What is “Unlawful Tying?”
Tying – When an organization requires membership in another organiztion as a prerequsite for membership.
Tying is not always unfair or illegal, but it can be, especially when the denied membership is a service required for success (such as MLS).
Here is an example of tying:
In some jurisdictions, one must be a REALTOR to access (join) the MLS. That requirement is a form of “tying.”
Is this requirement for membership in one organization to belong to another organization illegal, or unfair?
In California, Florida, Alabama and Georgia (Thompson and Palsson cases), the courts have decreed that one need not be a REALTOR member to access MLS. In those states, to require such would be an example of illegal tying.
From the White House Executive Order of July 9, 2021,
the Administration (particularly the DOJ and the FTC) will be looking into, among other things:
(vi) unfair tying practices or exclusionary practices in the brokerage or listing of real estate;
Another example of Tying that the DOJ may be looking at is what is referred to as the “Three Way Agreement.”
To join a local association of REALTORS, you must also belong to a State Association, and the National Association, these memberships are “tyed.”
Question of the day: Might the DOJ take a position that the current arrangement between National, State, and Local Associations is unfair or illegal tying? Might this be used as a bargaining chip by the DOJ to gain NAR cooperation on other charges?
Time will tell.