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Anyone see this? Not that I am a fan of lawyers, yes I know there are some good ones out there and on this forum, what do you think of this? Hmmmmmm.....will there be reduced commissions in the future like in real estate? Any brokers care to comment?
https://loosecannon.substack.com/p/...r=2sl664&utm_source=substack&utm_medium=email
For the past four years, yacht brokers have systematically cheated thousands of people trying to sell their boats in the U.S. market, according to a new lawsuit against some of the biggest brokerages in the U.S. and the associations they support. Lawyers for the one named plaintiff are seeking certification as a class-action.
Filed Thursday in U.S. District Court in Miami, the suit names the following defendants—sometimes referred to as “co-conspirators”—most of them headquartered in Florida:
The International Yacht Brokers Association (IYBA) with more than 1,900 members.
Yacht Brokers Association of America (YBAA) with more than 250 firms with more than 1,000 brokers.
Boats Group, operator of multiple listing services Boat Trader, Yacht World and Boats.com.
Permira Advisers, owners of Boats Group.
Yatco, owner of the multiple listing service of the same name.
United Yacht Sales, which has more than 250 brokers with more than 100 in Florida.
Denison Yacht Sales.
Northrop & Johnson.
Galati Yacht Sales.
HMY Yacht Sales.
Allied Marine.
MarineMax.
Sharon & Jack Malatich LLC.
Tournament Yacht Sales.
RJC Yacht Sales.
The plaintiff is Ya Mon Expeditions, a company controlled by Pennsylvania real estate executive Davin Lamm. In January 2023, Lamm sold a 58-foot sportfish boat named Click Bait in Wanchese, North Carolina, using multiple listing services (MLS) that are participants in the alleged conspiracy.
The boat sold for $1 million, and Lamm alleges he paid a non-negotiable and “inflated” broker commission equal to 10 percent of the price.
Lamm’s pleadings were essentially inspired by recent landmark litigation in a Missouri federal court, where it was alleged that most powerful players in the U.S. real estate market had engaged in a price-fixing scheme involving multiple listing services. In October, a jury found that the National Association of Realtors and large brokerages had inflated broker commissions and awarded $1.8 billion to the class-action plaintiffs.
At the heart of the case against the yacht-sales establishment is the “Buyer-Broker Commission Rule,” which compensates a buyer’s representative broker with funds paid by the seller. According to the lawsuit, the rule has been around since at least 2020 and enforced by the IYBA and YBAA.
Here’s how Lamm’s lawyers1 described a typical yacht sale:
a. A yacht owner enters into a contract with a seller-broker, in which the seller agrees to pay the seller-broker ten percent in total commissions in exchange for marketing and facilitating the sale of the yacht;
b. As required by the Buyer-Broker Commission Rule, the seller-broker makes a non-negotiable offer of five percent commission to the buyer’s broker when it lists the yacht on the MLS;
c. A buyer-broker shows the vessel to a buyer-client who buys the vessel for $500,000 (in this example); and
d. The seller-broker receives ten percent of the sales price ($50,000) from the seller. The seller-broker then pays five percent of the sales price ($25,000) to the buyer-broker.
Based on this example, multiplied by the thousands of boat sales over the past four years, and the dollars involved could run into the tens of millions—or more.
YachtWorld
According to the lawsuit, IYBA and YBAA rules require that brokers list vessels for sale on MLS, which are the main sources for listings on websites such as YachtWorld. “The Buyer-Broker Commission Rule obligates a seller-broker, on behalf of the seller, to make a non-negotiable offer of compensation to buyer-brokers when listing a yacht on an MLS,” Lamm’s lawyers wrote.
“The Buyer-Broker Commission Rule by itself leaves the possibility of buyers seeking to reduce their broker’s commission by making that reduction a condition of a vessel purchase offer. However, both IYBA and YBAA rules identified above require yacht brokers to negotiate and enter commission arrangements before making offers on a vessel.”
If buyers paid their own brokers, Lamm’s lawyers wrote, “Sellers would agree to pay a commission solely to compensate the seller-broker because sellers have no incentive to compensate a buyer-broker negotiating against their interests, and the seller-broker commission would be about half or less of the amount that sellers have paid as a total commission to compensate both the buyer-broker and the seller-broker.”
The lawsuit is based on the Sherman Antitrust Act, which prohibits anti-competitive agreements and attempts to monopolize a particular market, as characterized by the Medieval system of guilds and 19th century Robber Barons.
