When the National Association of Realtors rolled out its new online policy earlier this month for the display of property listings, the trade group also announced a change to MLS policy that prohibits licensed real estate brokers from joining a multiple listing service if they don’t list or sell properties.
The change in MLS participant requirements, effective Aug. 31, requires individual brokers and real estate firms to “offer or accept cooperation and compensation to and from other participants.” The change comes at a time when Realtor groups are under fire from federal officials for possible anticompetitive activities.
Former language in the Realtor association’s MLS rules provided that individuals and firms must be “capable of offering and accepting cooperation and compensation to and from other participants,” while the new policy mandates this cooperation and compensation. Real estate appraisers are exempt under the new and former MLS participant requirements.
According to association officials, the new policy is intended to weed out brokers and companies that have “no intent to list properties in the MLS or to sell the properties listed in the MLS.” The change raises some antitrust questions, said David Barry, a San Francisco lawyer who has engaged in antitrust legal battles with Realtor groups for more than 25 years.
Barry said the new MLS participant policy appears to be “aimed at information intermediaries who want to gain access to the MLS.” In legalese, Barry said he believes the new policy may fit the definition of a “group boycott,” a type of antitrust violation in which individuals band together to exclude others.
NAR officials anticipate the change would impact very few MLS participants.
Laurie Janik, general counsel for the Realtor group, said in a statement that the association does not keep statistics on how many MLS participants are affected by the MLS policy change. “We have no statistics. I would imagine extremely few participants would no longer qualify under the revised definition.”
Appraisers are allowed to participate in the MLS, Janik stated, because they “require access to current listing information to perform accurate appraisals.” Janik also stated that she is not aware of any MLSs that are already enforcing the new policy, which was adopted by the group’s leadership team.
Association officials stated that the change in policy “was to make sure the definition of a participant is consistent with the purpose of MLS and the permitted uses of MLS content. MLS is a vehicle whereby listing brokers make offers of cooperation and compensation to cooperating brokers to procure a buyer for the listing.”
The U.S. Department of Justice, which is suing the National Association of Realtors over the group’s online property listings policy, announced the lawsuit on Sept. 8, just after the Realtors group revealed its new Internet property listings rule. The lawsuit makes no mention of the change in the trade group’s MLS participant policy.
Also this year, federal antitrust officials have investigated states’ real estate rebate practices and issued letters opposing state real estate laws that established mandatory service requirements for real estate agents and brokers while blocking some types of real estate business models. The Federal Trade Commission and the Department of Justice’s Antitrust Division are hosting a workshop next month, “Competition Policy and the Real Estate Industry,” that will include a discussion of new brokerage models, MLSs, and the implications of states’ minimum-service requirements.
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