C.A.R. MLS Policy Committee Proposed New C.A.R. Model MLS Lockbox Requirements Rule
This Issues Briefing Paper is for Study only and has not been approved by the MLS Policy Committee, Executive Committee, or the Board of Directors.
Especially during these difficult years with distressed properties dominating many markets, C.A.R. members have expressed a great deal of frustration over the lack of cooperation and professionalism some practitioners in the real estate market have demonstrated. This has surely played out with regard to lockbox use – or as many REALTORS® instead would describe it - lockbox misuse. In these instances, listing agents submit listings to the MLS on the one hand, yet engage in certain practices undercutting cooperation agents’ ability to access and show the listing on the other hand (such as placing non-conforming access devices on the properties and refusing/failing to provide access codes or instructions, etc.).
In the face of countless complaints of being denied access to show listed property, MLSs have attempted to mandate use of MLS-authorized lockboxes which allow all lockbox participants to work off the same system and access the listing by the lockbox system’s corresponding key cards. However, strictly enforcing such a mandate has clashed with NAR’s Lockbox Policy requiring that participation in an AOR/MLS lockbox program be voluntary.
At the January 2012 C.A.R. meeting, the C.A.R.’s MLS Committee expressed disenchantment with the constraints of NAR Lockbox Policy and passed a motion which CAR adopted to petition NAR to change its MLS lockbox policy so that an MLS be allowed to require Participants and Subscribers to use an MLS designated or authorized lockbox on properties submitted to the service.
NAR took this issue up at its mid-year meeting and ultimately refused to grant CAR’s request for a broad change in lockbox policy allowing MLSs to strictly mandate use of AOR/MLS authorized lockboxes. Instead, NAR created a new standard for lockbox policy based on requiring “reasonable and timely access” to listed property. Essentially, the new policy allows an MLS to require placement of an “MLS-approved” lockbox or access device, but then expressly states that non-AOR/MLS issued access devices could qualify as “MLS-approved” if they provide “reasonable and timely access” to listed property. The policy allows an MLS the discretion to develop the criteria for defining “reasonable and timely access.”
NAR’S NEW LOCKBOX POLICY:
NAR’s new Lockbox Policy Statement 7.31 on Lockbox Security Requirements states as follows:
MLSs may, as a matter of local option, require placement of an MLS approved lock box on listed properties if any device giving access to real estate professionals and/or service providers is authorized by the seller and occupant and is placed on the property. The purpose of this requirement, if adopted by an MLS, is to ensure cooperating participants and subscribers have timely access to listed properties. Requiring that a lock box or other access device be “MLS-approved” does not limit the devices that satisfy the requirement to lock boxes leased or sold by an association or MLS. The MLS may require that the devices be submitted in advance for approval, and the access device may be any lock box or other access device that provides reasonable, timely access to listed property. The MLS also may revoke the approval and/or subject the participant to discipline if the device is used in a manner that fails to continue to satisfy this requirement.
Thus, in a nutshell, an MLS is allowed to mandate that access devices be “MLS-approved” in that they provide “reasonable and timely access” to listed property. An MLS can deem those lockboxes issued by an AOR/MLS to be “MLS-approved.” But an MLS also has to allow non-AOR/MLS issued devices as “MLS-approved” if they provide “reasonable and timely access” to listed property. NAR did not create a specific definition for “reasonable and timely access.” Instead, an MLS has the discretion to develop its criteria, based on local custom and practice. The criteria, though, should be written, reasonable, objective and consistently applied.
C.A.R.’S NEW MODEL MLS LOCKBOX RULE PROPOSAL:
In light of the new NAR lockbox standards, C.A.R.’s current lockbox rule needs to be replaced with one which reflects the new parameters of NAR lockbox policy. C.A.R. staff has proposed a draft lockbox rule for the MLS Committee’s consideration. It includes an enumeration of the specific criteria required for satisfying the “reasonable and timely access” standard. C.A.R. staff has gone back and forth with NAR to vet this draft and has received preliminary NAR approval in concept. (Submission to NAR for formal approval would still be necessary should the draft be adopted into the C.A.R. Model MLS Rules, however). The proposal has also been circulated to several MLSs and industry representatives for initial feedback to hopefully improve its clarity and workability prior to placing before the Committee. The resulting proposal is set forth immediately below (followed by guidelines for how it would work in practice):
13.2.2 Lockbox Type Requirements. Participants and Subscribers who utilize lockboxes or other access devices shall use the designated or authorized lockbox required by the MLS where the listing is submitted. More than one lockbox or access device may be used on a property as long as one of them is the lockbox designated or authorized by the MLS where the listing is submitted.
