Two years of litigation between competing Realtor associations in San Diego have come to an end. The settlement leaves their multiple listing service diminished, but intact.
The deal resolves two lawsuits filed in 2016 between the three association shareholders of regional MLS Sandicor, which has about 20,000 agent and broker subscribers, and frees the associations to go their separate ways.
In January 2016, the largest of Sandicor’s shareholders, the Greater San Diego Association of Realtors, sued Sandicor and its other two shareholders, the North San Diego County Association of Realtors and the Pacific Southwest Association of Realtors, alleging NSDCAR and PSAR denied GSDAR access to its own MLS data and used Sandicor to compete unfairly with GSDAR for members.
In October 2016, the North County and Pacific Southwest associations filed a separate lawsuit seeking to dissolve Sandicor and protect their rights to its MLS data, prompting the larger association to urge the court to allow a buyout instead. Last month, a state court declared that the smaller associations had not proven that the larger association could not buy them out and now the trade groups have come to a settlement, staving off a trial scheduled for late April.
In a deal set to close in September, the North County and Pacific Southwest associations will relinquish their ownership in Sandicor, leaving the Greater San Diego association as the sole owner, Sandicor CEO Ray Ewing told Inman in an interview Tuesday. The smaller associations will join the largest MLS in the country, California Regional MLS (CRMLS). CRMLS had previously extended its services to members of those associations in December.
Ewing declined to share what Sandicor is paying the two smaller associations for their combined equity stake of about 38 percent. Asked whether Sandicor was buying out the associations’ ownership stakes, CRMLS CEO Art Carter objected to the term “buyout” and said it did not accurately describe the settlement. He said rather that the deal fell between a dissolution and a buyout, but said he could not provide further details due to confidentiality.
“[T]he parties worked very diligently together to craft a unique resolution in the middle, which provided all associations with their desired MLS outcome,” he told Inman via email.
All three Realtor associations are giving up their rights to the Sandicor brand, which will no longer exist. What is now Sandicor will be renamed the San Diego MLS, owned by the Greater San Diego association, which has about 12,000 members. The Greater San Diego association will keep the MLS data of its members, including historical listing data, Ewing said. The rights to the MLS data of the 8,000 or so members of the other two smaller associations will go to CRMLS.
“I truly believe this really will be the best for everybody and will let each side do the things they want to do to serve their members,” Ewing said.
As part of a data share, Sandicor and CRMLS currently store each other’s listings — active and historical — in their respective databases and their members make offers of cooperation and compensation to each other. That will not change when Sandicor becomes San Diego MLS, according to Ewing. The current data share with Sandicor allows for IDX feeds that include data from both MLSs and that will be included in a five-year contract extension with SDMLS, CRMLS told Inman.
Sandicor’s MLS system, Paragon from Black Knight, is currently hosted in-house but will move to Black Knight’s servers as part of the settlement. In addition to putting the database in the hands of a neutral party, the change will allow Black Knight to more easily manage the system directly, according to Ewing. It will also allow for association-level permissions that will let the members of each association see each other’s listings, but not change them, he added.
The new Paragon system, shared between CRMLS and SDMLS, will take at least six months to build, but will have the same design and functionality as the current system, the associations, Sandicor, and CRMLS said in a joint press release.
“All members will continue to have the same look and feel that Sandicor members have grown accustomed to, with no disruption of service,” the release said.
“In addition to keeping the Paragon system in place for all agents in San Diego County, users will have access to all listings and sold data for the entire county as well.”
CRMLS and SDMLS may choose to offer their own unique dashboards for agents to log into the MLS and to promote their products, but otherwise agents and brokers will not see anything different, according to Ewing.
“All the same reports will be there. There’s no conversion … so it will be business as usual for everybody on an agent level or a broker level,” he said.
When asked what got the parties to settle, Ewing said, “Probably the cost of lawsuits. They’ve been working on this quite a while. [Each said] ‘We need to resolve it … and do what we need to do for our membership’ and each side has a different view of what that is, but the common goal was to serve the membership and no interruption to their business.”
He declined to offer an estimate on how much the litigation cost. “We [Sandicor] had insurance. And quite frankly it really wasn’t with us. It was really about us, and it was between the associations,” he said.
Ewing himself will not stick around to lead San Diego MLS. He said it was his decision to move on, but declined to say why. “My focus right now is making sure that this thing is successfully done and, until we have that done, that’s going to remain my focus.” He will stay “till the divorce” in September, he said. By then, he will have been with Sandicor nearly 19 years.