MLS/Computer and Business Technology Committee Proposed Revocation of VOW Rules fromC.A.R. Model MLS RulesThe following is for study only and has NOT been approved by the MLS/Computer and Business Technology Committee, Executive Committee, or the Board of Directors.Issue:Revoking the VOW Rules previouslyadopted into the C.A.R. Model MLS Rules (C.A.R. Model MLS Rule 12.19, and the parity provisions or other miscellaneous references to the VOW rules set forth in Rules 12.8, 12.11, 12.12, 12.14, 12.15, 12.15.1, 12.15.4, and 12.15.5) in light of the ongoingU.S. Department of Justice litigation against NAR regarding the policy.Recommendation: That (1) C.A.R. Model MLS Rules be revised to revoke the VOW policy in its entirety as set forth in these papers; OR (2) C.A.R. Model MLS Rules be revised to revoke the VOW policy as set forth above with the exception of Rule 12.15.5.Background Information:As you may recall, C.A.R. formally adoptedthe National Association of REALTORS® (“NAR”)’s Virtual Office Website (“VOW”) policy into its Model MLS Rules back in October of 2003. Within a couple of months thereafter, the U.S. Department of Justice (“DOJ”) announced a formal investigation into NAR’s VOW policy. In response, NAR advised local and state associations that it stood behind the policy and would support any associations that had adopted it, but at the same time, postponed the VOW policy’s required implementation date.As the years went by, NAR continued to postpone the implementation date as it awaited further direction fromthe DOJ. During this time, the provisions of the VOW policy have remained in the C.A.R. Model MLS Rules, although C.A.R. Corporate Legal staff has advised local associations and MLSs to refrain from adopting and/or implementing the VOWprovisions until we learned more about the direction of the DOJ investigation.In September of 2005, the DOJ revealed the direction it was taking by filing an antitrust lawsuit against NAR, challenging its VOW policy. Of particular concern are the three (3) provisions of the policy commonly known as "opt out" (both blanket and selective), the referral restriction, and the advertising restriction. These 3 provisions have previously been adopted into the C.A.R. Model MLS Rules in sections 12.19.2, 12.19.3(l), and 12.19.6. Since the litigation, NAR has expressly warned associations not to adopt these provisions, or if adopted, not to implement them.Additionally, the DOJ added antitrust allegations to its complaint against NAR regarding the brand new Internet Listing Display (“ILD”) policy that NAR had just adopted. This prospective ILD policy was designed to create a singular replacement internet display policy, rather than one for VOWs and another for Internet Data Exchange (“IDX”) sites. Similar to its response in the VOW situation, NAR has stated that it strongly backs its policies, but as a precaution, has urged MLSs not to adopt the new ILD policy until this lawsuit is resolved. C.A.R. has not adopted the ILD policy into its Model MLS Rules. In light of all these developments, it appears that the VOW policy as originally formed will not come to be. Moreover, with express advice not to adopt or implement certain provisions within the policy, it seems prudent to formallyremove the VOW policy in its entirety from the C.A.R. Model MLS Rules at this time. The remaining MLS rules will obviously still be in place to govern all applicable conduct.Proposed Rules Changes:(1) The proposed revisions to the C.A.R. Model MLS Rules, should the VOW policy be revoked in its entirety, are set forth in strikeoutsand underlines as follows:12.8 Advertising of Listing Filed With the MLS.A listing shall not be advertised by any participant or subscriber, other than the listing broker, without the priorconsent of the listing broker except as provided in Sections12.16and 12.19relating to display of listings on the internet.…12.11 Use of MLS Information. In recognition that the purpose of the MLS is to market properties and offer compensation to other broker participants and r.e. subscribers for the sole purpose of selling the property, and that sellers of properties filed with the service have not given permission to disseminate the information for any other purpose, participants and subscribers are expressly prohibited from using MLS information for any purpose other than to market property to bonafideprospective purchasers or to support market evaluations or appraisals as specifically allowed by Sections 12.14, 12.15,and 12.16and 12.19. Any uses of MLS information inconsistent with these Sections is expressly prohibited. Nothing in this Section, however, shall limit the A.O.R. from entering into licensing agreements with MLS participants and subscribers or other third parties for use of the MLS information.12.12 Confidentiality of MLS Information. Any information provided by the service to the participants and subscribers shall be considered and treated as confidential by participantsand subscribers and shall be for the exclusive use of the participants and subscribers for purposes described in Sections 2, 12.7, 12.11, 12.14, 12.15,and 12.16, 12.19and this section. Participants and subscribers shall at all times maintain control over and responsibility for each copy of any MLS compilation leased to them by the A.O.R. and shall not distribute any such copies to persons other than participants and subscribers. Participants and subscribers are responsible for the security of their passcodes and shall not give or allow use of or make available their pass codes to any person. Participants and subscribers may reproduce or display the information as provided in these rules.…12.14 Display. Subject to Sections 12.15,and 12.16and 12.19, broker participants and r.e. subscribers shall be permitted to display the MLS compilation in either electronic or printed format to specifically identified and bonafide prospective purchasers only in conjunction with their ordinary business activities of attempting to locate ready, willing and able buyers for the properties described in said MLS compilation. Broker participants and r.e. subscribers shall be permitted to display the MLS compilation in either electronic orprinted format to specifically identified and bonafide sellers or prospective sellers only in conjunction with their ordinary business activities in listing properties. Appraiser participants and appraiser subscribers shall be permitted to display the MLS compilation to the person requesting the appraisal only in conjunction with their ordinary business activities of producing a written appraisal. Such displays under this section shall be only in the immediate presence of the MLS participant or subscriber.…12.15 Reproduction. "Reproduction" shall include, but not be limited to, making photocopies, computer printouts, electronic transfers (includingemail), or downloading of MLS data or compilations. Participants and subscribers or their affiliated licensees shall not reproduce any MLS compilation or any portion thereof except as provided in Sections12.16, 12.19and in the following limited circumstances:[FYI: The changes in the section below reflect parity provisions]12.15.1 Copiesto Prospective Purchasers. Broker participants and r.e. subscribers may reproduce from the MLS compilation, and distribute to prospective real estate purchasers, copies of those portions of the MLS compilation consisting only of a description of the property, including the address, features, financing and price.Such “client copies” shall also comply with the following:a. No advertising may be visibleexcept that the name, company logo and contact information of the Participant and/or the name, company logo and contact information of the non-principal broker or sales licensee, and any other information required byCalifornia law or regulation may not be prohibited.