13.2.2 Lockbox Requirements. If any lockbox or other device giving access to listed property for real estate professionals and/or service providers is authorized by the seller and occupant and is placed on or present on property listed through the Service, such lockbox or device must be one that is approved by the MLS where the listing has been submitted. The authorized lockboxes sold by, leased by or otherwise offered through the local Association or MLS where the listing is submitted have been approved by the MLS. Unless expressly indicated otherwise by the MLS, for any other lockbox or device to be considered “MLS-approved,” use of it must provide reasonable, timely access to listed property such that (1) it allows all participants and subscribers timely access to listed property by reliance solely on data submitted to and residing on the MLS; (2) complete, accurate and stand-alone instructions are provided for accessing the listed property in the appropriate agent section on the Service; and (3) it ensures that the lockbox or device will provide reasonable access to listed property with any information, code or key needed to access the contents of the lockbox or device to be made available or access to the property otherwise scheduled within four  hours of initial contact in the event the lockbox or device requires the participating member to obtain additional information to enable access (ex: “call listing agent for entry code”) with said 4 hour response obligation in effect every day from 8am to 6pm. The MLS reserves the right to require that the device be submitted in advance for approval. The MLS also may revoke the approval and/or subject the participant to discipline if the device is used in a manner that fails to continue to satisfy this requirement. Failure to provide reasonable and timely access as required by this section will subject the listing agent to discipline and potential fines. More than one lockbox or access device may be used on a property as long as one of them is MLS-approved where the listing is submitted. [FYI, Failure to Comply with Lockbox Requirements to remain in Tier Two of the Model Citation Policy].
Here are guidelines for how this proposed new C.A.R. Model MLS Lockbox Requirements Rule would work in application:
If seller (and occupant) authorizes any lockbox or other device to enable access for real estate professionals or service providers, and said device is placed or present on the property (even if not placed there by the listing broker), the rule is triggered, and the lockbox or access device must be one that is approved by the MLS where the listing has been submitted.
AOR/MLS issued lockboxes (ex: a board’s authorized Supra or Sentrilock systems) are automatically deemed “MLS-approved.
”Non-AOR/MLS issued devices must meet the “reasonable and timely access standard” outlined in the rule in order to qualify as “MLS-approved.”
“Reasonable and timely access standard” will require all necessary information to reside on the MLS itself which in effect would prohibit the conveyance of access info by way of links on the MLS. [Note: requiring all necessary info to reside on the MLS may also end up encouraging more communication of codes directly on the Service which may help w access but possibly create other concerns].
If participating member must obtain additional information by contacting the listing agent in order to gain access, access must be granted or scheduled within 4 hours of initial contact by inquiring participant.
4 hour response obligation runs from 8am-6pm every day; the obligation to respond to any unanswered inquiries from the previous afternoon would resume the following morning and pick up where the clock left off (i.e. initial contact made Tues at 3:30pm is owed a response no later than 9:30am on Wed).
Listing agent would state desired method for initial contact in the MLS (ex: calling, texting, emailing); use of additional methods based on contact info available through the MLS could also be used to further bolster one’s effort to initiate contact (and make a case for failure to provide reasonable and timely access, should one or all methods be ignored).
Draft for the Model Rules builds in flexibility regarding any MLS pre-approval process. Some MLSs may have the resources to set up a formalized pre-approval protocol or outline while others will just operate on the "complaint" system meaning that if the MLS gets a report of untimely/unreasonable access, it will then engage.
Failure to provide reasonable and timely access as required by this section will subject the listing agent to discipline and potential fines; as with he previous version of the lockbox rule, violations will remain in Tier Two of the Model Citation Policy.
As with the previous version of the lockbox rule, more than one lockbox or access device may be used on a property as long as one of them is MLS-approved where the listing is submitted.
Should the Committee decide to adopt the proposed new Lockbox Requirements Rules into the C.A.R. Model MLS Rules, it should pass the following motion:
That, upon final approval by NAR, C.A.R. Model MLS Rule 13.2.2 be revised to adopt the new proposed Lockbox Requirement Rule as set forth above.