The co-founder of a company that offers flat-fee services to list properties in multiple listing services complained to the U.S.

The co-founder of a company that offers flat-fee services to list properties in multiple listing services complained to the U.S. Federal Trade Commission after receiving notice that the company was denied membership in a multiple listing service operated by the Oklahoma City Metro Association of Realtors.

And the association, which on March 28 issued a notice denying the application, today said that the application is still under consideration by the MLS board.

“Basically we made a mistake,” said Jennifer Johnson, director of marketing and professional standards for the association. “(The) application was postponed, not denied.” She said the mistake was due to a staff error.

The March 28 notice stated, “Your application for MLS participation has been denied by the MLS Board of Directors. Your application does not comply with the participatory requirements.”

Housepad.com officials, in a public statement, raised questions about whether the company’s provisions of flat-fee services was a cause for the trouble with the MLS application, as some states and MLSs have passed measures that place restrictions on so-called limited-service business models that offer fewer services than traditional full-service real estate companies. Federal agencies, including the FTC and Justice Department, have opposed such measures as being potentially anti-competitive and anti-consumer.

Ryan Gehris, who operates Housepad.com through a partnership with his father, Ken, said an MLS official had stated to him in a March 27 e-mail message that all of the company’s licensees must have real estate licenses in Oklahoma and must also participate in the MLS in order to join the MLS. But Gehris said that doesn’t make sense for his company, which has about 10 agents and operates in 16 states and Washington, D.C., because most of the agents will not be working in Oklahoma.

Gehris said he received an e-mail from Shanna Dixon, director of member services for the Oklahoma City Metropolitan Association of Realtors, on March 27 stating that a principal who participates in the association’s MLS “must include all licensees affiliated with him/her as the participant. In order to comply with participatory obligations all licensees with the partnerships must have Oklahoma real estate licenses and must all participate (in the MLS).”

“We only wanted one membership (in the MLS) because there is only one of us who needs to do the work,” Gehris said. He notified the FTC, an antitrust enforcement agency, about the initial denial of the application to participate in the MLS. He said the company also considered filing a complaint with the Oklahoma Real Estate Commission, the state’s real estate regulator. The company already operates in other parts of Oklahoma and did not have any complications in joining another MLS in the state.

The association said in its statement today, “The Mr. Ryan Gehris Application for Membership to Oklahoma City MLS was postponed (not denied) by the MLS Board of Directors at their monthly board meeting held on March 22, 2007, pending further investigation of the application.

“The denial letter that Mr. Gehris received dated March 28, 2007, was a miscommunication between the board and staff. We sincerely apologize for any confusion or frustration that this may have caused Mr. Gehris.”

Gehris said that his father had initially applied for membership in the Oklahoma City Realtor group’s Gateway MLS and informed him that all of the licensees associated with the office would have to join the MLS, and Gehris then attempted to apply for membership under his name through a California office where he is listed as the only licensee.

Housepad.com also operates the ValueMLS.com Web site and has a traditional, full-service real estate offering in Pennsylvania. The company offers flat-fee MLS-listing services in California, Colorado, Delaware, Florida, Georgia, Louisiana, Massachusetts, Maryland, Oklahoma, New Jersey, New York, Pennsylvania, Texas, Washington, D.C., and West Virginia.

Housepad.com had issued a public announcement March 31 to call attention to the MLS membership issue. “I am not sure whether the MLS’s motives are merely monetary, or if they are intending to prevent discount brokers such as ourselves from gaining access,” Gehris said in the announcement. “In any event we feel they are committing multiple violations harmful to the public with their position.”

Anne Woody, executive director for the Oklahoma Real Estate Commission, said there is no law or rule in the state that would require all out-of-state real estate licensees affiliated with real estate companies that have operations in the state to obtain Oklahoma real estate licenses.

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