Have you got a side? Obviously, the defendants have not had time to respond, but that doesn’t mean that you can’t. Lawyers, brokers or anyone who has bought or sold a boat under this system can comment below or communicate with me privately at petercswanson@gmail.com.
“Other anti-competitive measures abound,” Lamm’s lawyers said, arguing that the yacht sales industry keeps key information from the buying public by not listing previous sales prices, even though they are usually known. The information is hidden in a brokers-only section of soldboats.com. “After a vessel is sold, YachtWorld requires that broker members must input sold price information to soldboats.com in order to access the site,” the lawyers wrote.
“YachtWorld’s policies state that ‘soldboats.com data may not be published onto websites viewable by non-soldboats.com member, unless it is information that has already been published and made publicly available by YachtWorld.’ YachtWorld, however, does not make public previously sold boats, so this information too prevents competitive pricing for vessels resulting in higher commissions for brokers.”
Effects
“Effects of the conspiracy” as summarized in the lawsuit:
Defendants’ conspiracy has had at least the following chilling, anti-competitive effects, in each area in which a Covered MLS operates:
a. Yacht sellers have been forced to pay commissions to buyer-brokers—their adversaries in negotiations to sell their yachts—thereby substantially inflating the cost of selling their yacht;
b. Yacht sellers have been compelled to set a high buyer-broker commission to induce buy-brokers to show their vessels to the buyer-broker’s clients;
c. Yacht sellers have paid inflated buyer-broker commissions and inflated total commissions;
d. The retention of a buyer-broker has been severed from the setting of the broker’s commission; the yacht buyer retains the buyer-broker, while the yacht seller sets the buyer-broker’s compensation;
e. Price competition among brokers to be retained by yacht buyers has been restrained;
f. Competition among yacht buyers has been restrained by their inability to compete for the purchase of a vessel by lowering the buyer-broker commission;
g. Competition among yacht buyers has been restrained by their inability to obtain complete information regarding the previous sale price of a vessel; and
h. Brokerage defendants have increased their profits substantially by receiving inflated buyer-broker commissions and inflated total commissions.
Lamm is asking that a judge certify the case as a class-action, which would include thousands of boat buyers. He’s asking that a judge and jury declare the yacht-sales industry in violation of the Sherman Antitrust Act, force the industry to quit its anti-competitive and pay restitution, damages and costs.
https://loosecannon.substack.com/p/...r=2sl664&utm_source=substack&utm_medium=email
For the past four years, yacht brokers have systematically cheated thousands of people trying to sell their boats in the U.S. market, according to a new lawsuit against some of the biggest brokerages in the U.S. and the associations they support. Lawyers for the one named plaintiff are seeking certification as a class-action.
Filed Thursday in U.S. District Court in Miami, the suit names the following defendants—sometimes referred to as “co-conspirators”—most of them headquartered in Florida:
The International Yacht Brokers Association (IYBA) with more than 1,900 members.
Yacht Brokers Association of America (YBAA) with more than 250 firms with more than 1,000 brokers.
Boats Group, operator of multiple listing services Boat Trader, Yacht World and Boats.com.
Permira Advisers, owners of Boats Group.
Yatco, owner of the multiple listing service of the same name.
United Yacht Sales, which has more than 250 brokers with more than 100 in Florida.
Denison Yacht Sales.
Northrop & Johnson.
Galati Yacht Sales.
HMY Yacht Sales.
Allied Marine.
MarineMax.
Sharon & Jack Malatich LLC.
Tournament Yacht Sales.
RJC Yacht Sales.
The plaintiff is Ya Mon Expeditions, a company controlled by Pennsylvania real estate executive Davin Lamm. In January 2023, Lamm sold a 58-foot sportfish boat named Click Bait in Wanchese, North Carolina, using multiple listing services (MLS) that are participants in the alleged conspiracy.
The boat sold for $1 million, and Lamm alleges he paid a non-negotiable and “inflated” broker commission equal to 10 percent of the price.
Lamm’s pleadings were essentially inspired by recent landmark litigation in a Missouri federal court, where it was alleged that most powerful players in the U.S. real estate market had engaged in a price-fixing scheme involving multiple listing services. In October, a jury found that the National Association of Realtors and large brokerages had inflated broker commissions and awarded $1.8 billion to the class-action plaintiffs.
