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