On the Pulte Objection

The prospect of builders opting-out

As much as I’d like to move on to writing about and thinking about topics other than the big commission lawsuit… events keep dragging me back in.

The latest is news that Pulte Homes, the nation’s third largest homebuilder, has filed an objection to the Anywhere, RE/MAX and KW settlements in Sitzer/Burnett with the court.

While I do not think the objection would (or should) torpedo the settlement agreement, there is the prospect of independent action. It’s worth thinking about. So here we go.

The Objection

Let’s start, as we always do, with any actual documentation if it is available.

RealEstateNews.com reported the story here:

Traditional home sellers aren't the only ones interested in getting a piece of the commissions settlement pie. Homebuilders are also looking to tap into the settlement award — but one of the country's largest builders isn't happy about the process.

In court documents filed April 12 in the Sitzer/Burnett case, Atlanta-based homebuilder PulteGroup, Inc. objected to the settlement proposals for Anywhere, RE/MAX and Keller Williams, citing the onerous paperwork involved for those who paid commissions for more than one home sale and the lack of clarity about the award amount.

The actual court filing can be found here. It’s relatively short and frankly not that interesting.

Essentially, Pulte is making three points:

1. We have no idea how much we could recover.

2. Filing for claims under the scheme in the settlement is onerous for volume sellers with many many claims.

3. We never got proper notice.

I have no particular expertise or knowledge here, but it does seem to me that #2 and #3 result in more of a slap on the wrist, some kind of order by the court for the plaintiff lawyers and the settling parties to do a better job of administration.

The first objection, however, is a bit of a bigger deal.