Tag Archives: Legal Issues

Association, MLS, RPAC: An Idea for Political Domination

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Tywin Lannister, Chair of Casterly Rock Association of REALTORS

File this one under: “There Is No Box” kind of thinking. The reason why this isn’t a Black Paper (yet) is that I haven’t checked with enough lawyers to see all of the possible pitfalls, but that might happen sooner rather than later.

A couple of weeks ago, I mentioned that I was having an email exchange with a couple of lawyers from NAR’s Legal team that was sending electric tingles of excitement down my legs. The reason is that so far, on a preliminary basis, while requiring further research, and a dozen other caveats — very typical for smart lawyers, since one never knows for sure until the Supreme Court rules, and even then, things can be overturned and so on and so forth — it appears that it’s possible to….

Okay, just in case you haven’t had enough of the caveats and maybes and warnings, let’s say that you should check with your own legal counsel in your state. But here’s the rough outline.

It appears that it is perfectly legal under federal law for the Association of REALTORS to transfer its ownership in the MLS to the PAC. The result would be total domination at the local and probably state levels in terms of political contributions.

Say what? Let’s delve in.

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The Realcomp Anti-Trust Ruling Will Affect MLS Syndication

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Inman News reports that the Sixth Circuit Court of Appeals has ruled against Realcomp II in a years-long case:

Michigan’s largest multiple listing service “unreasonably restrained competition” among real estate brokers by refusing to transmit exclusive agency property listings favored by discount brokers to Realtor.com and other public-facing Web sites, a federal appeals court has ruled.

At issue was whether Realcomp’s refusal to transmit Exclusive Agency listings to places like Realtor.com was anti-competitive. Since Realcomp’s policy only applies to a tiny fraction of listings in the market, Laurie Janik, the outgoing General Counsel of NAR, suggested this wasn’t that big a deal:

NAR General Counsel Laurie Janik said that because other MLSs don’t have similar rules in place, the appeals court ruling is unlikely to have a wider impact. “I’m sure it’s extremely disappointing news to the folks at Realcomp, but it’s not the kind of case that’s going to send ripples across the rest of the industry,”

That’s especially true since the NAR’s MLS Policy prohibits the MLS from excluding Exclusive Agency listings from feeds, as Realcomp had done.

Nonetheless, I respectfully disagree with Ms. Janik. I think this ruling will send ripples across the rest of the industry. At the very least, it should since the next case that comes down the pike will surely look at Realcomp II, Ltd. v. FTC as precedent.

(By the way, for the non-lawyer folks, this case is especially significant because it came from the Sixth Circuit Court of Appeals. The only higher court is the Supreme Court. At least within the Sixth Circuit, which covers Kentucky, Michigan, Ohio and Tennessee, this ruling is binding. And throughout the country, the ruling will be extremely persuasive.)

Before we dive into why I think this ruling is significant, since I am doing law-blogging here, I have to say that this is in no way a legal opinion (I mean, c’mon, it’s a blog post) and that you should consult your own qualified legal counsel.

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Why You Should Know About Aereo

I’m reasonably certain that 90%+ of my audience — that would be you — have no idea what Aereo is. And until recently, there was no real reason to know, unless you lived in the NYC area and just looooved over-the-air TV.

But last Friday, the US Supreme Court chose to hear a case involving this odd little startup, ABC, Inc. vs. Aereo, Inc., and that could have immense implications for intellectual property law. I think there could be direct relevance to real estate given the industry’s recent and ongoing fights over who owns what and how. Nothing may come of it, but Supreme Court cases rarely result in nothing, so those of you in this arena might want to check out Aereo, what’s going on, and get your lawyers involved.

FYI, I haven’t followed the case that carefully, so I’d love to hear from the legal eagles in our business (Brian? Mitch?)

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Quick Addendum: Can You Use a Form Other Than What Is Provided by the MLS?

A quick addendum (you’ll get the joke soon) to my post yesterday….

From the comments, a little discussion erupted because MRED — the Chicagoland area’s regional MLS — instituted a new rule about putting listings into the MLS, unless the seller opts-out. And then MRED provided a form: Seller Listing Exemption Addendum-1. Click through if you want to read it.

Anyhow, my quick addendum/question is this:

Can you use your own form that accomplishes the same thing, or must you use the form provided by the MLS?

In the MRED form, for example, Clauses 1-3 read as follows:

1. MULTIPLE LISTING SERVICE: Broker is a participant/customer to MRED’s multiple listing service (“MLS”), the most modern, efficient, complete and up-to-date database of properties for sale that is disseminated to and accessible by all other real estate agents who are participants/customers to the MLS or a reciprocal MLS. MRED’s purpose is to support its participants with bringing together buyers and sellers through the cooperative efforts of nearly 40,000 real estate professionals, resulting in quick, efficient and well-managed sales, providing the greatest convenience to sellers and buyers.

