Douglas Elliman has joined the growing list of brokerages that have settled the commission lawsuits.
In an 8K filed with the Securities and Exchange Commission (SEC) on Friday, the firm announced that it had reached a nationwide settlement agreement with the Gibson lawsuit plaintiffs.
According to the filing and an accompanying press release, the settlement covers Douglas Elliman and all of its subsidiaries. Additionally, the firm said the settlement is not an admission of liability, nor does Douglas Elliman concede or validate any of the claims asserted against it.
As part of the settlement agreement, Douglas Elliman will pay $7.75 million into an escrow fund within 30 days of the settlement’s preliminary approval. It will then make two payments of $5 million each, which are subject to certain financial contingencies, no later than Dec. 31, 2027.
One of the contingencies states that the first payment will be made if “as of December 31, 2025, Douglas Elliman’s Cash Balance is at least $40.0 million, or if Douglas Elliman’s Cash Balance is less than $40.0 million as of Dec. 31, 2025, but subsequently exceeds such threshold in any following month until Dec. 31, 2027.”
The second contingency payment is subject to similar terms, except that the first deadline is a year later on Dec. 31, 2026. The SEC filing also notes that if “Douglas Elliman’s Cash Balance does not exceed $40.0 million at any point from Dec. 31, 2025 until Dec. 31, 2027, then Douglas Elliman will not be responsible for either of the Contingent Payments.”
As of Dec. 31, 2023, Douglas Elliman had $119.8 million of cash and cash equivalents on its balance sheet.
In addition to the monetary settlement, the firm has also agreed to change certain business practices as part of the settlement agreement.
Like other brokerages that have settled, the terms of Douglas Elliman’s settlement include that it will require or encourage agents to make it clear to clients that commissions are negotiable; that agents will have the freedom to set or negotiate commissions as they see fit; and that agents will not be required to make offers of compensation or accept offers of compensation from cooperating brokers.
The firm also agreed that will not provide agents with any software that filters or restricts MLS listings based on the level of compensation being offered.
“The settlement agreement reflects Douglas Elliman’s commitment to mitigating future uncertainties and limiting legal costs, which will benefit our Company, agents and stockholders,” Howard M. Lorber, the chairman and CEO of Douglas Elliman, said in a statement.
“Our global network of leading agents and luxury brand continue to position Douglas Elliman for future success as real estate markets stabilize. We remain confident our differentiated business position will enable continued growth over the long term.”
Douglas Elliman joins Realty One Group, At World Properties, Anywhere, RE/MAX, Keller Williams, Compass, HomeServices of America and The Real Brokerage, in settling the commission lawsuits.
The National Association of Realtors has also reached a nationwide settlement of the commission lawsuits. The agreement was granted preliminary approval by a court last week.
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