Another day, another lawsuit taking aim at the National Association of REALTORS® (NAR) and its long-standing policies. But this one doesn’t center on buyer broker compensation like the Sitzer-Burnett or Moehrl cases. Instead, it targets a different piece of NAR’s structure—the so-called “three-way agreement” and its Variable Dues Formula (VDF), which, according to a new federal complaint, forces brokers to either pay dues for agents who don’t want to be members or disassociate with them altogether.
Filed June 9 in the Central District of California by broker John Diaz, the complaint alleges that NAR, the California Association of REALTORS® (CAR), and two local associations (Lodi and Central Valley) have violated federal antitrust law through a coordinated effort that restricts competition and punishes brokerages that don’t fall in line.
Here’s the core of the issue: under the VDF, when a brokerage’s “designated REALTOR®” joins a local association for access to the MLS and standard forms, that broker must also pay NAR and state dues on behalf of every licensee affiliated with the firm—even those who choose not to be REALTORS®. It doesn’t matter if those licensees don’t use the MLS or forms, or work only in commercial or leasing. They either pay, or the broker does, or they can’t work under that broker’s license. Diaz argues that this is an unlawful tying arrangement and a de facto boycott of non-member agents.
It’s not a new complaint in the industry. In fact, I’ve had several agents over the years ask about alternatives to association membership—especially those focused on niches like commercial leasing or referral-only work. NAR claims to offer some flexibility through the “Limited Function Referral Office” (LFRO) setup, but the hoops and limitations tied to it make it impractical for many. And even where MLS-only access is technically possible, it’s often buried deep in local association policies, inconsistently available, or stripped of essential tools like legal forms, which CAR charges non-members nearly $1,500 a year to access.
This new lawsuit argues that these practices not only create artificial financial barriers for agents, but also restrict broker autonomy and inflate costs for brokers who want to build flexible, modern teams. The plaintiff is seeking to dismantle the VDF entirely and open the door to alternative brokerage models that don’t require full association buy-in just to operate.
It’s hard to ignore the timing of all this. NAR is still reeling from multiple commission-related lawsuits, facing scrutiny from the DOJ, and trying to defend what’s left of its traditional model. This case, while very different in focus, adds another layer to the broader conversation around association power, access to MLSs, and competition in residential real estate.
As always, the full complaint is shown below for those who want to read it for themselves. But if you’re a broker who’s ever wondered why you’re writing a dues check for an agent who doesn’t use the MLS or forms, this case is worth watching.