Elliman settles broker commission lawsuits
Douglas Elliman is getting in on the nearly billion-dollar wave of residential firms settling broker commission claims.
The brokerage announced it will pay $7.75 million to settle claims from homesellers that it was among the firms that conspired to inflate commissions and violated antitrust laws. The National Association of Realtors and a slew of brokerages were named as defendants in a wave of copycat legal action after a guilty verdict in the landmark Sitzer/Burnett case centered on the trade group’s rules coupling commission offers for buyer and seller brokers.
The settlement is intended to mitigate legal costs and uncertainties, chairman Howard Lorber in a statement. The company said in a release the settlement is not an admission of wrongdoing.
Elliman’s first payment will come within 30 business days of preliminary court approval.
The deal is a reversal of the brokerage’s previously expressed plans to challenge the litigation, with Lorber previously warned investors of drawn-out process in Elliman’s fourth quarter earnings call in March.
“We believe the lawsuits, which are still in the very early stages and will likely take years to litigate, lack merit, and we intend to challenge them,” he said at the time.
The settlement brings the total pending amounts promised in similar deals to nearly $950 million. HomeServices of America last week settled for $250 million and Compass last month settled for nearly $58 million. NAR struck a $418 million settlement in March, which recently received preliminary approval.
Elliman executives are likely hoping the settlement gives a jolt to its stock value, which slid below $1.50 earlier this month and closed at $1.19 on Friday. The poor performance has lowered the brokerage’s market cap to $109 million, less than some of the apartments its agents have sold. Stocks run the risk of delisting if its value falls below $1 for more than six months.
The brokerage is slated to release its first quarter results on May 9.
Elliman posted its sixth consecutive quarterly loss in the fourth quarter, posting a $14.8 million deficit. That’s less than the $18.4 million it lost in the fourth quarter of 2022 but more than double its losses the prior quarter.