At the heart of the case against the yacht-sales establishment is the “Buyer-Broker Commission Rule,” which compensates a buyer’s representative broker with funds paid by the seller. According to the lawsuit, the rule has been around since at least 2020 and enforced by the IYBA and YBAA.
Here’s how Lamm’s lawyers1 described a typical yacht sale:
a. A yacht owner enters into a contract with a seller-broker, in which the seller agrees to pay the seller-broker ten percent in total commissions in exchange for marketing and facilitating the sale of the yacht;
b. As required by the Buyer-Broker Commission Rule, the seller-broker makes a non-negotiable offer of five percent commission to the buyer’s broker when it lists the yacht on the MLS;
c. A buyer-broker shows the vessel to a buyer-client who buys the vessel for $500,000 (in this example); and
d. The seller-broker receives ten percent of the sales price ($50,000) from the seller. The seller-broker then pays five percent of the sales price ($25,000) to the buyer-broker.
Based on this example, multiplied by the thousands of boat sales over the past four years, and the dollars involved could run into the tens of millions—or more.
YachtWorld
According to the lawsuit, IYBA and YBAA rules require that brokers list vessels for sale on MLS, which are the main sources for listings on websites such as YachtWorld. “The Buyer-Broker Commission Rule obligates a seller-broker, on behalf of the seller, to make a non-negotiable offer of compensation to buyer-brokers when listing a yacht on an MLS,” Lamm’s lawyers wrote.
“The Buyer-Broker Commission Rule by itself leaves the possibility of buyers seeking to reduce their broker’s commission by making that reduction a condition of a vessel purchase offer. However, both IYBA and YBAA rules identified above require yacht brokers to negotiate and enter commission arrangements before making offers on a vessel.”
If buyers paid their own brokers, Lamm’s lawyers wrote, “Sellers would agree to pay a commission solely to compensate the seller-broker because sellers have no incentive to compensate a buyer-broker negotiating against their interests, and the seller-broker commission would be about half or less of the amount that sellers have paid as a total commission to compensate both the buyer-broker and the seller-broker.”
The lawsuit is based on the Sherman Antitrust Act, which prohibits anti-competitive agreements and attempts to monopolize a particular market, as characterized by the Medieval system of guilds and 19th century Robber Barons.
Have you got a side? Obviously, the defendants have not had time to respond, but that doesn’t mean that you can’t. Lawyers, brokers or anyone who has bought or sold a boat under this system can comment below or communicate with me privately at petercswanson@gmail.com.
“Other anti-competitive measures abound,” Lamm’s lawyers said, arguing that the yacht sales industry keeps key information from the buying public by not listing previous sales prices, even though they are usually known. The information is hidden in a brokers-only section of soldboats.com. “After a vessel is sold, YachtWorld requires that broker members must input sold price information to soldboats.com in order to access the site,” the lawyers wrote.
“YachtWorld’s policies state that ‘soldboats.com data may not be published onto websites viewable by non-soldboats.com member
Effects
“Effects of the conspiracy” as summarized in the lawsuit:
Defendants’ conspiracy has had at least the following chilling, anti-competitive effects, in each area in which a Covered MLS operates:
a. Yacht sellers have been forced to pay commissions to buyer-brokers—their adversaries in negotiations to sell their yachts—thereby substantially inflating the cost of selling their yacht;
b. Yacht sellers have been compelled to set a high buyer-broker commission to induce buy-brokers to show their vessels to the buyer-broker’s clients;
c. Yacht sellers have paid inflated buyer-broker commissions and inflated total commissions;
d. The retention of a buyer-broker has been severed from the setting of the broker’s commission; the yacht buyer retains the buyer-broker, while the yacht seller sets the buyer-broker’s compensation;
e. Price competition among brokers to be retained by yacht buyers has been restrained;
f. Competition among yacht buyers has been restrained by their inability to compete for the purchase of a vessel by lowering the buyer-broker commission;
g. Competition among yacht buyers has been restrained by their inability to obtain complete information regarding the previous sale price of a vessel; and
h. Brokerage defendants have increased their profits substantially by receiving inflated buyer-broker commissions and inflated total commissions.
Lamm is asking that a judge certify the case as a class-action, which would include thousands of boat buyers. He’s asking that a judge and jury declare the yacht-sales industry in violation of the Sherman Antitrust Act, force the industry to quit its anti-competitive and pay restitution, damages and costs.
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