Realtors question Web site name restrictions

A new section in the National Association of Realtors Code of Ethics and Standards of Practice that relates to Web site names has rankled some members who say the language is overreaching.

Approved in November and enacted last month, Standard of Practice 12-10 states that Realtors shall not "use URLs or domain names that present less than a true picture, or register URLs or domain names which, if used, would present less than a true picture" in their advertising, marketing and other representations.

Some Realtor members have asked for more clarification or even a rewriting of the new language, and say they worry that a strict interpretation of the standard may force them to shut down their sites that incorporate the term "MLS," for example.

A case example provided by the national Realtors group suggests that the new section can be interpreted to prevent members from using the term "MLS" in their Web site address if that address implies that the member site is an actual multiple listing service rather than an MLS participant.

In that supporting example, a Realtor who operates a site called "northwoodsandlakesmls.com" receives a complaint from another Realtor who learned that the site was not an actual MLS-operated site.

While the Realtor who operated the site noted that he was "authorized under the MLS's rules to display other participants' listings on his Web site," the hearing panel found: "the fact remained that a real estate-related URL that included the letters MLS would lead reasonable consumers to conclude that the Web site would be an MLS's, and not a broker's Web site," according to this example.

The Code of Ethics and Standards of Practice, which are mandatory for all Realtor members, are enforced by local Realtor groups, and the interpretation of the policy could be varied based on decisions in local hearings of ethics complaints.

While some multiple listing services have passed policies that specifically restrict subscribers' use of the "MLS" term in Web site addresses and even company names, the new section in the Code of Ethics and Standards of Practice could potentially have the same impact in restricting Web site names if there are ethics complaints and subsequent rulings against those Realtor members who operate the sites.

Gary Ashton, a Realtor and team leader at RE/MAX Elite in Nashville, said that he has transferred ownership of his Web site NashvillesMLS.com, and the site now carries disclaimers stating that the site "is not the official Web site of the Middle Tennessee Regional Multiple Listing Service" and "NashvillesMLS.com is an independently owned Web site."

Ashton said he is concerned that the new section enacted by NAR in January may actually put Realtors at a disadvantage to competitors who are not Realtors and do not face restrictions on use of the terms "MLS" and "multiple listings service."

While the National Association of Realtors does own the Realtor trademark, it does not hold any such rights to "MLS."

Ashton said he has invested money into building and marketing the NashvillesMLS.com site and is worried that sites such as his could be forced to shut down.

"It kind of takes away any marketing abilities for people, out of the Realtors' hands, and puts them in third-party independent companies' hands. Somebody like me, who has been doing this for three years -- and all of the sudden they change the goalposts. It's just very odd. I don't think they really thought through the full implications of trying to stop people from using 'MLS.' "

Marc Rasmussen, a Realtor at SKY Sotheby's' International Realty in Sarasota, Fla., said he is defending his use of TheSarasotaMLS.com, a site he launched in late 2003 that is the major source of his online traffic.

The new section in the NAR Code of Ethics and Standards of Practice, he said, appears to be too late.

"The cat's out of the bag, to a certain extent. I think it's going to be difficult for them to police. They don't own the term MLS, and they're using this as a way for them to govern it and police (members) using this in their domain name. I personally think it's ridiculous," he said.

Consumers, he said, seem to understand that not all of the sites that contain the term "MLS" are operated by a multiple listing service.

"I've never had anyone complain, thinking they are looking at the true MLS. I've never had anyone say they thought they felt duped. If anything, I get a lot of comments from people saying they appreciate my Web site," Rasmussen said.

While the new section will be interpreted on a local basis, some Realtors have said they would like to see the language revisited at the national level.

Ryan Ward, for example, a Realtor for Keller Williams Realty Consultants in Roswell, Ga., has launched an online petition, which states, "We feel that it is imperative that the NAR clarify this position and allow all Realtors to use the term MLS on our websites as it is a true picture because the information displayed is in fact data delivered from the MLS."

