A policy enacted by the Multiple Listing Service of Northern Illinois this year restricts members’ use of “MLS” and related terms in their company names and marketing materials but is less extensive than an earlier version that met resistance.
The policy approved by Realtor association-owned MLSNI, which has about 50,000 members in the Greater Chicago area, exempts those companies that were using the MLS term in their Web sites prior to the adoption of the policy on March 14, 2007. The policy went into effect six months later, in September.
Some other MLSs have approved policies designed to limit members’ use of “MLS” terms, and a rule change by an MLS in Minnesota led to an antitrust lawsuit. Last month, National Association of Realtors officials approved a voluntary policy that MLSs can choose to adopt in restricting members’ use of “MLS” and related terms.
The national group and local MLSs have said that such policies can help to clear up consumer confusion over online property searches that claim to allow MLS searches, though critics of the policies point out that the rules apply only to members of MLSs that adopt them — individuals and companies not participating in the MLS can continue to use the MLS terms, as Realtor groups do not own rights to the term “MLS.”
Richard Torp, manager of network services for MLSNI, said that MLSNI had originally sought to limit participants’ use of the term MLS in Web site addresses, though a member’s complaint led to a change in the policy. That participant, he said, used “MLS” in its URL, but the use of the term did not imply that the participant was actually MLSNI, he said.
“We changed that part of the rule. We felt he had a legitimate concern and we changed our rule. It never got to court,” Torp said. “Our lawyers felt that the term MLS was so generic out there in the URLs.”
As it stands, the policy provides that no participant or subscriber of MLSNI shall infer “in any medium that the participant or subscriber is or operates a multiple listing service. Participants and subscribers shall not use the term ‘multiple listings service,’ the acronym, ‘MLS,’ or any derivatives in company/firm names.”
Also, the policy provides that subscribers cannot indicate that they are an MLS or that “the public has access to or may search” the MLS. And use of “MLS” and related terms are acceptable in domain names, Web addresses and URLs “as long as the name does not imply and/or infer that the Web site is associated with, or operated by (MLSNI).”
Those participants with a company name that includes “MLS” or related terms that registered with the Illinois Secretary of State and were members of MLSNI prior to the rule’s adoption can keep that name as long as the participants comply with other aspects of the MLSNI policy.
Violations are punishable by fines ranging from $500 for the first offense to $2,500 for the third offense, and can lead to termination of MLS access privileges if the participant fails to comply.
Torp said that while the rule prevents MLSNI participants from making statements at their Web sites such as “search the MLS,” as the public does not literally have access to the MLS, it is OK for participants to make statements such as “search by MLS number,” “search properties for sale,” and “search properties listed by participants of the MLS.”
“For the most part everyone we’ve dealt with who has had an issue using the terminology has changed it immediately,” Torp said.
He said the policy makes it clear that the public is not directly accessing the MLS while “making sure we don’t take away an advantage from our membership” in their ability to use MLS terms in permitted ways.
The MLS policy guidelines approved by the National Association Board of Directors during an annual conference in Las Vegas last month are stricter than those adopted by MLSNI. The NAR guidelines, which are not mandatory for Realtor-affiliated MLSs, provide that MLSs can choose to restrict participants’ use of “MLS” and “Multiple Listing Service” in Web site addresses, company names, e-mail addresses and in other marketing materials.
Scott Berg, managing broker-owner for Berg Properties, a company that offers flat-fee real estate services in Northern Illinois, said he had a concern about the policy’s impact on the company’s ability to optimize its ranking in search-engine results, and the company owns the MLSTown.com URL that it would have abandoned if MLSNI had targeted any use of “MLS” in Web site addresses.
While Berg said that there definitely is consumer confusion about the meaning of MLS and the ability to search for properties listed in the MLS versus unrestricted access to the MLS, he said he doesn’t believe the new policy will completely address that confusion.
“I don’t know that this is going to do anything to alleviate the confusion. It is just … another little thing to have to deal with,” he said.
For example, Berg said that on occasion a client will contact the company stating that they could not see their property listed on the MLS, when in fact the client was searching for the property on a brokerage company’s Web site that did not include all of the properties listed in the MLS, he said. “They think they have access to it — obviously they don’t.”
A problem with the National Association of Realtors offering guidance in restricting use of the MLS term is that “who they have real jurisdiction over are just Realtors,” Berg said, and non-Realtors “can just go ahead and (use) it however they want.”
Matt Hernacki, broker-associate for RE/MAX Unlimited Northwest in Northern Illinois, said that he received a notice from MLSNI stating that he had violated the new policy for using terminology inferring that Web site users could search the MLS, and he changed the Web site to comply.
“It just seemed kind of out of the blue — what’s the big deal?” he said of the new policy. “It doesn’t make it any more clear to the public, I don’t think.” The fines also seemed fairly substantial compared to other MLS violations, Hernacki said.
In Minnesota, the Minneapolis-area Regional MLS faced a lawsuit over its restrictions on the use of “MLS” and related terms in company names and Web site addresses, and that lawsuit was settled earlier this year. The settlement agreement extended the time period in which member companies of the MLS can redirect noncompliant Web addresses to a compliant site address, among other provisions.
Northwest MLS in Washington had adopted a rule in April 2005 that contained almost identical language to RMLS’ original rule.