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Compass CEO Robert Reffkin has officially informed the National Association of Realtors and multiple listing services across the country, in writing, that the national real estate brokerage does not consider NAR’s Clear Cooperation Policy or any other national NAR MLS rule as “binding” and will not comply with them.
However, the brokerage said it will continue to train its agents to comply with local MLS rules, including those that MLSs adopt at NAR’s behest. MLSs that adopt the Clear Cooperation Policy require listing brokers to submit listings to their platform within one business day of publicly marketing them.
“Compass does not consider the Clear Cooperation Policy or any national NAR MLS rule impacting clients as binding and, accordingly, has not and will not adhere to CCP or any national NAR MLS rule impacting clients as a matter of course,” Reffkin wrote in a letter Compass sent to NAR and MLS leaders this week.
“Programmatically, Compass has not followed any national, mandatory NAR MLS rules in a consistent or coordinated manner. Each MLS in which Compass operates has its own rules, and our agents are trained to comply with local MLS regulations, not national NAR mandates restricting client options,” he added.
NAR did not respond to a request for comment. Howard Hanna CEO Hoby Hanna sent a similar letter to NAR and more than 70 MLSs in May.
Reffkin is clear in his letter that this is not the first time Compass has informed NAR of Compass’s lack of compliance with the CCP.
“[W]e met with NAR’s CEO on May 2, 2024, to explain CCP’s illegality and affirm our non-adherence to the rule,” Reffkin wrote.
“In September 2024, we formally proposed to NAR’s Emerging Issues Committee that the rule be removed entirely.”
Reffkin is referring to NAR’s MLS Technology and Emerging Issues Advisory Board, a subset of NAR’s Multiple Listing Issues and Policies Committee, which handed off the decision of whether to repeal the CCP to NAR’s leadership team. NAR ultimately decided to keep the policy, but added a new policy called Multiple Listing Options for Sellers, which allowed for the delayed marketing of listings.
For perhaps the first time, Reffkin’s letter stresses that Compass won’t follow “any national NAR MLS rule impacting clients.” However, it does not specify what other rules besides CCP the company is referring to. NAR’s MLS policy handbook is 199 pages long. The company said it had no other rule in mind when drafting the letter, simply “rules that may restrict consumer choice.”
The CCP, like all NAR MLS rules, is not a rule that NAR directly requires any listing broker to follow and NAR does not impose any consequences on brokers who do not follow the rules. NAR MLS rules are adopted by local or regional Realtor-affiliated MLSs, which then require and enforce the rules on their agent and broker subscribers.
MLS subscribers who violate local MLS rules may face fines — sometimes hefty ones of thousands of dollars in the case of a CCP violation — from the MLS, as well as possible suspension or expulsion for repeat violations.
Compass does not generally have a practice of reimbursing for fines, the brokerage told Inman.
“Each agent makes a decision based on the demands and needs of their sellers,” Compass said.
“There’s some agents who their seller is very specific in directing them to market their home in a specific way, and the agent is comfortable incurring the fine as a result of that. It’s the local agent’s decision to think about how to market their home based on the instruction they get from a seller.”
The letter is Compass’s latest volley against a rule the brokerage has publicly opposed from before NAR enacted it in 2020. But Compass said it had previously “never formalized” or “shared broadly across the MLSs” its business practice in regards to CCP before. Compass says it subscribes to about 250 MLSs.
“The purpose of the letter is simply to ensure that it is well understood broadly amongst the relevant stakeholder groups that Compass as a corporation is not complying with or adhering to the national NAR MLS-mandated rule around CCP,” Compass told Inman.
“This is not a new practice [or] a new behavior, but the letters are sort of putting a point on or really clarifying that practice in a pronounced way,” Compass added.
The move also appears to be one that is meant to provide the company with some legal cover.
“National NAR-mandated MLS rules have created tremendous legal risk for the industry,” Compass said.
“Obviously, the commissions lawsuits being the most recent of those … that cost the industry a billion dollars. That’s an added consideration here: the need to be on the record, so to speak, as not in compliance with the rules of CCP.”
Compass believes it’s important to articulate that it’s not necessarily going to follow everything that NAR mandates, particularly after having to pay out $57.5 million to settle its own commission-related antitrust lawsuits that stemmed from NAR’s now-defunct cooperative compensation rule, the company said.
“The rule that the commission lawsuits for Sitzer/Burnett was really anchored around was a nuanced rule, not one that I think certainly Compass or other brokerages really supported or felt strongly about, and yet we were on the hook for nearly $60 million for a rule we didn’t create and we didn’t necessarily support,” Compass said.
