Window to the Law: 2018 MLS and NAR Policy Changes

Welcome to Window to the Law- I am Finley Maxson, NAR Senior Counsel. In this edition, we will highlight some of the significant changes to NAR policy in 2018. I am joined by Kate Lawton, NAR’s Director of Professional Standards and Financial Administration, and Rodney Gansho, NAR’s Managing Director of Membership Policy.

Article 12 of NAR’s Code of Ethics requires REALTORS^® to “be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations”. I understand that the NAR Board of Director’s recently approved an amendment to Standard of Practice 12-10 which has received a great deal of attention. Kate, can you help REALTORS^® understand how Statement of Practice 12-10 was amended and the impact of these amendments?

Effective January 1, 2018, NAR’s Board of Directors approved an amendment to Statement of Practice 12-10, making clear that REALTORS^® are prohibited from misleading consumers through the use of misleading photos. With more and more consumers beginning their home search online, listing photographs have become an invaluable tool in selecting a home, and with the availability of technology that makes manipulating images easy, this has become an issue that needed attention. As you mentioned, Article 12 of the REALTOR^® Code of Ethics prevents REALTORS® from deceiving consumers through the use of misleading images, such as in a property listing. These changes to Standard of Practice 12-10 now require an ethics hearing panel to determine whether an image is misleading, which will be determined on a case-by-case basis, and whether digital manipulations or enhancements of images present a consumer with a misleading image rather than a true picture of a property listing. These amendments are intended to ensure that REALTORS® remain a trusted advisor throughout the transaction by using images that accurately represent the true condition of a home or piece of real property.

Thanks Kate. Rodney, what were some of the major changes to MLS policy in 2018?

There are several significant changes to MLS Policy in 2018. First, I’d like to cover the changes to Policy Statement 7.43: Waivers of MLS Fees, Dues and Charges. The amendments to this Policy Statement now require all REALTOR^®-association-owned-and-operated MLSs to include a waiver of subscription fees for licensees who can demonstrate a subscription to a different MLS and do not want to use that particular MLS. With this change, MLSs may require licensees, and their brokers, to sign a certificate of nonuse prior to granting such a waiver, and many MLSs are including sanctions of $1000 for unauthorized access and use of MLS content where the MLS waiver has been granted. MLSs may begin offering the waiver option now, but are required to implement the mandatory waiver option by no later than July 1, 2018.

Next, with the Audio Delivery of IDX in MLS Policy Statement 7.58, MLS Participants may now use IDX data feeds to deliver MLS listing content verbally through smart speakers like an Amazon Echo. It is important to remember, however, that in order to comply with IDX rules, if an MLS Participant provides an audio delivery of listing content, an electronic communication must be provided with all required IDX disclosures to the registered user for the device.

In addition to the Audio Delivery of IDX, amendments were made to the available sold data and IDX property search results. As a result of this amendment, where sold information is made publicly available, MLS participants are now entitled to receive sold information dating back to Jan 1, 2012 as part of their IDX data feed. For search results, IDX -- AND VOW -- now provide for a greater number of minimum results of 500 listings or 50% of the MLS’s database to consumer property searches.

Lastly, NAR’s Lockbox Security Requirements in MLS Policy Statement 7.31, were completely overhauled in order to recognize current business practices and the latest technology, such as temporary access codes, using mobile devices as a key to open lockboxes, and measures to address increased security threats related to different types of cyber attacks. These enhanced lockbox policies will better protect MLSs operating a lock box system, the brokers and licensees using those services, and clients who authorize placing a lockbox on their property.

Thanks Rodney.

To learn more about these changes as well as other important information about NAR policy, please refer to these resources.

Thank you for watching this edition of Window to the Law.