November 14, 2023

Article from Josh McFall, CEO, Minnesota Realtors:  
Minnesota Implications: Case of Burnett v. NAR et al
What you need to know
News of the large and sweeping class action lawsuit verdict, which held NAR and several brokerages liable in a Federal Missouri Court Room last week, has many asking valid questions about the future of the real estate industry and how compensation will work going forward. Here are some things to consider from a Minnesota perspective.
Although the lawsuit was decided in federal court, it only affects transactions made in four Missouri MLSs. No ruling or judgment has been made in Minnesota.
Further, the lawsuit itself will be appealed, as NAR and the Co-Defendants have pledged this will take time-perhaps years-to complete.
Minnesota Realtors® (MNR), along with NAR and our local MLS boards, will be considering options for conducting future transactions regardless of the outcome of lawsuits and appeals, so that we can ensure that buyers and sellers continue to have good representation, and that compensation can be properly allocated for that representation.
What does it mean for Realtors® in Minnesota?
Formally[ST1] , there is no impact on Minnesota. Although other lawsuits may be filed which may include Minnesota parties, we should continue assisting our clients.
We are not a typical state in that we have some legal requirements that help protect consumers and agents alike. 
When dealing with a potential residential real estate transaction we must, at first substantive contact, present an agency relationship form and explain in detail the representation options to clients. (Minn. Stat. § 82.67)
Second, to be considered a buyer representative in Minnesota for residential transactions there must be a written representation agreement. That representation agreement must include details of compensation and how we are to be paid and by whom. (Minn. Stat. § 82.66, Sub. 2) The statute particularly requires the following language in our buyer representation agreements, "NOTICE: THE COMPENSATION FOR THE PURCHASE, LEASE, RENTAL, OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER AND THE BROKER'S CLIENT."
Finally, Minn. Stat. § 82.70, Subd. 3 prohibits a licensee from receiving any undisclosed compensation. If a buyer's broker is receiving any compensation from a party other than the buyer, it must be disclosed to the buyer prior to signing a purchase agreement. MNR's compensation disclosure form is designed to ensure that this statutory requirement is satisfied.
These consumer protections were established to ensure that parties understand their options in pursuing a real estate purchase or sale.
What can we do?
Take additional time to discuss compensation with your clients. Realtors® have duties both under Minnesota law and under the Code of Ethics to fully explain both representation and compensation. (Minn. Stat. § 82.67 and SOP 1-12 and 1-13).
Educate yourself on the lawsuit and NAR's response to the decision. There is no reason to shy away from the lawsuit or attempt to minimize its effect on the real estate business, but there is also no reason to suggest that the sky is falling. Let your clients know that all transactions on the MLS-both past and present-are legal and binding.
Continue to sell your expertise! That's right, the value of having a real estate expert in your corner during these massive transactions is why people need our services and why they are worth the compensation paid. Whether someone is a first-time homebuyer or buys and sells property for a living, the expertise that we provide about value, markets, and contracts is the reason people hire us. 
Also, keep pushing for higher standards of professionalism, even if it's just leading by example. 
Change to our business is inevitable regardless of lawsuits. Be prepared and be client focused and all will be well.
Josh McFall, CEO
Minnesota Realtors®