“Fool me once, shame on you. Fool me twice, shame on me. We’re trying to be more proactive in how we think about ensuring that we’re not blindly following every rule that’s nominated. We recognize that those are the things that can get the industry in trouble.”
Inman has asked whether Compass has thus far been sued over the CCP and will update this story if and when a response is received. Compass itself has filed lawsuits against Northwest MLS (NWMLS) and Zillow for their policies regarding marketing listings off of the MLS — a practice crucial to Compass’s business model.
According to Compass, in the last several weeks, the brokerage has updated its company policies to “state that Compass will not ask agents to follow, and will not adhere to, CCP or any national MLS mandates restricting how they work with their clients and will not ask any clients to follow any national NAR MLS mandates.”
Reffkin’s letter references the update and adds, “Instead, Compass will continue to determine on a market-by-market basis whether to require its listing brokers to submit listings on a multiple listing service within any specific timeframe. These decisions are made based solely on Compass’s own business interests, independent of NAR and any other brokerage.”
Compass told Inman that local Compass brokers are empowered to train their agents to follow whatever MLS rules make sense locally.
“Our agents are well-informed of what constitutes a violation of CCP,” Compass said.
“We are not requiring our agents to adhere to CCP. Our business practices [are] consistent with local CCP implementation. But again, there are times where sellers and their agents choose to do something different that may result in a CCP violation, and we don’t punish our agents if they do that.”
Asked whether Compass had any criteria the company wanted its brokers and agents to consider when making those decisions, Compass noted there was “a lot of local nuance in these businesses” in terms of what local and state laws are and what local Realtor association and MLS rules are.
“We think that our agents should be working as fiduciaries to the buyers and sellers they represent, and they should be advising, but ultimately following the direction of their clients,” Compass said.
“They’re legally bound to do that by state law in almost every state. Over and above that, at the local level, these are really brokers of records whose responsibility is to ensure compliance and ethical business practices per existing, localized mechanisms. So they’re going to continue to do that in a way they always have. It’s really brokers of record at the local level who are licensed, as such, who will continue to make the localized decisions around compliance.”
Read Reffkin’s letter in full below:
Subject: NAR National MLS Mandates
From: Robert
To:
Dear [MLS Name/NAR Leadership],
Compass’s position on NAR’s Clear Cooperation Policy (“CCP”) or similar rules is, and always has been, clear. Compass has never agreed to or with CCP, and explicitly voted against it in 2019. Since CCP’s inception, Compass has consistently acted to demonstrate its non-adherence to the policy’s consumer restrictions, utilizing Compass Private Exclusives and Compass Coming Soons to provide consumers with broader choices and options to market properties outside of NAR’s MLSs.
Compass has been a vocal and active opponent of the CCP since its initial proposal in 2019, consistently lobbying NAR and local MLSs for its full removal due to its anti-competitive and anti-consumer nature. In addition to voting against the policy in 2019, our sustained opposition has included organized lobbying efforts, direct engagement with NAR’s leadership and legal teams, issuing a demand letter to Bright MLS in October 2019 to prevent premature implementation, and discussing our opposition with representatives of the US Department of Justice. More recently, we met with NAR’s CEO on May 2, 2024, to explain CCP’s illegality and affirm our non-adherence to the rule. In September 2024, we formally proposed to NAR’s Emerging Issues Committee that the rule be removed entirely.
For many years, Compass repeatedly warned the industry of the legal risk of rules like CCP, especially from future class actions. In the coming years, the risk is significant that the industry could face class actions that are distinct from the currently pending compensation-focused cases, with the potential for a significant amount of damages.
Compass does not consider the Clear Cooperation Policy or any national NAR MLS rule impacting clients as binding and, accordingly, has not and will not adhere to CCP or any national NAR MLS rule impacting clients as a matter of course. This is reflected in our company policies with our agents, in which we state that Compass will not ask agents to follow, and will not adhere to, CCP or any national MLS mandates restricting how they work with their clients and will not ask any clients to follow any national NAR MLS mandates. Programmatically, Compass has not followed any national, mandatory NAR MLS rules in a consistent or coordinated manner. Each MLS in which Compass operates has its own rules, and our agents are trained to comply with local MLS regulations, not national NAR mandates restricting client options.
Instead, Compass will continue to determine on a market-by-market basis whether to require its listing brokers to submit listings on a multiple listing service within any specific timeframe. These decisions are made based solely on Compass’s own business interests, independent of NAR and any other brokerage.
Sincerely,
Robert
