As you all are aware, the National Association of REALTORS® (NAR) reached a settlement with the plaintiffs in a lawsuit on March 15, 2024. This settlement necessitates several practice, policy, and rule changes for the VMLS, which must be implemented no later than August 17, 2024.

The VMLS Board of Directors has updated its Bylaws and Rules and Regulations to comply with these new requirements. Additionally, the settlement requires the VMLS to remove all compensation fields from the MLS. VMLS has collaborated with its vendor, FlexMLS, to facilitate this removal. As of July 24, 2024, all compensation fields will be removed from the MLS. This means compensation fields will not be available on any current listings, regardless of status, nor for data entry on any new listings after July 24th.

There is no action if you have a listing in the VMLS Flex system, this removal will take place automatically.

The new Bylaws and Rules and Regulations are linked in this email and will be effective upon publication. This email also contains a summary of all the changes to the MLS rules. NAR has provided a comprehensive FAQ and other resources at facts.realtor. The Division of Real Estate has updated several forms to ensure compliance with the settlement. These contracts are now available and must be used as of August 17th. For questions specific to the new contracts or individual practices, please consult your Managing Broker or legal counsel.

UPDATED VMLS BYLAWS & RULES

New VMLS Bylaws - July 2024

Click below for updated VMLS Bylaws and Rules & Regulations. A full description of changes is also below in this email.

Rules and Bylaws can also be found at VBR.net under "VMLS Tools & Resources" and "Bylaws & Policies"

DESCRIPTION OF CHANGES

It is important to understand the two main components of the settlement:

1. Prohibition of offers of compensation from the MLS or any service provided by MLS.

2. Written Buyer Agreements that clearly explain the cost of buyer representation.

For specific details, please refer to facts.realtor, which includes resources such as FAQs, videos, and a guide on Written Buyer Agreements 101.

The Rules & Regulations have undergone several changes, all of which are REQUIRED by the terms of the settlement, addressing the prohibition of offers of compensation in the MLS or services of the MLS and the requirement for Written Buyer Agreements. These changes are detailed in the order they appear in the document.

Definition of Seller Concessions added “Definitions”:

“Seller Concessions” means seller concessions other than payments to listing and buyer brokers. Seller concessions are payments by the seller to pay a portion of the buyers’ closing costs, which may include escrow and title fees, repair credits, loan points, or buyer brokerage fees. Seller Concessions may only be added after closing and is not a replacement to communicate payments to listing and buyer brokers.”

Section 1.1 had language removed and replaced with:

“The exclusive right-to-sell listing is the form of listing where the seller authorizes exclusive authorization to the listing broker to cooperate with other brokers in the sale of the property.

The exclusive agency listing also authorizes the listing broker as exclusive agent, to cooperate with other brokers in the sale of the property, but also reserves to the seller the general right to sell the property on an unlimited or restrictive basis.

Exclusive agency listings and exclusive right-to-sell listings with named prospects exempt should be clearly distinguished by a simple designation such as a code or symbol from exclusive right-to-sell listings with no named prospects exempt, since they can present special risks of procuring cause controversies and administrative problems not posed by exclusive right-to- sell listings with no named prospects exempt. Care should be exercised to ensure that different codes or symbols are used to denote exclusive agency and exclusive right-to-sell listings with prospect reservations.”

Section 4.7 No Filtering of Listing

“Participants and Subscribers must not filter out or restrict MLS listings that are communicated to customers or clients based on the existence or level of compensation offered to the cooperating broker or the name of a brokerage or agent.”

Section 5 Changes

“Deletion of a Section Title of “DIVISION OF COMMISSIONS”

“Section 5 to No Compensation Specified on MLS Listings and changing language to:

Participants, Subscribers, or their sellers may not make offers of compensation to buyer brokers and other buyer representatives in the MLS.

Use of MLS data or data feeds to directly or indirectly establish or maintain a platform to make offers of compensation from multiple brokers to buyer brokers or other buyer representatives is prohibited and must result in the MLS terminating that Participant’s access to any MLS data and data feeds.”

Addition of Section 5.0.0

“Disclosures of Compensation: MLS Participants and Subscribers must:

1. Disclose to prospective sellers and buyers that broker compensation is not set by law and is fully negotiable. This must be included in conspicuous language as part of any listing agreement, buyer written agreement, and pre-closing disclosure documents (if any).

2. Conspicuously disclose in writing to sellers, and obtain the seller’s authority, for any payments or offer of payment that the listing Participant or seller will make to another broker, agent, or other representative (e.g. real estate attorney) acting for buyers. This disclosure must include the amount or rate of any such payment and be made in writing in advance of any payment or agreement to pay.”

