PENDING APP- A BLESSING FOR REAL ESTATE PROFESSIONALS
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PENDING APP- A BLESSING FOR REAL ESTATE PROFESSIONALS
Note that if a prospective purchaser has actual knowledge of a pending suit, then the lis pendens doctrine applies whether or not a statutory notice has been filed in the real property records. A buyer cannot know about a lawsuit (from any source) and still claim to be a BFP. Sommers v. Sandcastle Homes, Inc. 521 S.W.3d 749 (Tex. 2017).
Lis pendens are a useful tool but are subject to abuse as well as potential consequences for wrongful filing. Lis pendens must be employed in strict compliance with the statute and not merely to gain advantage in a dispute over some monetary aspect of a real estate closing.
Copyright 2022 by David J. Willis. All rights reserved. Mr. Willis is board certified in both residential and commercial real estate law by the Texas Board of Legal Specialization. More information is available at his website, www.LoneStarLandLaw.com.
The Patent Application Information Retrieval (PAIR) system provides USPTO customers a safe, simple, and secure way to retrieve and download information regarding patent application status. Private PAIR provides secure real-time access to pending application status and history using a registered USPTO.gov account.
Reviewing a civil antitrust action against professional real estate organizations, we hold certain group conduct constituted both an unlawful restraint of trade permitting injunctive relief, and unlawful business activity allowing imposition of civil penalties. The additional issue of whether the associational policy of refusing to sell investment multiple listing service information to otherwise qualified persons unless they also purchase general memberships in the associations is an illegal tying arrangement was not decided below and should be remanded for further findings.
For 20 years San Diego Board of Realtors (SDBR) with the approval of the California Association of Realtors (CAR) and the National Association of Realtors (NAR) (collectively: the associations) openly encouraged its members to maintain uniform commission rates on residential sales (generally 6 percent) and a standard percentage at which to split sales commissions between listing and selling brokers (generally 50/50) within the greater San Diego market. The rates were originally set by an express agreement among members of the SDBR, the La Mesa Board of Realtors and the El Cajon Board of Realtors (all presently combined in a multiple listing service.) SDBR publicized the uniform rate to its membership, consisting of competing real estate brokers and salespersons.
In Palsson the court struck down two separate policies of the Marin County Board of Realtors as group boycotts. In restricting MLS access to the board's own members Marin substantially stifled competition in the real estate market. Similar findings and conclusions of the trial court here are overwhelmingly supported by statistical exhibits and testimony.
However, the associations contend Palsson's holding was not based solely on the membership restriction of the MLS above, but on that [120 Cal. App. 3d 468] factor plus the fact Marin limited board membership to persons "primarily engaged" in the real estate business. Palsson, a part-time salesperson, could not subscribe to the MLS though he were willing to join the association in order to do so. By contrast SDBR points to its nonrestrictive membership access.
The associations have lately provided us with a copy of the recent decision of the Iowa Supreme Court in State v. Cedar Rapids Bd. of Realtors (Iowa 1981) 300 N.W.2d 127, interpreting Palsson as holding "the combination of two Board bylaws unreasonably denied nonmembers access to the Board's MLS." (Id, at p. 130; italics added.) We find this interpretation unpersuasive. The same argument was presented to the trial court which thoughtfully considered and correctly rejected it. (See also Glendale Bd. of Realtors v. Hounsel (1977) 72 Cal. App. 3d 210, 212 [139 Cal. Rptr. 830].) The court in Palsson first considered whether the appeal was moot because the "primarily engaged" bylaw was deleted before the hearing on appeal. The court noted even if this were so the appeal also separately attacked another board policy limiting MLS access to members. This rule prevented MLS access to every nonmember, even one primarily engaged in the real estate trade and eligible for membership. The court analyzed each restriction separately, found each to have anticompetitive effects far outweighing any possible business justification (the rule of reason test) and separately disapproved the MLS limitation for access to board members only. (Marin County Bd. of Realtors v. Palsson, supra, 16 Cal. 3d 920, 938.)
Where by conditioning a sale of one item to the sale of another a seller has the economic power to coerce buyers to forego exercise of their independent judgment as to the merits of the tied product, thus shielding it from competitive market forces, there is a restraint on competition. In fact, "[t]ying agreements serve hardly any purpose beyond the suppression of competition." (Standard Oil Co. v. United States (1949) 337 U.S. 293, 305-306 [93 L. Ed. 1371, 1382, 69 S. Ct. 1051].) The greater the market control over the tying product (here the investment MLS) the greater the economic power to restrain competition in sales of the tied product (here real estate professional association memberships).
The Supreme Court inMarin County Bd. of Realtors, Inc. v. Palsson, supra, 16 Cal. 3d 920, has ruled when a multiple listing service corresponds directly with and touches upon the business activities of its members, and the association has the power to shape and influence the economic environment of its particular market the association's MLS must be made available to nonboard members, although such persons may be charged a reasonable fee for its use. (Id, at p. 937.) While Marin County did not turn upon the question of unlawful tie-ins, its finding necessarily determines sale of board memberships are separate from sale of MLS books. Similar factors are present here: Nonmember real estate brokers can be charged separately for the SDBR investment MLS, SDBR offers the MLS separately to its own members, and the investment MLS is not a component part of board membership. The trial court's actual severance of the residential MLS factually confirms the severability of the SDBR investment MLS.
On remand the trial court must determine if the evidence shows SDBR enjoys sufficient economic power in the tying product (investment MLS) to appreciably restrain competition in the tied product (real estate association memberships). (Suburban Mobile Homes, Inc. v. AMFAC Communities, Inc., supra, 101 Cal. App. 3d 532, 549.)
The evidence shows local real estate brokers deal with nonhomogeneous products involving differentiated services and, in a truly competitive market, one would expect a wide variety of rates and prices. In the absence of either a perfectly competitive industry or governmental [120 Cal. App. 3d 480] price control, the degree of uniformity in rates shown here gives rise to an inference the rates are artificially and collusively stabilized.
Adoption of standard rates of real estate commissions through concerted efforts of a real estate board, similar to those actions engaged in by SDBR and other realtor boards in establishing uniform rates in San Diego County, was condemned as illegal per se price fixing violating the [120 Cal. App. 3d 481] Sherman Act, section 3, as early as 1950 inUnited States v. Real Estate Boards (1950) 339 U.S. 485 [94 L. Ed. 1007, 70 S. Ct. 711].
No party here contends the uniform prices were originally set other than by collusive actions of the local realtor boards with the blessing of the state and national associations, or that their actions in promoting adherence to that policy were other than per se violations of applicable antitrust legislation. They do contend, however, these transgressions, and therefore their liability for them, abruptly ceased when, in 1971 and early 1972, each adopted a 14-point policy stating unequivocally that commissions and splits were henceforth to be set individually by their members and each disavowed the previous policies. Thus, after more than 20 years of SDBR and association propagandizing the industry, and their members in particular, to the effect it was not only economically disadvantageous to cut prices or offer less than a 50/50 cooperative split, but a sanctionable breach of ethics as well, the stated policies changed.
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Backing out of a home sale can have costly consequences. And legally speaking, it can be very difficult to do once a real estate contract, officially known in most places as a purchase and sale agreement (P&S or PSA for short) has been signed.
Most real estate contracts have contingencies that give sellers cause to back out. For instance, the seller may say they will only sell their property if they can purchase a new home for themselves within 30 days. If they are unable to find a property, they can cancel the sale of their current home per the contract. 350c69d7ab