Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 72

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 1
Chunk 72
---
 Year-over-year, sales remained constant. According to
National Association of Realtors Chief Economist Lawrence Yun, “Multiple years of undersupply are driving the record high
home price. Home construction continues to lag population growth. This is holding back first-time home buyers from entering the market.
More supply is needed to increase the share of first-time homebuyers in the coming years even though some markets appear to have a temporary
oversupply at the moment.”

35

Recent Legal Challenges to Sales Agents’
Commission Structure

Recent developments in the real estate industry
have seen increased scrutiny and legal challenges related to the structure of real estate agent commissions. Legal actions and regulatory
inquiries have been initiated to examine the fairness, transparency, and potential anticompetitive practices associated with the traditional
commission model. Courts and regulatory bodies may be increasingly focused on ensuring transparency in commission structures, potentially
leading to reforms that impact the earnings and business models of real estate professionals. Changes in legislation or legal precedents
could impact the standard practices of commission-sharing between listing agents and buyer’s agents and may adversely affect
our business model and revenues. On October 31, 2023, a federal jury in Missouri found that NAR and certain companies conspired to artificially
inflate brokerage commissions, which violates federal antitrust law. The judgment was appealed on October 31, 2023, while these and other
plaintiffs have filed similar lawsuits against a number of other large real estate brokerage companies. We have not, as of the date hereof,
been named as a defendant in any antitrust litigation. On or about March 15, 2024, NAR agreed to settle these lawsuits, by agreeing to
pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions. This settlement resolves
claims against NAR and nearly every NAR member; all state, territorial and local REALTOR® associations; all association-owned MLSs;
and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below and is subject
to court approval. Due to this litigation, there will be rule changes for the NAR. In the settlement, effective mid-July 2024, NAR has
agreed to put in place a new rule prohibiting offers of compensation on the MLS, as well as adopt new rules requiring written agreements
between buyers and buyers’ agents. However, the direct and indirect effects, if any, of the judgment upon the real