Neither fish nor fowl: Mobile technologies and IDX and VOW rules (Potential CMLS topic 3)

(Note: Shelley Specchio is CEO of the Northern Nevada Regional MLS, Inc., a host of the CMLS Conference in Lake Tahoe, September 30 – October 2. She and I have been discussing topics for the legal panel there. Shelley wants input and feedback from those likely to attend: Which legal topics are of greatest interest and what aspects of them are most important for MLSs? I agreed to do a series of blog posts on some of the candidate topics, cross-posting links to them in other forums and asking folks for their input. This is the third. If you have other topics to suggest, email me or comment on any of these posts.)

The question: To what extent can one broker distribute listing content relating to another broker’s listings via mobile apps? Unfortunately, the answer is not clear, because these distributions generally do not fall under the IDX or VOW policies.

Some companies are offering texting-based or mobile-phone-app-based access to listing information. (I call all these tools ‘mobile apps’.) This is old-hat on broker’s own listings – the listing broker puts up a sign rider with a phone number (or phone number and code), the consumer sees the sign, calls the number, and gets info. Or the consumer texts to the number to get info. But the explosion of mobile apps has raised other questions.

Two example products are VoicePad’s “MobileIDX” and SmarterAgent. VoicePad describes its “MobileIDX” product this way:

Now property buyers can access the entire local inventory from any telephone. VoicePad MobileIDX^TM delivers property information in high-quality sentence structure in both English and Spanish, by simply entering the street number, or MLS ID, of the home in which they have an interest. Unlike the wireless web or text messaging, MobileIDX works on every phone.

SmarterAgent describes its product this way:

Smarter Agent’s Homes for Sale allows homebuyers to view all available MLS listing information on homes for sale around them anytime, anywhere, from the convenience of their cell phone. They can locate properties by GPS, address, zip code, or city; see details including price, square footage, beds/baths, and taxes; map properties closest to them; even see pictures!

I’ve never used VoicePad, having only heard descriptions of how the product works. There is an audio demo and a video on the company’s site, but these demos emphasize the utility of the product to listing brokers. My understanding is (and the product’s name and marketing materials suggest) that MobileIDX also works this way: Broker A signs up with VoicePad, which assigns Broker A a phone number; Broker A advertises the phone number to the public, inviting them to call that number whenever they want information about properties they see. The consumer sees Broker B’s listing (driving by, on the web, it doesn’t matter as long as the consumer sees the street number or MLS number). The consumer calls Broker A’s VoicePad number; she enters the street number or MLS number, and VoicePad provides information about Broker B’s listing.

I have used SmarterAgent in its Philadelphia incarnation, available from the Prudential Fox & Roach web site. (The button on the left that says “Search & Receive Local Listings From your Cell” takes you to a setup page for the product.) In the case of my iPhone, I entered my cell number, clicked through an agreement, got a text message, downloaded the app, and ran it. After all that, I could begin searching the Philly inventory, either by entering criteria or by using my phone’s GPS location to find nearby properties. SmarterAgent’s app displayed the results to me with PF&R branding on it and in what seems like compliance with the Philly MLS’s IDX rules.

I think these tools, and many others like them, provide exciting possibilities for brokers to better serve consumers. (I really enjoyed using the SmarterAgent app.) But if they are not IDX and they are not VOWs, we probably have some work to ensure that innovation is permitted and supported while listing-broker and seller rights are not trampled.

What rules govern these uses?

What rules govern Broker A’s use of Broker’s B’s listings in mobile apps like SmarterAgent and VoicePad? Well, that’s not entirely clear. I think that probably neither of these applications qualifies as an IDX site or a VOW. (Note the “probably” – some MLSs have interpreted their IDX or VOW rules as specifically permitting these applications – given the arguments on both sides, I don’t think that’s unreasonable.) The NAR model rules define IDX in Section 18 as:

IDX affords MLS participants the option of authorizing display of their active listings on other participants’ Internet websites.

(NAR, Handbook on Multiple Listing Policy, 2009 ed. Emphasis is mine. Link is to password-access site.) NAR’s model rules define VOWs in Section 19.1(a) as:

A “Virtual Office Website” (VOW) is a participant’s Internet website, or a feature of a participant’s website…

(Ibid. Again my emphasis.) Neither of the example products is a “web site” and so I would argue neither is IDX or VOW. IDX is consent-based, meaning it is permitted because listing brokers consent to it. Any use of the listing data beyond what that consent permits is not IDX and is not permitted under the IDX rules. VOWs are permitted subject to the VOW policy and rules, and any use that goes beyond what those rules allow is not consistent with the rules. Both sets of rules expressly refer only to “web sites” and not to any other technology.