Addition of Section 5.0.1

“Section 5.0.1 Written Buyer Agreements

Unless inconsistent with state or federal law or regulation, all MLS Participants working with a buyer must enter into a written agreement with the buyer prior to touring a home. The written agreement must include:

a. a specific and conspicuous disclosure of the amount or rate of compensation the Participant will receive or how this amount will be determined, to the extent that the Participant will receive compensation from any source;

b. the amount of compensation in a manner that is objectively ascertainable and not open-ended.

c. a term that prohibits the Participant from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and

d. a conspicuous statement that broker fees and commissions are not set by law and are fully negotiable.”

Change of number of Section 5.0.1 to 5.0.2 – Short Sales and removal of paragraph referencing compensation.

Deletion of Sections: 5.3 Dual Rate and Variable Rate Commissions, 5.4 No Compensation for Fee Waived Salesperson, and 5.5 Display of Listing Brokers Compensation.

• Exhibit A updated to include Violations, Discipline and Fines have been updated to reflect new rules and policies.

• Exhibit D updated to include language prohibiting use of remarks-public or agent- or any fields in MLS to communication compensation.

• Broadcast email rules have been updated with prohibition of communicating compensation via the MLS provided Broadcast email system and the disciplinary action for violation of the rules.

VMLS Board of Directors also made a few other changes to the Rules & Regulations not related to the settlement. VMLS updated its rules relating to Clear Cooperation, specifically designating new construction/under construction homes as voluntary property submissions and not subject to Clear Cooperation Rules and the fines for violations have been lowered. The Lockbox rules have also been updated to be consistent with current technology.

The Bylaws and Rules & Regulations were both changed to include a new “Purpose” of the MLS and the definition of Participant by removing any reference to compensation. Both documents have been updated with the following language:

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 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.”

“Where the term REALTOR® is used in this explanation of policy in connection with the word member or the word Participant, it shall be construed to mean the REALTOR® principal or principals, of this or any other association, or a firm comprised of REALTOR® principals participating in a multiple listing service owned and operated by the board. Participatory rights shall be held by an individual principal broker unless determined by the association or MLS to be held by a firm. It shall not be construed to include individuals other than a principal or principals who are REALTOR® members of this or any other association, or who are legally entitled to participate without association membership. However, under no circumstances is any individual or firm, regardless of membership status, entitled to MLS membership or participation unless they hold a current, valid real estate broker’s license and cooperate, or are licensed or certified by an appropriate state regulatory agency to engage in the appraisal of real property. Cooperation is the obligation to share information on listed property and to make property available to other brokers for showing to prospective purchasers and tenants when it is in the best interests of their clients. Use of information developed by or published by an association multiple listing service is strictly limited to the activities authorized under a Participant’s licensure(s) or certification and unauthorized uses are prohibited.

Mere possession of a broker’s license is not sufficient to qualify for MLS participation. Rather, the requirement that an individual or firm cooperates means that the Participant actively endeavors during the operation of its real estate business to list real property of the type listed on the MLS, shares information on listed property, and makes property available to other brokers for showing to prospective purchasers and tenants when it is in the best interests of their clients, and to cooperate. “Actively” means on a continual and ongoing basis during the operation of the Participant’s real estate business. The “actively” requirement is not intended to preclude MLS participation by a Participant or potential Participant that operates a real estate business on a part-time, seasonal, or similarly time- limited basis or that has its business interrupted by periods of relative inactivity occasioned by market conditions.

Similarly, the requirement is not intended to deny MLS participation to a Participant or potential Participant who has not achieved a minimum number of transactions despite good faith efforts. Nor is it intended to permit an MLS to deny participation based on the level of service provided by the Participant or potential Participant as long as the level of service satisfies state law.

The key is that the Participant or potential Participant cooperates with respect to properties of the type that are listed on the MLS in which participation is sought.

Cooperation is the obligation to share information on listed property and to make property available to other brokers for showing to prospective purchasers and tenants when it is in the best interests of their client(s). This requirement does not permit an MLS to deny participation to a Participant or potential Participant that operates a “Virtual Office Website” (VOW) (including a VOW that the Participant uses to refer customers to other Participants) if the Participant or potential Participant actively endeavors to cooperate. An MLS may evaluate whether a Participant or potential Participant actively endeavors during the operation of its real estate business to cooperate only if the MLS has a reasonable basis to believe that the Participant or potential Participant is in fact not doing so. The membership requirement shall be applied in a nondiscriminatory manner to all Participants and potential Participants.”

Full copies of the Bylaws and Rules & Regulations can be found below.



VMLS and VBR understand these are significant changes, but changes that must be made to avoid further risk. Leadership is steadfast in its belief that REALTORS will adapt to the change and continue to support the consumer in their quest for the dream of homeownership.

MLS RULES & REGS