Elizabeth has begun a series of posts about copyrights in MLS content. I believe another in that series is coming out tomorrow.

With this post, I want to point out another basis of rights in listing data: the right of listing brokers to control the use of content relating to their listings under NAR policy.

The NAR policy

If your MLS is affiliated with NAR and subject to NAR policy, it is bound by NAR Statement of MLS Policy 7.85:

Use of listings and listing information by MLSs for purposes other than the defined purposes of MLS requires participants’ consent. Such consent cannot be required as a condition of obtaining or maintaining MLS participatory rights. MLSs may presume such consent provided that listing brokers are given adequate prior notice of any intended use unrelated to the defined purpose of MLS, and given the opportunity to affirmatively withhold consent for that use.


(See NAR Handbook on Multiple Listing Policy [HMLP], 2010 ed., p. 28.) HMLP defines the MLS this way:

A multiple listing service is:

• a facility for the orderly correlation and dissemination of listing information so participants may better serve their clients and customers and the public

• a means by which authorized participants make blanket unilateral offers of compensation to other participants (acting as subagents, buyer agents, or in other agency or nonagency capacities defined by law)

• a means of enhancing cooperation among participants

• a means by which information is accumulated and disseminated to enable authorized participants to prepare appraisals, analyses, and other valuations of real property for bona fide clients and customers

• a means by which participants engaging in real estate appraisal contribute to common databases (Revised 11/04)


(See HMLP p. 3.) Note that I have underlined “participant” in each bullet point. That is to make the point that the ‘defined purpose’ of MLS is to provide MLS listing content to participants, not to the public or other business entities. Any distribution of listing content by MLS to anyone but participants (and their affiliated salespeople/subscribers) requires listing broker consent, unless it is specifically permitted under another NAR policy. Let’s consider some of the ways MLS data is licensed:

  • MLS sends data to Realtor.com, Zillow, Trulia, etc.; the listing broker must be able to opt out, as advertising of listings is not a core purpose of the MLS. (See HMLP Statement 7.57, p. 12, which makes this crystal clear: “An MLS may not require a participant to use, participate in, or pay for … advertising or access to advertising (whether print or electronic), including classified advertising, homes-type publications, electronic compilations, including Internet home pages or websites, etc.”)

  • MLS operates a consumer-facing website with listings on it; the listing broker must be able to opt out. Same analysis as the previous point.

  • IDX; the listing broker must be able to opt out, as the IDX policy provides for it.

  • VOW; the listing broker has no ability to opt out, as the VOW policy expressly precludes a listing-broker opt-out.

  • MLS provides listing data to a third party that uses it only to deliver technology services to that MLS’s participants and subscribers; the listing broker cannot opt out, as the third party has access only for the purpose of delivering services to participants. For example, if an MLS hires an MLS vendor to deliver services to its members, listing brokers do not get to opt out. I’m not sure the policy actually says this, but it must be implied, or most MLSs would stop working very well 😉

  • MLS provides listing data to a third party that will expose the listing data to consumers or third parties or will create products based upon the listing data for consumers or third parties; the listing broker must be able to opt out. This is the situation for MLSs considering licensing to First American or RPR under the proposals now circulating.

  • MLS provides listing data to government agencies; listing broker has no ability to opt out. Like the policy on VOWs, this is an exception to the general rule. (See HMLP Statement 7.3, p.21.)

Mechanics of broker consent

As long as the MLS provides listing brokers “prior notice” of the intended license, and the listing brokers have an opportunity to withhold their consent, the MLS may license the data for the specified use. In practice, many MLSs provide brokers a means of consenting or withholding consent electronically. This is the basis for listing syndication services, which usually offer the listing broker a “dashboard” where she can specify which “channels” will receive her listings. Some MLSs also have screens or fields on the MLS system where brokers can opt out of IDX or display on Realtor.com, etc.

One question MLSs must address is whether a data use will be “opt-in” or “opt-out” for brokers. In other words, will the MLS send a broker’s data only if she affirmatively consents (an opt-in system); or will it send her data unless she withholds consent (an opt-out system). NAR policy permits either approach in most cases.

An opt-in use defaults to no consent; an opt-out use defaults to consent. As a practical matter, most brokers will not pay attention to MLS communications. Thus, the default consent situation will be the de facto consent situation for a large percentage of listings. Consequently, opt-out data uses tend to provide much more data than opt-in uses.

Our advice to MLS clients is to make a licensed use an opt-out use if the leadership believes the use is strategically important to the MLS – this will ensure that most listings are included. If the MLS is uncertain, or if the proposed data use is controversial, the MLS can make the data use an opt-in. Then the MLS will include in the data use only the data of brokers who have affirmatively decided to support the data use.