One could argue, and some have reasonably I think, that these applications are sufficiently analogous to web sites to be considered web sites for purposes of the IDX and VOW policies. Another fact surely strengthens the analogy argument: it is possible to view web sites through mobile phones, and in those cases, the sites are probably just IDX sites or VOWs. How does the “app-ness” of our example applications change the analysis? We could spend a whole series of posts debating that; the only consensus we would reach is that we can reach no consensus. (Thus my suggestion below that we address this issue head-on.)

Assuming that the example apps are neither IDX nor VOWs, what rules govern them? Again, we look to the NAR model rules, where Section 12 governs display and reproduction of MLS listing data generally. Section 12.1 provides:

Participants and those persons affiliated as licensees with such participants shall be permitted to display the MLS compilation to 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.

(Ibid. Again my emphasis.) That does not permit willy-nilly display of other brokers’ listings (which would just be advertising). Section 12.2 of the model rules provides:

Participants or their affiliated licensees may reproduce from the MLS compilation and distribute to prospective purchasers a reasonable* number of single copies of property listing data contained in the MLS compilation which relate to any properties in which the prospective purchasers are or may, in the judgment of the participants or their affiliated licensees, be interested.

*It is intended that the participant be permitted to provide prospective purchasers with listing data relating to properties which the prospective purchaser has a bona fide interest in purchasing or in which the participant is seeking to promote interest. The term reasonable, as used herein, should therefore be construed to permit only limited reproduction of property listing data intended to facilitate the prospective purchaser’s decision-making process in the consideration of a purchase. Factors which shall be considered in deciding whether the reproductions made are consistent with this intent and thus reasonable in number, shall include, but are not limited to, the total number of listings in the MLS compilation, how closely the types of properties contained in such listings accord with the prospective purchaser’s expressed desires and ability to purchase, whether the reproductions were made on a selective basis, and whether the type of properties contained in the property listing data is consistent with a normal itinerary of properties which would be shown to the prospective purchaser.

(Ibid. Again my emphasis. Actually, the model rules provide MLSs three options for Section 12.2, but most MLSs choose option 1 or option 2, and the language quoted here appears in both those options.)

In light of Section 12, why did we need a VOW policy? Well, the main reason is that some listing brokers believed that the medium other brokers used to display the listing brokers’ listings was something over which they should have control: “Sure, you can fax my listing to your buyer, but you can’t make it searchable to your clients on your web site.” The VOW policy does two things: (1) it expressly permits virtual office web sites, laying to rest that question; and (2) it imposes rules on virtual office web sites intended to address the special risks associated with distributing listing data via automated means. In other words, Rule 12 was fine when we dealt with faxes and printouts from MLS, but automated listing distribution poses risks of ‘scraping’ etc. that were not present in traditional distributions. Consequently, automated distributions deserve specific rules to address those risks without discouraging the use of the technology.

The problem now is that there is now clarity about how MLSs should treat these products; a product embraced by one MLS might be shunned by another; brokers in one market might enjoy the use of it while brokers in another are not permitted to try it.

Solutions?

I think it makes sense to adopt a solution to this issue now, rather than waiting for confusion and maybe another lawsuit. And I’d suggest adapting the solution to the rules we already have. Here’s one way of approaching it:

If a broker wants to display another broker’s listings to a consumer by any “automated means,” the displaying broker gets two choices:

1. If the displaying broker had no brokerage relationship with the consumer, the display would have to satisfy the IDX rule requirements. (For example, listings of brokers who opt out of IDX could not be displayed, displays would satisfy MLS disclosure requirements and requirements that listing brokers/agents be identified, if they occur in IDX.)
2. If the displaying broker had a brokerage relationship with the consumer, established either face-to-face or via the means identified in the VOW rules, then the display could take place under the VOW rule requirements. (For example, the app would have ID and password – or other means of confirming identity – respect for seller wishes regarding “internet” display, AVMs, and third-party commentary, etc.)

No other automated display of another broker’s listing would permitted.

The change could be achieved by changing references in the existing VOW and IDX policies from “Internet Web site” to “automated means of distribution” (after carefully defining this term) and making a number of other tweaks. The problem for NAR and the MLSs affiliated with it is that they cannot change the VOW policy without DoJ approval, and I’m guessing that NAR would rather not reopen discussions with DoJ on this topic so soon. I suppose an MLS or group of MLSs could approach NAR and DoJ and propose language that would do the trick – not sure how that would work out. Another alternative would be for NAR to adopt a separate policy regarding distributions by “automated means” excluding VOWs, but have it closely parallel the VOW policy.

If your MLS is not affiliated with NAR (i.e., is broker-owned and operated), there is really no problem here. We have drafted rules for broker-owned MLSs that permit all “automated means” under largely the same terms as VOWs. This ensures that listing broker and MLS concerns are addressed but that new technologies are expressly permitted by MLS.

What do you think? Is this an important issue? Are there better options than the one I’ve described here? Are there other technologies that raise similar issues?

-Brian