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IBP-Clarifying the MLS Mandatory Submission Rule

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C.A.R. MLS Policy Committee
Assembling Work Group re Clarifying the MLS Mandatory Submission 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.


INTRODUCTION: 

There are a couple of ambiguities that periodically arise in the interpretation of an MLS’s Mandatory Submission rule.  To make the rule clearer and more uniform in application, it would be helpful for this group to assemble a Work Group to provide input to Staff and make clarifying recommendations to present back to the MLS Committee for consideration.

DISCUSSION: 

The C.A.R. Model MLS Mandatory Submission Rule is as follows:

7.5  Mandatory Submission.  Broker Participants shall input exclusive right to sell or exclusive agency listings on one to four unit residential property and vacant lots located within the service area of the MLS within 2 days after all necessary signatures of the seller(s) have been obtained on the listing or at the start date of the listing, whichever is later.  Only those listings that are within the service area of the MLS must be input.  Open listings or listings of property located outside the MLS's service area (see section 7.7) are not required by the service, but may be input at the Broker Participant’s option.

Under this rule, there are often questions about (1) what are the requisite “necessary signatures” triggering entitlement and obligation to submit a listing, and (2) what is the “start date” of a listing.  Answering the first question is more of a legal matter while answering the second one is a more philosophical matter.

Necessary Signatures

The “necessary signature” question often arises in the context of divorce. Perhaps only one spouse has entered into a listing agreement.  The property is still jointly owned, but a listing agreement has been entered into between only one of the feuding spouses and listing agent.  Can/must the listing be submitted?  There are undoubtedly many legal and other concerns which exist in selling a property where there are known additional property owners not on the listing (marketability, disclosure, potential fraud, etc).  However, from an MLS perspective, “necessary signatures” means signatures that are necessary to create an enforceable listing – which would not have to include all owners.

Perhaps it would be advisable to revise the mandatory submission rule to clarify that necessary signatures means signatures that are necessary to create an enforceable listing but not necessarily all owners, and add an additional disclosure requirement in the Model MLS Rules that the MLS information must state whether there are known additional property owners not on the listing and whether the seller will sell contingent on the consent of those additional property owners (or obtaining court order to sell, etc). 

Start Date of a Listing

The purpose of creating a postponed “start date” option into the rule was in anticipation of scenarios where the listing agreement has been signed but there has been either a delay in sending it back to the listing agent or some other “intended” form of postponement such that MLS submission within 2 days of signing is either impossible or unfeasible.  However, the term can generate confusion about when the listing is actually required to be submitted or whether a seller exclusion should be required and what is the impact on the days on market calculation.  These questions also pose a philosophical dilemma about what it means to be “on market” and whether it means days on the MLS or days in an active marketing status regardless of whether submitted to the MLS.  These are all issues that would benefit from some vetting by a Work Group with recommendations to be made to the MLS Committee thereafter.

 

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