2. MANDATORY SUBMISSION TO MLS: The MLS generally requires brokers participating in the service to submit all exclusive right to sell, exclusive right to lease, and exclusive agency listings for residential real property to the MLS within 72 hours of obtaining all necessary signatures of the seller(s) on the listing agreement unless Broker submits to the MLS this Seller’s Listing Exemption Addendum signed by Seller excluding the listing from the MLS.

3. EXPOSURE TO BUYERS THROUGH MLS: Listing property with the MLS exposes a seller’s property to all real estate brokers and managing brokers who are participants/customers of the MLS or any reciprocating MLSs, and potential buyer clients of those brokers and managing brokers. The MLS may further transmit the MLS database to internet sites or apps that post property listings online. Cooperation amongst brokers from an expansive variety of brokerage firms creates greater efficiency among MRED participants and a seller’s opportunities for identifying a qualified buyer are significantly greater when a listing is filed with the MLS.

As a former lawyer-larvae type person, I read those clauses and they’re simply disclosures. There’s no real legal effect. The real action is in #9 and #10, which read:

9. FAIR HOUSING: Seller’s decision to exclude Seller’s Property from the MRED MLS database is based upon reasons other than a refusal or reluctance on Seller’s part to show, list, negotiate or sell Seller’s Property to an individual on the basis of one’s membership in a protected class, e.g.: race, color, religion, national origin, sex, ancestry, age, marital status, physical or mental handicap, familial status or any other class protected by Article 3 of the Illinois Human Rights Act. Seller acknowledges that they shall also be bound by the provisions of state and local (city and/or county) human rights or fair housing ordinances (if any) and agree to comply with same.

10. SELLER OPT-OUT: Seller certifies that Seller understands the implications of not submitting Property to MRED’s MLS database and instructs Broker as follows (Check only one):

A. Do not submit Property to the MLS for a period of _____ calendar days from the commencement of the listing.

B. Do not submit Property to the MLS until ____________ (date).

C. Do not submit Property to the MLS during the entire listing provided for in the Agreement.

I figure those two clauses cover MRED from any liability that might arise from pocket listings.

On the one hand, some buyer who claims that MRED enabled Fair Housing violations by allowing sellers to put listings into private off-MLS listings doesn’t have much of a claim if MRED has a form from the seller agreeing that he’s not motivated by any Fair Housing issues when he instructs the agent to keep the listing off the MLS.

On the other hand, #10 protects MRED if some seller gets pissed off that his house was sold off-MLS and for less than he thought he should have gotten. You signed off on it, pal. Reap what ye have sown, etc.

So… issues 1-8 are really between the listing agent/broker and the seller. MRED’s form might protect the member broker/agent from future lawsuits with all those disclosures, but that’s the agent/broker’s problem, not MRED’s (as far as I can tell).

Ergo, my questions:

Could a broker or agent hire his own lawyer to draft a form that accomplishes what MRED needs here (protection from civil liability), but re-words clauses 1-9, or discloses whatever he wants to disclose (or not), and use that form instead? Yes, said broker might open himself up to liability for failing to disclose something important in 1-8, but that’s his choice….

Or must the broker or agent use MRED’s form?

If the answer is he has to use MRED’s form… (a) where is that requirement located?, and (b) why?

-rsh

Quick Update: Maybe We’ll See Clarity on Employer Liability for Social Media

This is a quick note.

I found something recently that bears directly on my post on Employer Liability for Employee Social Media, and I’m somewhat hopeful that we’ll see more clarity on this topic.

Michael Yon is an independent journalist who reports from Iraq, Afghanistan, and other parts of the world where the U.S. military (and its allies) are fighting.  I happen to love his work, and believe it points to the future of journalism, but that’s a different story.

He recently posted a report on Facebook about two soldiers who were killed by Taliban attacks.  That in and of itself is not unusual. He does this all the time, doing the job that the national media rarely does.

What is unusual is that in the comments to this report on Facebook, a Mike Garcia attacked Yon for releasing the names of the soldiers before the DoD got around to it.  Scroll down in Michael’s fan page to find this thread, as I couldn’t find a way to link directly to his post and to the comments.

Turns out that Yon had followed all guidelines, directives, and had cleared the release with Army commanders on the ground in Afghanistan.  What followed is where things get interesting for us.

We see that Mike Garcia says that the FB comment is is personal opinion, that he is not representing the US Army or speak in any official capacity, even though he is a Public Affairs Officer.

Michael Yon is having none of it.  He believes that the fact that Mike Garcia is a Public Affairs Officer of the US Army means that he represents the Army even on a Facebook comment.  Which means that Yon believes he can now sue the Army for defamation and libel.

Now while it’s highly unlikely that Yon would actually sue the Army for defamation, I sorta hope he would so we’d get a case directly on point as to when the employer is and is not responsible for the social media actions of an employee, and what the relevant factors might be.  In this case, Major Garcia is a Public Affairs Officer — something close to a PR person — and posting on Facebook is likely in the sphere of his employment.  Respondeat superior ought to follow.

But at a minimum, we might see the Army promulgate specific directives clarifying when a soldier (an employee of the Army) is and is not speaking for the Army when engaging in social media.  That would be helpful for additional clarity.

-rsh