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Supreme Court Encourages Non-Licensed Competition for Realtors

Updated on April 3, 2015

Supreme Court Ruling Could Grant Non-Realtors Right to Help Sell Property

A recent Supreme Court ruling that allows non-dentists to provide limited dental treatments threatens to cut into the exclusive right of real estate agents to charge their clients money in the purchase or sale of property.

The court said trade commissions can enforce exclusive license rights only if they are supervised by state governments.

A real estate commission, for example, can exclude non-real estate agents from selling property only if the state government closely monitors the commission’s actions.

The decision is nearly certain to create more competition for realtors from firms that seek to provide discounts for buyers and sellers for some services, according to legal experts. The services could include locating properties for clients and filling out forms for a transaction.

The court ruling resulted from a lawsuit filed by the Federal Trade Commission against the North Carolina State Board of Dental Examiners. The case started in North Carolina but applies to trade commissions nationwide because it is based on federal antitrust law.

In 2006, the North Carolina State Board of Dental Examiners banned businesses from offering teeth-whitening services. Only dentists could provide the service, the state board said.

The Federal Trade Commission argued in its lawsuit the ban was unfair competition that violated the 1914 Federal Trade Commission Act.

The Supreme Court said trade commissions could enforce licensing restrictions but only if they were closely supervised to ensure they complied with a state policy. The policies typically are designed to protect public health, safety and the finances of consumers.

In the case of the Board of Dental Examiners, there was no state supervision, only a law authorizing the board to protect the licenses of dentists. Similar criticisms have been lodged against real estate commissions when they prohibit non-real estate agents from advising property buyers and sellers.

The Supreme Court said the state supervision must ensure the trade commissions are acting first to protect the public rather than the business interests of their licensees.

The case is North Carolina State Bd. of Dental Examiners v. F.T.C., 135 S. Ct. 1101 (U.S. 2015).

U.S. Supreme Court supports non-licensed businesses in performing services previously performed only by professionals.
U.S. Supreme Court supports non-licensed businesses in performing services previously performed only by professionals.

How many licenses are too much?

Should unlicensed businesses be allowed to perform limited functions normally reserved to professionals if there is a minimal threat to public safety?

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      Tom Ramstack 3 years ago

      I think your comments are essentially the same as the reasoning of the Supreme Court. There's a balance between protecting the consumer through licensing of professionals and protecting them from inflated costs. Sometimes it's hard for trade associations to strike that perfect balance.

    • MarleneB profile image

      Marlene Bertrand 3 years ago from USA

      I actually feel like some of these trade organizations are only in it for the enhancement of the organization. I wonder, sometimes, where the organization is really helping the consumer. I understand how critical it is to be knowledgeable about consumer services, but sometimes trade organizations interfere with the ability of the consumer to receive the best service available. In some cases, the fees to join are exorbitant, leaving some of the best talent impeded by the cost. I could go on and on. Your article is quite informative. I enjoyed reading it.