How to Comply With MLS Policy Statements 7.42 and 7.43

In a Nutshell

At the 2017 REALTOR® Conference and Expo, the NAR Board of Directors approved revisions to MLS Policy Statements 7.42/7.43 (aka “MLS of Choice”) that requires all MLSs operated by REALTOR® Association(s) to provide a waiver of subscription fees for any licensee who meets the following two criteria:

1. The licensee does not use the MLS’s services.
2. The licensee already subscribes to a different MLS under their principal broker. 

The New Rules

By July 1, 2018, all MLSs must adopt the following language as part of their local MLS rules.

(Underscoring identifies additions; strikethroughs are deletions)

Changes to MLS Policy Statement 7.42 & 7.43

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FAQ About the Revisions

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Section 1.12, Jurisdiction Service Area

Only listings of the designated types of property located within the jurisdiction service area of the MLS are required to be submitted to the service. Listings of property located outside the MLS’s jurisdiction service area will (or will not) be accepted if submitted voluntarily by a participant, but cannot be required by the service. (Amended 11/17) M

Note: Associations must choose whether the service will accept listings from beyond its jurisdiction into the MLS compilation. (Amended 11/88)

Section 6, Service Fee and Charges

Service Charges

Recurring Participation Fee: The annual participation fee of each participant shall be an amount equal to $_____ times each salesperson and licensed or certified appraiser who has access to and use of the service, whether licensed as a broker, sales licensee, or licensed or certified appraiser who is employed by or affiliated as an independent contractor with such participant. Payment of such fees shall be made on or before the first day of the fiscal year of the multiple listing service. Fees shall be prorated on a monthly basis.

However, MLSs must provide participants the option of a no-cost waiver of MLS fees, dues, and charges for any licensee or licensed or certified appraiser who can demonstrate subscription to a different MLS where the principal broker participates. MLSs may, at their discretion, require waiver recipients and their participants to sign a certification for nonuse of its MLS services, which can include penalties and termination of the waiver if violated.* (Adopted 11/17) M

At Least 4 Ways to Comply

Below are four options for implementing the new MLS Policy Statements 7.42 and 7.43. There are likely others as well. In all situations, the principal broker of an office must be an MLS participant before any licensee in that office can receive access to MLS data and services. Waivers are now required where the MLS assesses fees based on each licensee affiliated with an MLS Participant. It is prudent for any waiver forms to include language that explains the penalties and back-payment of subscriber fees in case the MLS’s information and services are misused by waiver recipients.

Examples of waiver forms are available here.     

How an MLS chooses to implement MLS Policies 7.42 and 7.43 is up to their own local discretion. The needs of the brokers and their relationship with the MLS will be a big part of that decision making process including the need to obtain signed waiver forms or verify subscription to a different MLS.

Option 1: The good faith, no-paperwork option 

Here, MLSs would only charge for licensees who affirmatively choose to subscribe to the MLS. MLSs would not verify that other licensees of the brokerage office are subscribers to a different MLS. The MLS would simply bill participants and the subscribers who affirmatively opt-in to the service. This is by far the simplest and easiest way to comply with the new changes to MLS Policies 7.42/7.43.

Option 2: The broker-friendly, single waiver form option

Here, the MLS would require participants to execute one waiver form that would specify which licensees in the participant’s office are subscribers to the MLS and which are not. The form would also require the principal broker to attest to the fact that all licensees receiving a waiver are subscribers at another MLS pursuant to the principal broker’s participation in that other MLS. This might be the preferred method by brokers since it avoids undue paperwork with multiple waiver forms for the same office.

Option 3: The one-waiver-per-licensee option 

Here, the MLS would require each licensee requesting a waiver of subscriber fees to execute a waiver form certifying that the licensee will not use the MLS’s services and that the licensee subscribes to another MLS pursuant to their principal broker’s participation in that other MLS. This option may create additional administration by the MLS, brokers, and licensees, especially if there is a periodic renewal of waivers. However, as the signing party, this option ensures that the licensee is fully knowledgeable of the waiver terms and the consequences for noncompliance.

Option 4. The waiver plus verification option 

Here, the MLS would require the broker and/or licensee to execute a waiver form and to provide documentation verifying the licensee’s subscription to an alternate MLS. This option would provide for the greatest amount of information to the MLS, but would also create the most administrative burden. 

Note: Any waiver conditions that exceed those in the sample waiver agreements should be reviewed by association legal counsel.

Life After Implementation

  • Record keeping – depending on the billing and waiver options implemented locally, MLSs should consider the best course of action to maintain records relative to signed waiver agreements, and the list of subscribers or waiver recipients affiliated with an MLS participant.
  • Enforcement – MLSs should consider establishing and consistently applying penalties for misuse of MLS information and services by waiver recipients and unauthorized licensees, including the possible assessment of MLS fees back-billed to a specific date.

There Is Always More

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