Multiple listing services are asking the National Association of Realtors to stand behind them if they choose to require that brokers submit photos or property disclosure forms with their for-sale listings.
Many MLSs have had such rules in place for years, particularly for photos. But NAR staff members say the trade group’s existing MLS policy does not expressly grant MLSs such authority.
The Council of MLSs, a group representing MLSs, Realtor associations and MLS vendors, maintains that there is nothing in the MLS policy that prohibits them from imposing such requirements either.
The group has asked NAR’s Multiple Listing Policy Committee to issue a policy statement clarifying that individual MLSs have the right to require listing brokers to submit one or more photos and seller disclosures with listings.
The issue is on the committee’s agenda at NAR’s Midyear Legislative Meetings and Trade Expo, which takes place next week in Washington, D.C. If the committee agrees that clarification is needed, it could vote to present a statement of policy, which would be presented to NAR’s board of directors for consideration.
The Council of MLSs made its request after NAR staff members, performing routine reviews of local MLS rules and regulations, informed some MLSs that had instituted mandatory photo or property disclosure rules that NAR prohibits such requirements.
Melanie Blakeney, the president of the Council of MLSs and an executive vice president of the Memphis Area Association of Realtors, said she was not aware of any challenges by brokerages of such policies.
But in an April 6 letter to Multiple Listing Policy Committee Chair Mike Jewell, the Council of MLSs warned that "NAR’s interpretation of its policy, if applied across all MLSs, would upset a business best practice among leading MLSs upon which many brokers have come to rely."
Over the last decade, the letter noted, "a great number of MLSs have consistently required submission of listing photos on all listings," sometimes allowing exceptions for vacant land and properties under construction.
In addition, state and local laws may also require listing brokers and sellers to make disclosures relating to properties available to prospective buyers, often before a showing, the Council of MLSs argued.
The council maintains that MLSs can require a listing broker to submit any nonconfidential information relating to the property that is reasonably available to the listing broker — including any documentation that, by law, must be provided by the seller or listing broker to prospective buyers at or before the time of showing.
NAR staff, however, have ruled that photos and property disclosures fall outside the scope of information that MLSs can require members to submit with their listings.
Under NAR’s model MLS rules, MLSs cannot require listing brokers to submit any information beyond what’s requested on the property data forms that are used to enter listings into the MLS, said Cliff Niersbach, NAR’s vice president of board policy and programs.
The forms typically include information such as the list date, list price, total commission offered, and numerous details about the property including address, property type, number of rooms and square footage.
"There’s no question that many participants take advantage of the ability to share this information," Niersbach said of the fact that MLSs collect and disseminate additional information, such as photos and disclosure forms.
"That isn’t the issue. The question is whether there should be express authority in MLS policy enabling MLSs to impose such a requirement on participants." …CONTINUED
Jewell, who is a regional vice president for Coldwell Banker Residential Brokerage New England, declined to comment.
Purposes of an MLS
The Council of MLSs says it agrees with NAR that the purposes of an MLS are to facilitate cooperation between brokers, allow brokers to make offers of compensation, and help them value properties — and that MLSs should not require the disclosure of information that’s not related to those purposes, or which is confidential to the seller.
But requiring listing brokers to submit photos and property disclosures with listings does not conflict with NAR’s intent, the group maintains.
Jay Thompson, a Phoenix, Ariz.-based broker who serves on the Multiple Listing Policy Committee, said he finds it "pitiful that the MLSs even need to have a requirement to include photos. It seems stunningly obvious that every listing in the MLS should have photos."
Unless he hears an argument "that is incredibly convincing," Thompson said he would vote to allow MLSs to be able to require at least an exterior, front-elevation photo.
According to the Council of MLSs, NAR staff have said the current policy recognizes the rights of sellers who may not want pictures of their property in the MLS.
But most MLSs also require brokers to disclose how many bedrooms a home has, or what school district it lies within — even if sellers may rather withhold that information, the group said. Sellers may not want to list the number of bedrooms if one is not up to code, for example, or leave the school district field blank if a home is near, but not within, a desirable school district’s boundaries.
"As with these examples, a seller’s desire to keep a photo of the listing out of MLS can only be calculated to postpone the time when the buyer and her broker find out the truth about the property," the Council of MLSs said.
The group made similar arguments in support of allowing MLSs to require the submission of disclosures with listings.
"Preventing the dissemination of property information contained in the disclosures until the point of visiting the property ultimately achieves only a delay in disclosure with no attached benefits," the Council of MLSs said in its letter to NAR.
"An MLS choosing to require that the information be available within the MLS, rather than on paper at a property, is simply promoting efficient cooperating among brokers."
Art Carter, the CEO of Pomona, Calif.-based Multi-Regional MLS, said MRMLS has had mandatory photo policies in place for nearly a decade, with few complaints from brokers.
"When the policy first went in, digital cameras weren’t the norm," Carter said. "Now that every phone has a digital camera attached, we’re really not getting any complaints."
MRMLS’ photo policy currently mirrors that of CARETS, a regional MLS serving six counties and 106,000 member in Southern California to which MRMLS belongs. …CONTINUED
CARETS, an acronym for California Real Estate Technology Services, requires at least one photo within five calendar days of the listing entry date. Violators get off with a warning for a first offense, a $250 fine or attendance at an MLS rules class for a second offense, and a $500 fine for subsequent violations.
Other MLSs around the country with similar policies include the Wisconsin-based La Crosse Area Realtors Association, which gives brokers 10 calendar days to submit a photo, after which they are fined $12 per month for each photo-less listing.
The photo policy requires photos with all single-family duplex, multifamily and condo listings — even if they are "sold before print" or are in-house listings. Exceptions are allowed on for-sale-by-owner listings, vacant land, and commercial and business listings.
In Peoria, Ill., the local Realtor association requires that photos of new listings be uploaded within two days of the listing date, regardless of the listing status. Violators are subject to a fine of $50 per month.
The Rhode Island State-Wide MLS charges a $50 fine if at least one exterior photo of a property is not submitted with a listing within seven days.
The Georgia MLS allows sellers to opt for a "No photo desired" listing designation, but brokers must provide the seller’s written authorization when the listing is submitted.
Enforcing the rule
Thompson, who was appointed to the committee in the midst of another controversy over a NAR staff ruling, said that if the trade group decides MLSs can’t impose such requirements on brokerages, "enforcement would be difficult, at best."
Niersbach said compliance with mandatory NAR policies is a condition of coverage under the blanket professional liability insurance provided by NAR.
But Niersbach said he had no reason to believe that NAR’s Multiple Listing Policy Committee and board of directors will not establish a policy authorizing MLSs to impose such requirements.
"I am confident the questions will be carefully considered and that reasoned and reasonable decisions will be made by the Realtors and MLS executives serving on the committee," Niersbach said.
He said the committee will consider how many photos might reasonably be required, whether interior photos could be required, whether mandatory photo requirements would apply only to residential property, and how homes under construction and subdivided but unimproved lots would be dealt with.
If the committee votes to issue a definitive statement of policy on the matter next week, the board would have the option of putting off a vote on the issue until November, as it did last year in resolving another controversy over a NAR staff ruling.
When NAR staffers ruled that brokers who allow search engines to index other brokers’ for-sale listings were violating NAR policy, the committee recommended at the midyear 2009 meeting that the policy be amended to allow the practice (see story).
NAR’s board of directors postponed taking action on the recommendation until NAR’s annual meeting in November 2009.
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