SAN FRANCISCO – Leaders of the National Association of Realtors decided Monday to take more time to review and resolve the question of who owns real estate property listings and listings content.
The trade group’s board of directors, which met at the San Francisco Marriott hotel, voted to delay the effective date of a Statement of Multiple Listing Policy that addresses ownership issues related to property listings.
Some real estate lawyers and professionals have said that listings ownership issues strike at the core of legal problems relating to the association’s MLS rules.
The U.S. Justice Department has filed a lawsuit against the National Association of Realtors based on MLS rules it adopted for the online display and sharing of listings between real estate brokers. The association has since retracted those rules, and has adopted but suspended implementation of a new set of rules that are also challenged by the Justice Department.
While the association’s policy statement, adopted at a conference in May, maintains that listing brokers own property listings and listings content, questions raised about this language led association directors to delay its effective date until June 1, 2006.
“A number of procedural and administrative issues were raised and possible clarifying amendments developed” in response to the statement, according to a report to the trade group’s directors. Also, “MLS administrators and legal counsel raised additional concerns. Extending the effective date will give the committee an opportunity to assess those concerns and, if appropriate, to develop enhancements or clarifications.”
Realtor directors also approved a set of other recommendations relating to optional and mandatory MLS rules to be listed in the association’s “Handbook on Multiple Listing Policy.”
One of the optional rules approved Monday states, “Listing brokers, in response to inquiries from buyers or cooperating brokers shall, with the seller’s approval, disclose the existence of offers on the property. Where disclosure is authorized, Realtors shall also disclose whether offers were obtained by the listing licensee, another licensee in the listing firm or by a cooperating broker.”
Another optional new rule states, “Listing brokers shall not misrepresent the availability of access to show or inspect listed property.”
A mandatory rule on the submission of written offers was amended to provide that listing brokers and MLS participants representing buyers or tenants “shall submit to the buyer or tenant all offers and counteroffers, and those representing buyers “shall recommend that buyers and tenants obtain legal advice where there is a question about whether a pre-existing contract has been terminated.”
Also, directors approved an explanatory note which states, “Nothing in these MLS rules precludes a listing participant and a cooperating participant, as a matter of mutual agreement, from modifying the cooperative compensation to be paid in the event of a successful transaction.”
There was some debate among directors on changes to the association’s statement on property rights, which relate to a U.S. Supreme Court decision this year on an eminent domain issue in Connecticut.
The association’s Land Use, Property Rights and Environmental Committee recommended language that states, “The federal government should not establish criteria for the use of eminent domain by state and local governments. Each state should establish its own rules and laws governing eminent domain without interference from the federal government.”
Two directors argued that this language should be omitted, though the board voted to include the statement in its amended policy statement.
In light of the recent spate of natural disasters that wrought havoc in several Gulf Coast states, the board approved general support of a national disaster insurance and reinsurance program to help ensure that property insurance and reinsurance remains affordable and available in disaster-prone areas.
Florida Gov. Jeb Bush this month said he wants the federal government to create a national catastrophe fund, and the U.S. Congress is considering a bill proposal to create a reinsurance program for natural disasters.
Major insurance losses following the Sept. 11 terrorist attacks prompted a similar, federally backed terrorism insurance program.
Also at Monday’s board meeting, Realtor.com CEO Allan Dalton delivered a report on Homestore and the Realtor.com site it operates for the trade group.
Dalton said companies are engaged in a war for the loyalty of real estate consumers – and that war is increasingly being waged online.
“The battle to attract traffic is one that we engage in every day. We invest tens of millions of dollars every year to attract consumers to Realtor.com,” he said.
But it isn’t cheap to lure consumers to online sites. “A price war has begun. The cost of Internet traffic is growing. Search words on Google are being bid up by a factor of three to four times.”
Dalton also warned of other online companies, which he deemed “Trojan Horse-like entrants,” that he said are a threat to Realtors’ place in the real estate transaction. “To accomplish this deliberate attack, they are and will continue to deploy every possible means available, including pressure on the industry from government regulators.”
These companies will frame Realtors as “overpaid and undeserving of their commission checks,” with the goal of diminishing traffic at Realtor.com, he added.
The board of directors also accepted a report on nominations for association leadership positions for 2007. Pat Vredevoogd of Grand Rapid, Mich., will be association president in 2007; Richard Gaylord of Long Beach, Calif., will serve as president-elect; Charles McMillan of Irving, Texas, will serve as first vice president; and Bruce Wolf of Englewood, Colo., will serve as treasurer.
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