b. Permissible MLS data may be augmented with additional data not otherwise prohibited from display, provided the source of any additional data is clearly identified.
[However, use of “sold” information, in conjunction with work product, to develop or support opinions of real property value or price (ex: appraisals, broker price opinions and Comparable Market Analysis (“CMAs”)) is permissible as long as such opinions of real property value or price consist of more than a mere recitation of raw data].
2. The compensation offered to other MLS Participants.
3. The type of listing agreement, i.e., exclusive right to sell or exclusive agency.
4. The seller(s) and occupant(s) name(s), phone number(s) and email address(es) where available.
5. Instructions or remarks intended for cooperating brokers only, including but not limited to showing instructions or security references (ex: lock box, burglar alarm or security system, vacancies) regarding the listed property.
6. Any other information that goes beyond a description of the property.12.19.6 Advertising vs. Contact Information. No advertising may be visible on a page displaying any portion of the listings of other Participants except that the name, company logo and contact information of the Participant operating the VOW and/or the name, company logo and contact information of the non-principal broker or sales licenseeoperating the VOW, and any other information required by California law or regulation may not be prohibited.12.19.7 Modification. MLS data fields authorized for display may not be changed. MLS data may be augmented with additional data not otherwise prohibited from display provided the source of any additional data is clearly identified. This rule does not restrict the format of MLS data display or display of fewer than all of the listings or fewer authorized data fields.12.19.8 Notice and Disclaimers. Display of MLS data must include a notice indicating that the data is deemed reliable but is not guaranteed accurate by the MLS. Participants' andsubscribers’ VOWs may include other appropriate disclaimers necessary to protect the participant, subscriber and/or the MLS from liability.12.19.9 Identity of Listing Broker and Agent. All listingsdisplayed on VOWs shall identify the name of the listing firm and the name of the listing agent in a manner designed to easily identify such listing firm and agent. 12.19.10 Viewable Number of Listings. Registrants may view, retrieve or download not more than ______ (insert number that will be the same as the number in 12.15.1) active listings in response to any inquiry.12.19.11 Source of Other Listing Data. Participants and subscribers displaying other brokers' listings obtained from sources other than this MLS (e.g. from other MLSs, from non-Participant brokers, etc.) shall display the source from which each such listing was obtained.12.19.12 Password Validity Period. Registrants' passwords may be valid no longer than 180 days, after which such passwords must be reconfirmed or changed. 12.19.13 Right to Charge forDownload. The MLS has the right to charge the costs of adding or enhancing its downloading capacity to participants and subscribers who request downloading of listing information pursuant to Section 12.19.…(2) The VOW-oriented revision in Rule 12.15.5 regarding the “in conjunction with work product” additional requirement for reproducing MLS information for appraisals/CMAs warrants a brief separate discussion. For your convenience, the proposed revision to Rule 12.15.5 is set forth once again below:12.15.5 Sold Information. Individuals legitimately in possession of current listing information, “sold”information, “comparables” or statistical information may utilize such information to support an estimate of value on a particular property for a particular client. However, only such information that the MLS has deemed to be nonconfidential, and necessary to support the estimate of valueand used in conjunction with work product (i.e. more than a mere recitation of raw data)may be reproduced and attached to the report as supporting documentation. Any other use of such information is unauthorized and prohibited by these rules and regulations.As you may recall, this additional restriction was originally addedby C.A.R. due to concerns over the potential proliferation of “internet data dumps” of raw sold data. The C.A.R. MLS Committee believed that internet reproduction of this data should be combined with some sort of work product, and in order to accomplish this in the VOW framework, an equal restriction had to be put in place in the non-VOW framework of the MLS rules (i.e. the VOW parity requirement). The “work product” language set forth in 12.15.5 above was the way in which this “parity” component played out in the non-VOW rules. The question now is that, even with the removal of the remainder of the VOW policy, do you like this additional requirement and want it to remain in the C.A.R. Model MLS Rules?
…Proposed Motion: (If approved by the MLS Committee)(1) That C.A.R. Model MLS Rules be revised torevoke the VOW policy in its entirety as set forth in these papers.OR(2) That C.A.R. Model MLS Rules be revised to revoke the entire VOW policy as set forth in these papers with the exception of the “work product” revision set forth in Rule 12.15.5.