Broker Consent and the RPR License Agreement

The RPR MLS license agreement is disappointing in that it does not address the broker consent issue. Section 2(a) of the agreement provides that MLS “grants to RPR during the term a limited, revocable, non-exclusive, non-transferable License to access and use the Licensed Content.” Section 1(j) defines “Licensed Content”:

“Licensed Content” means the Content contained in the Database that is to be provided or made available to RPR pursuant to this Agreement, including Active Listings, Pending Sales, Off-Market Listings and Participant/Subscriber Roster Information.

Section 1(e) defines “Content”:

“Content” means all information provided by Participants/Subscribers including, but not limited to, information relating to the offer, sale, lease or transfer of any interest in real property, including Active Listings, Pending Sales, Off Market Listings, text, images, maps, audio, video, software and other informational content and data, MLS Participant/Subscriber Roster Information and any compilation, collection or combination of any of the foregoing. (Emphasis is mine.)

 

The MLS promises RPR that it has authority to provide this license in Section 9(d): “Authority. Each Party warrants that it has full power and authority to enter into and perform this Agreement….”

There is no carve-out from these provisions for MLS to withhold data where the listing broker has not consented. In a comment on an earlier post, RPR President Marty Frame said that “Broker consent is assumed in the paragraph on Authority [presumably 9(d)].” That’s not the way I read these paragraphs.

MLS options

Usually when we do a license agreement for an MLS licensing data for a non-core purpose, we include a provision that clarifies that some listing data will not be included if the listing broker must consent under MLS policy and the listing broker does not consent. I would suggest that any MLS entering an agreement to license data for non-core purposes (including RPR and First American) add such language to the agreement.

The MLS has to make another decision though, and that is whether to make licensing into such a use an opt-in or opt-out for listing brokers. If your MLS/association is uncertain about the value of the relationship, or if your listing brokers are anxious about the possibility of their data being commercialized, you could choose to make these data uses an opt-in. Note however that such a decision probably makes your MLS’s data much less valuable (because the licensee will be getting much less of it).

Your thoughts?

-Brian

Reader Interactions

Comments

  1. As you said, the RPR license agreement did not address what would happen if there was an opt-in or opt-out scenario. If they only received a portion of the listings data, would the MLS receive public records data? I'm looking forward to the next version of the contract and am hoping it addresses all of the issues brought up by all the reviewing parties.

  2. Matt, I thought any Realtor with a NRDS number would have access to the RPR Public Record database regardless if their MLS signed the agreement. Additionally, would listing agreements need to have a consent from the actual property sellers allowing their information to be used for making a profit? They may not care or they may want to be compensated.

  3. @Anonymous – You are correct in terms of access to the RPR system, but I was referring to the MLS receiving 'free' public records for tasks like auto-populating listing fields and for use in MLS reports.

    I noted the seller's consent question in reply to an earlier blog post – use of the data for purposes other than marketing the home may go beyond the seller's

  4. I'm not sure how the 'free' public records from RPR will be integrated in MLSs and whether they really can replace PRD the MLSs are getting from other sources. Matt, you and Kevin McQueen have a better grasp of the likely gap analysis between LPS data and other sources, including First American, the MLS's own efforts in some markets, and other providers. I also believe that

  5. Thanks for asking, Brian. As you might expect, this has been a popular topic of conversation around the Privacy Solutions office.

    I agree with Matt that use of the data may go beyond the expectations of the seller particularly when considering informational privacy.

    In addition to the seller’s information, we are quite interested in learning about RPR’s proposed use of

  6. I have a related question, though this post is 7 years old, so I hope the author see it and responds.

    Does publishing opt in/out consent from the Participant/Broker automatically flow to the Agents of that Broker, who are in almost all cases, doing the actual add/edit of the listing?

    If not, can simple notification to the Broker be given and, if Broker Participants fail to object, then Listing Agents can control distribution of listing at add/edit by opt in/out to their preferred publishing destinations for that particular listing?

    Our MLS Committee was advised that, because of Rule 7.85, we have to remove all opt in/out choices from Agents and move everything to a Broker backend dashboard not accessible to Agents. Further, this would mean there is no “per listing” choice, it’s either “all listings in” or “all listings out” for all listings under that Broker, regardless of what the client and listing agent want.

    This seems absurd to me, yet the Committee passed it.

    There are a lot of business reasons a Listing Agent may not want the Broker’s default treatment to apply to a client’s listing. At present, Listing Agents in our MLS can opt in to select Realtor.com, our local public facing consumer portal, “Syndication” (controlled in Broker back end, but agent must opt in per listing), a statewide consumer portal, or “None”.

    Any thughts o insight appreciated.

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