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Changes to MLS Policy Statements 7.42 and 7.43 - "MLS of Choice"

View August 2018 Change to Waiver Administration.

During the 2017 REALTORS® Conference and Expo, NAR’s Board of Directors voted to adopt changes in MLS Policy giving licensees more flexibility in where they subscribe to MLS (aka “MLS of Choice”). That change went in effect July 1, 2018. Based on broker experience, the NAR Leadership Team recognized a need for additional revisions specific to local waiver forms and the process used to approve them. Additional changes to MLS Policy Statement 7.43 were approved by the Leadership Team in August 2018. 

What follows is the revised policy language, background, resources for implementation, and other information.

Background on the Changes

Guiding Principle: To empower REALTOR® MLSs, brokers, and agents with a modern service structure that recognizes evolving business needs in the real estate industry, provides flexibility in light of emerging technology and workplace trends, and encourages value-driven competition among MLSs.

Prior to the Changes: Policy utilized REALTOR® association jurisdictional boundaries as a basis for assessment of MLS fees. MLSs had discretionary authority to assess MLS fees based on all offices of a participating firm located within the territorial jurisdiction of the association (or associations) that own and operate the MLS. This policy was adopted in 2002 after several MLSs expressed concern that a rule prohibiting such assessment was overly-broad and unnecessarily restrictive of their ability to require, as a matter of local determination, participation by all branch offices within their jurisdiction.

Affect Local Adoption: Brokers and agents are empowered with a nimble MLS service structure that allows for innovation and competition amongst MLSs. This approach gives agents a choice in subscribing to any MLS in which their broker is a participant, and it requires MLSs to only assess Brokers a fee based on their affiliated licensees who choose to subscribe to the MLS. MLSs have the discretion to assess fees to agents affiliated with a participating office, if those agents have not subscribed to another REALTOR® MLS. This results in a value-driven service structure that encourages competition amongst MLSs, responds to the evolving business needs and varied structures of brokerage firms, and, therefore, is in the best interest of brokers , their affiliated agents, and the MLS.

Licensees can subscribe to an MLS only if their broker is a participant.

Policy Changes

MLS Policy Statements 7.42 and 7.43 were changed by NAR’s Board of Directors in November of 2017, and became effective July 1, 2018. Those revisions appear below. In August 2018, the NAR Leadership Team further adjusted MLS Policy Statement 7.43 to address broker concerns over MLS waiver forms and the process used to approve them.

August 2018 Amendments to MLS Policy Statement 7.43 – NAR Leadership Team

Rationale: In situations where only a few agents of the principal broker want access to MLS, all remaining agents of the firm, which can number in the hundreds and sometimes thousands, were being required to complete individual waiver forms. This administrative burden works against the spirit and intent of the original MLS policy changes designed to create flexibility. To resolve the matter, the NAR Leadership Team took immediate action to adopt changes discussed and developed by the MLS Technology and Emerging Issues Advisory Board at its August 2018 meeting. Those changes are effective now and only allows MLSs to require a waiver form signed by the principal broker on behalf of his or her affiliated licensees.

Section 1 Waivers of MLS Fees, Dues, and Charges (Policy Statement 7.43)

Recurring MLS fees, dues, and charges may be based upon the total number of real estate brokers, sales licensees, and licensed or certified real estate appraisers affiliated with or employed by an MLS participant. (Amended 11/17)

However, MLSs must provide participants the option of a no-cost waiver of MLS fees, dues and charges for any licensee or licensed or certified appraiser who can demonstrate subscription to a different MLS where the principal broker participates. MLSs may, at their discretion, require waiver recipients and their that broker participants to sign a certification for nonuse of its MLS services by their licensees, which can include penalties and termination of the waiver if violated. (Amended 8/18)

Download sample waiver form (DOC: 17.66 KB)

Motion Adopted by the Board of Directors:

Effective July 1, 2018, that MLSs be prohibited from requiring participation by all offices of a real estate firm within the shareholder association(s) jurisdiction and that MLSs be required to provide a no-cost waiver option of MLS fees, dues and charges for licensees affiliated with an MLS Participant who can demonstrate their subscription to another MLS. Further, that references to MLS “jurisdiction” or “territory” be changed to “service area” to reflect the true nature of the location, and help eliminate confusion over the jurisdiction of shareholder association(s).

Section 6: Jurisdiction of Association Multiple Listing Services (Policy Statement 7.42)

The jurisdiction service area of multiple listing services owned and operated by associations of REALTORS® is not limited to the jurisdiction of the parent association(s) of REALTORS®. Rather, associations are encouraged to establish multiple listing services that encompass natural market areas and to periodically reexamine such boundaries to ensure that they encompass the relevant market area. While associations are encouraged to work cooperatively to establish market area multiple listing services, the absence of such an agreement shall not preclude any association from establishing and maintaining a multiple listing service whose territory service area exceeds that of the parent association(s) jurisdiction. Where the territory of an MLS exceeds that of the parent association(s), the authority of the MLS to require offices of a participant or a participant’s firm to participate in the MLS is limited to offices located within the jurisdiction of the association(s) of REALTORS® that own and operate the MLS or that are parties to a multi-association or regional MLS service agreement. MLSs may not, as a matter of local determination, require that each other offices of a firm’s offices located within the jurisdiction of the association(s) that own and operate the MLS or that are parties to a multi-association or regional MLS service agreement to participate in the MLS if any office of that firm participates in that MLS. (Revised 5/02) M

Section 1 Waivers of MLS Fees, Dues, and Charges (Policy Statement 7.43)

Recurring MLS fees, dues, and charges may be based upon the total number of real estate brokers, sales licensees, and licensed or certified real estate appraisers affiliated with or employed by an MLS participant when related to the operation of a computerized MLS system that provides information and services in addition to the compilation of current listing information.

However, an MLS participant may not be assessed any charges or subscription fees for printed MLS sheets/cards/books with respect to any individual who is engaged solely and exclusively in a specialty of the real estate business separate and apart from listing, selling, leasing, or appraising the type of properties which are required to be filed with the MLS.

However, MLSs must provide participants the option of a no-cost waiver of MLS fees, dues and charges for any licensee or licensed or certified appraiser who can demonstrate subscription to a different MLS where the principal broker participates. MLSs may, at their discretion, require waiver recipients and their participants to sign a certification for nonuse of its MLS services, which can include penalties and termination of the waiver if violated.

(Note: accompanying revisions will be made to the NAR Model MLS Rules and Regulations.)

Resources

FAQ:

View the FAQ about the proposed revisions.

For Local MLSs:

Also See:

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