Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 139

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 2
Chunk 139
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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 estate industry
are not yet entirely clear.

There could also be further changes in real estate
industry practices. All of this has prompted discussion of changes to rules established by local or state real estate boards or multiple
listing services. All of this may require changes to many brokers’ business models, including changes in agent and broker compensation.
For example, we will likely have to develop mechanisms and a plan that enable buyers and sellers to negotiate commissions. The Company
will continue to monitor ongoing and similar antitrust litigation against our competitors. However, the litigation and its ramifications
could cause unforeseen turmoil in our industry, the impacts of which could have a negative effect on us