Comments regarding optional provisions of VOW rules II – “VOW Only Options”

As MLS boards of directors consider which optional VOW rules to adopt, here are our thoughts on them.

There are two groups of optional rules (references here are to the model VOW rules published on NAR’s site). The first group, Sections 19.15 – 19.19, consists of rules that MLSs may impose on VOWs, but if it imposes them on VOWs, it must also impose them on all other disclosures of listing information by brokers to consumers, even oral disclosure. We call these “Parity Options,” because if adopted, they impose parity on traditional and VOW disclosures of data. The second group, consisting of Sections 19.20-19.25, provides options that MLSs may adopt that apply only to VOWs. We call these “VOW Only Options.” We addressed Parity Options in a previous post and are addressing VOW Only Options in this post.

Here then are the VOW Only Options.

Password expiration

Section 19.20: A Participant shall require that Registrants’ passwords be reconfirmed or changed every ___ days.

(Note: The number of days passwords remain valid before being changed or reconfirmed must be specified by the MLS in the context of this rule and cannot be shorter than 90 days. Participants may, at their option, require Registrants to reconfirm or change passwords more frequently.)

(See Section IV.2 of the VOW Policy for the foundation of this rule.) Generally, password expiration policies provide some small assistance in maintaining system security. They do not constitute a major impediment to data pirates, however. And as this rule requires only a reconfirmation, it does not offer even the meager security benefits that a password change requirement would. We see no major factors that speak for adopting this provision.

Advertising and co-branding

Section 19.21: A Participant may display advertising and the identification of other entities (“co-branding’) on any VOW the Participant operates or that is operated on his or her behalf. However, a Participant may not display on any such VOW deceptive or misleading advertising or co-branding. For purposes of this Section, co-branding will be presumed not to be deceptive or misleading if the Participant’s logo and contact information (or that of at least one Participant, in the case of a VOW established and operated on behalf of more than one Participant) is displayed in immediate conjunction with that of every other party, and the logo and contact information of all Participants displayed on the VOW is as large as the logo of the AVP and larger than that of any third party.

We’re a bit perplexed that NAR has classified this provision as optional. The VOW Policy provides the following requirement in Section III.7: “An MLS may not prohibit or regulate display of advertising or the identification of entities on VOWs (“branding” or “co-branding”), except to prohibit deceptive or misleading advertising or co-branding.” Section III.7 of the Policy goes on to provide for the same “safe-harbor” that Section 19.21 of the model rules does. In other words, it seems MLSs are bound by this provision whether they adopt it or not. If that is true, we recommend that MLSs adopt this provision just for the sake of clarity. I’m interested whether folks have other views, though.

Identifying listings from other sources

Section 19.22: A Participant shall cause any listing displayed on his or her VOW that is obtained from other sources, including from another MLS or from a broker not participating in the MLS, to identify the source of the listing.

(See Section IV.2 and Section IV.3 of the VOW Policy for the foundation of this rule.) This provision may prove helpful on a couple of fronts. First, if several different MLSs provide data that appears on a broker’s VOW, it may be helpful to identify the source of each listing. This is especially true if the MLSs overlap; showing sources will help consumers understand when the same listing appears twice. It will also be useful if the MLSs have different disclosure and notice requirements. The broker displaying listings from multiple sources can identify the source of each listing next to the listing on the page and then “key” notices and disclosures at the bottom of the page to each source.

I’m not aware of any other basis upon which this provision would be dramatically useful. I’m interested if you have other views.

Searching listings from other sources

Section 19.23: A Participant shall cause any listing displayed on his or her VOW obtained from other sources, including from another MLS or from a broker not participating in the MLS, to be searched separately from listings in the MLS.

(See Section IV.3 of the VOW Policy for the foundation of this rule.) This kind of rule provides a lot of grief for brokers and consumers attempting to use a web site. Assuming that a brokerage office participates in two MLSs, if the consumer asks to search listings in Middletown (roughly half way between the two MLSs), the broker’s site must either choose arbitrarily which MLS the consumer will search, or it must ask the consumer to choose. Consumers have no sense of the boundaries of MLSs (and really should need to be concerned about that issue). There are numerous workarounds for this problem (developed over many years in the IDX context); but it is a hassle nonetheless. I have yet to hear even a moderately compelling rationale for this approach. But I’m open to ideas if you want to share.

License agreement

Section 19.24: Participants and the AVPs operating VOWs on their behalf must execute the license agreement required by the MLS.

(See Section III.10.g of the VOW Policy for the foundation of this rule.) We think this is a no-brainer; adopt it. We recommend that MLSs always make access to MLS data subject to a written agreement. I have posted elsewhere on what the agreement should look like.

Copies of documentation to MLS

Section 19.25: Where a seller affirmatively directs their listing broker to withhold either the seller’s listing or the address of the seller’s listing from display on the Internet, a copy of the seller’s affirmative direction shall be provided to the MLS within 48 hours.

(I think Section II.5.a-b of the VOW Policy provides the foundation of this rule.) One client pointed out to us that the model rule says “shall be provided to the MLS within 48 hours,” but it doesn’t indicate within 48 hours of what. (I’d say that was bad drafting if I hadn’t missed it myself.) Because the only other event referred to in the section is the seller’s giving of the “affirmative direction,” I’d say that starts the 48-hour clock ticking. In other words, the listing broker must provide a copy each and every written instruction from the seller to the MLS, which would then presumably file them and retain them. I’m not sure why an MLS would want copies of these documents unless it was auditing brokers or investigating a complaint. But Sections 19.6(b) and (c) of the NAR model rules already require that the listing broker obtain and retain the seller’s written instructions on this matter. Our view has always been that MLSs can demand copies of such documentation from the listing broker in cases where the MLS is auditing broker performance or investigating a complaint and that brokers must provide the requested documentation promptly.

If your MLS is one of the few that requires every broker to provide a copy of every listing agreement to the MLS, then you are already handling the filing, etc.; adding this rule might make sense. For everyone else, we’d skip it, unless someone can offer a justification for including it.

So – there are the options under the VOW policy. What do you think?