The consequences of restrictions on use of the MLS term in Web site addresses, according to the petition Web site, are that Realtor members "will lose the ability to market directly to buyers using a term that they are already familiar with," and will be "unable to compete on a level playing field with non-member agents and brokers as well as third-party Websites. They will have free reign to market or this term because consumers use it.

"This fact alone should serve as reason enough to protect and preserve the use of 'MLS' by NAR members across the country," according to Ward's FreeTheMLS.com Web site.

Laurie Janik, general counsel for the National Association of Realtors, said that the language added to the Code of Ethics and Standards of Practice relating to members' Web site addresses "is geared at avoiding misleading the public. It's not an outright prohibition" on using the term "MLS," she said.

"Article 12 has always required Realtors to provide a true picture to the public, and that's the underpinning for this," Janik also said.

While a Realtor member using "ChicagoMLS.com" as a Web site address may be considered to be misleading and not permissible, a member would likely be allowed to operate a site name such as "IParticipateinMLS.com, MyFirmBelongsToMLS.com, or MLSParticipant.com, she said, as "there is nothing misleading about that."

She also noted that the facts of each case are to be determined separately if there is an ethics complaint on the Web site naming issue. Penalties in ethics hearings could range from a letter of warning to termination or suspension from the association, she said.

The new language in the Code of Ethics and Standards of Practice does not grandfather in existing uses of Web site names, she said: "If it's misleading, it's misleading. (The language applies) to brokers' conduct today."

A Nashville-area Realtor said there should be greater enforcement of the standard relating to the presentation of a true picture in Realtor Web addresses because those Realtors that use MLS terms in their Web addresses may have an unfair competitive advantage over other Realtors.

The Realtor, who asked to remain anonymous because of worries about retaliation, said, "This is NAR's rule, not mine. I think it is crystal clear. There could be a groundswell going back to NAR saying, 'We'd like to have this rule change.' "

But until that happens, the Realtor said that the new language should be enforced. That Realtor has reportedly submitted several ethics grievances in several states that allege violations of the "true picture" standard for Web addresses by several Realtor members.

The anonymous Realtor said there is a concern that "non-real estate companies are going to be competing against us. NAR did not address this. The bottom line is to have Realtors adhere to our code of ethics."

Don Klein, executive officer for the Greater Nashville Association of Realtors, said the association has distributed information about the new standard to its members, though it's too new to gauge its impact. "The challenge right now is simply to make sure that everyone knows there is that policy that NAR passed," he said, adding that he expects the new standard to be emphasized in ethics courses for members.

Tony Pomykala, a Realtor for Sunrise Investments in Chandler, Ariz., who maintains the http://www.ArizonaRealEstate-MLS.com Web site, said he plans to transfer that site to a non-Realtor to avoid any conflict with the new ethics language, though he doesn't agree with any restrictions in members' use of MLS in Web site addresses.

"My viewpoint is NAR is the only trade association that forbids its members from going where the customers are. If you Google 'MLS,' there are literally hundreds of thousands of domains with MLS in them," he said.

Kimberly McKinley, a broker at Aspen Sotheby's International Realty in Colorado who operates the AspenMLSSearch.com site, said she doesn't believe that consumers are somehow deceived by Realtor member sites that use the "MLS" term.

"I've not had anybody say, 'Oh my gosh, I thought I was on the MLS,' " she said. "I think (NAR) might be getting to be a little overprotective of the public and they're hurting us -- they're hurting the Realtors and brokers. NAR is supposed to be there to promote us."

She added, "In my opinion it's a mistake -- the NAR rule was created and I think it needs to be repealed."

While the Code of Ethics and Standards of Practice applies to all Realtors, NAR's board of directors in November also approved an optional policy that Realtor-operated MLSs can choose to adopt that restricts subscribers' use of "MLS" and related terms.

That optional policy allows MLSs to block the use of "MLS" and "Multiple Listing Service" in subscribers' Web site addresses, company names, e-mail addresses and other marketing materials.

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