calls for “the balance of hardship” to favor the plaintiff.
“The inability to conduct these critical activities is devastating to Plaintiff’s brokerage, Progressive Realty, and has caused significant loss of revenue and business opportunities,” the motion reads.
Per the court document, Muhammad is seeking a full restoration of his access to MLS services, a refund of payments for the services that were withheld and compensatory damages “for the harm caused by the wrongful termination of his MLS services, including lost income and other business-related damages.”
NAR declined to comment on Muhammad’s latest motion, but maintained its previous stance that the trade group “represents a broad membership across the United States and deeply values diversity, equity and inclusion.”
“We strongly advocate for fair housing practices and inclusive policies that enable homeownership, and our commitment extends to both the millions of consumers and the real estate professionals who work on their behalf,” an NAR spokesperson said in an emailed statement.
Muhammad’s lawsuit accuses the trade groups of federal civil rights statutes, discriminatory practices, violating antitrust lawsuits and a list of other allegations that center around membership requirements to access the MLS services.
According to his October complaint, the membership requirement by the national and local organizations “creates a coercive environment that disproportionately affects minority professionals who lack the financial resources to afford mandatory membership fees.”
The sentiment isn’t exclusive to the Pennsylvania-based broker, as lawsuits raising similar issues with NAR’s membership requirement have sprouted recently.
In August, a trio of real estate professionals in Michigan sued NAR and their local associations over MLS membership requirements. The legality of restricting MLS access currently depends on jurisdiction, with different federal courts offering conflicting rules.
More recently, NAR was hit with two more antitrust lawsuits over membership requirements in November, one filed on November 1 in the U.S. District Court in Central California and the other on November 25 in the U.S. District Court in Wichita Falls, Texas.
Like Muhammad, both lawsuits take issue with alleged monopolistic practices perpetuated by NAR and local groups through membership requirements to access MLS services.
“It’s a pattern that’s being used by (NAR) to force you to pay and just keep on sucking the money out of the smaller brokerages, which is what makes it unfair and makes it a violation of the antitrust laws, because it’s hindering the smaller brokerages from being able to be successful in business because if we don’t pay these fees,” Muhammad says.
In a recent interview with RISMedia, he doubled down on those claims, arguing the alleged discriminatory practices have contributed to a systemic issue that has impacted professionals across different groups.
Muhammad contends that national and local organizations have also been “heavy-handed” in their disciplinary responses to minority professionals amid scrutiny compared to what he describes as “light-handed treatment” for non-minority members.
“Then there is this disparate treatment and microaggression when it comes to people of color,” he says.
He also takes issue with alleged limitations of growth and leadership opportunities for people of color in the industry.
Having served on different committees at the state and local levels for trade group associations, Muhammad says his ability to climb up the ranks has been limited.
“I’ve never been able to rise above certain levels other than the DEI (diversity, equity and inclusion) committee on the local level, and it’s controlled,” he says, explaining that higher roles were afforded to women or members of other protected groups in the name of DEI instead.
“That ends up happening, but we never rise to that position of leadership to make a difference where we can affect the income for our community,” Muhammad continues.
Muhammad’s lawsuit adds another layer to the legal issues facing the industry overall, as real estate professionals grapple with shifting tides and contentious policy changes in the wake of large-scale commission lawsuits and settlements.
While his allegations appear to be a separate issue, Muhammad tells RISMedia that his litigation against NAR and local associations is rooted in his desire to ensure the survival of minority professionals’ businesses as the industry and its practices continue to evolve.
“That’s the biggest (reason) for this lawsuit,” he says. “The long-reaching effects of what took place (in those lawsuits and settlements) are going to hit our business in a much harder way than anybody else, so we’re getting ahead of what we see coming.
There had been no ruling on Muhammad’s motion for a protective order at press time.
