Amid a heated industrywide debate over off-market listings, Compass this week sent a “pre-litigation letter” to Bright MLS threatening legal action over the multiple listing service’s new pocket listing policy.

The letter was sent Tuesday and characterizes Compass as a “concerned” member of Bright MLS. It then goes on to argue that Bright MLS’s new off-market listing rules “directly contradict” their stated aims of increasing cooperation and improving the consumer experience.

“Specifically, the limitations it places on brokerage pre-MLS marketing programs — and, in turn, consumer choice — are highly problematic,” the letter states.

Brian Donnellan, Bright MLS

Brian Donnellan

Significantly, the letter reveals that Compass is “prepared to take direct legal action to challenge this policy and recuperate any and all damages associated with its implementation.” In other words, Compass is willing to sue to fight the new rule.

The letter is referring to a policy that Bright MLS adopted two weeks ago. The policy requires Bright MLS’s roughly 95,000 members in the Mid-Atlantic region to post their properties to the multiple listing service within a day of marketing them. Beginning Dec. 1, agents who break the rule can face $5,000 fines.

Though the policy still allows for “office exclusives,” it effectively bans off-market and pocket listings, the latter of which are sometimes promoted for days or weeks before becoming available to the wider market.

Bright MLS’s new policy is a slightly tweaked version of a proposal the National Association of Realtors floated at the beginning of October. That proposal hasn’t become a rule yet, but has already sparked significant debate with both supporters and detractors in the industry.

Cory Perkins

Cory Perkins — Compass’ head of inventory, strategy and operations — penned the letter to Bright MLS. The letter is specifically addressed to Bright MLS CEO Brian Donnellan. As of Wednesday evening, Compass had not yet received a response from Donnellan or Bright MLS.

In the letter, Perkins is critical of Bright MLS’s policy, describing it as a move “toward unlawful, anti-consumer and anti-competitive practices.” He also argues that the policy represents a restraint on free trade that could open Bright MLS to legal risk, and may violate anti-trust laws.

“If it were not for Bright’s overwhelming market power and position, we would simply show our disagreement by taking our business elsewhere,” Perkins adds in the letter. “Unfortunately, that is not an option as there is no viable alternative in the market, underscoring this policy’s gravity and impact on both members and consumers.”

Perkins also argues that the policy could result in agents breaching their fiduciary duty, that it reduces transparency, and that brokerages may sue to collect damages for an array of things such as loss of listings and profits.

The letter concludes with a description of an “appropriate path forward” suggesting, among other things, that a revised policy will let brokerages “continue to offer pre-MLS marketing programs to their clients.”

Read Compass’ full letter below: 

Email Jim Dalrymple II

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