LegalReal Estate

DOJ launches formal inquiry into California Association of Realtors’ standard forms

The inquiry is delaying the release of forms related to the business practice changes outlined in NAR’s settlement agreement

The forms the California Association of Realtors provides its members are the subject of a formal inquiry by the Department of Justice, according to an email the trade group sent to “industry leaders” on Thursday, obtained by HousingWire.

In the email sent by Melanie Barker, the president of CAR and Sara Sutachan, the senior vice president and chief strategy officer at CAR, Barker and Sutachan noted that CAR issues new and updated standard forms every June. This year, the state association said it is releasing 67 new or modified forms, 21 of which are related to the business practice changes outlined in the National Association of Realtors’ nationwide commission lawsuit settlement agreement.

According to the email, the standard forms are set to be released on June 25, but the release of the 21 forms related to the business practice changes will be delayed because the DOJ wants to review the forms.

In drafting these forms, Barker and Sutachan wrote that CAR carefully reviewed NAR’s settlement, as well as statements made by the DOJ and feedback from its members. However, due to the formal inquiry by the DOJ, CAR said it requires additional time to consider the DOJ’s concerns.

“CAR forms have been the gold standard for conducting California real estate transactions in a systematized, ethical, and transparent way for decades, and we are working diligently to create the next set of forms that will continue to protect our members and serve consumers,” Barker and Sutachan wrote in their email. “We are in the midst of significant changes within our industry and, as such, there will be times when we have to adjust our plans, our timeframes, and even our expectations. As we’ve done, we will continue to keep you, our valued members, informed every step of the way.”

In an emailed statement, CAR’s general counsel Brian Manson wrote that the delay in the release was “out of an abundance of caution,” noting that it is waiting for additional information.

“We believe it is prudent to take additional time to consider the concerns comprehensively,” Manson wrote.

The DOJ did return a request for comment.

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