Breaking Down the Rules: Brokers and MLS Data (LEAP Part 3)

Detailed conversations are ongoing about broker data access in the MLS. They’re focused on the proposed Listing Exchange and Access Policy (LEAP). For background see:

This is LEAP Part 3, Breaking Down the Rules. This is where we dig in to the hard work.

Warning: This is not intended to be easy reading. It’s complex. It’s in the weeds. It’s necessarily process-intensive because that’s what will be required to overhaul the industry’s primary data distribution model.

The Problem (a reminder): Brokers are forced through a labyrinth of policy and rules to get approval, access, and usage rights for MLS data. Broker innovation stagnates and technology can’t scale efficiently across markets in this environment.

The Landscape: Data flows from MLS to broker through this path (see Part 1 for visual of complexity):

  • MLS data production
  • National Policy/Rules Application
  • Local Policy/Rules Application
  • Local License Agreement

The Goal: Push as many rules of data access and usage upward to a national level to create a simpler process for brokers and a more consistent compliance framework for MLSs.

The Notorious Clause: There is a proposed clause in the current LEAP draft that has garnered much attention: “MLSs may not impose any limitations, restrictions or conditions on the use or display of the MLS listing content other than as specified in this policy.”

The clause aligns philosophically with the aforementioned goal: consistency and certainty in national rules. It also, therefore, needs many details defined in those rules to be effective (whether the clause itself survives or not).

Initiative #1: Analyze rules from the bottom up. Take well-known concepts from local rules and licenses and assess their viability as national rules. Consolidate as much as possible at the national level and provide a model local license for the remaining terms an MLS might need. 

Initiative #2: Develop the technical model needed to support the rules. Create designations for the specific use case of MLS and Participant data fields and the technical specification for defining them in the data set itself. A potential solution is already underway with a Field Metadata Resource model at RESO which would be extensible for use with LEAP.

Usage Designation Concepts for MLSs and MLS Participants

(See public document for comments/discussion)

There are many reasons to designate access and usage criteria around data fields in an MLS data set. The MLS could tag fields to denote their usage in the MLS’s administration of content. It could also tag these fields upon distribution to provide clarity as to usage designations for its Participant data consumers.

MLSs could adopt a standard model of usage designations for field data within their internal systems. The distinctions for MLS usage and delivery could help identify which fields are appropriate for distribution.

MLS Internal Designations for Data Field Usage (Conceptual, not mandatory for MLSs nor required for LEAP)

  1. PUBLIC: Deliver MLS-wide data in this field to Participant, can be displayed publicly (ex: list price, addresses)
  2. CLIENT ONLY: Deliver MLS-wide data in this field to Participant, can be shared between broker and client but not displayed publicly (ex: private remarks on owner availability for showings)
  3. MULTI-BROKER BACK OFFICE ONLY: Deliver MLS-wide data in this field to Participant, can be used in broker tools but not shared with clients and not displayed publicly (ex: tenant’s phone number, confidential remarks)
  4. SINGLE BROKER BACK OFFICE: Deliver only the Participant’s own data in this field, can be used however the broker deems fit, subject to MLS, licensing, and REALTOR Association rules (ex: everything, including customer information, saved searches)
  5. MLS ONLY: Do not deliver to Participant (ex: passwords)

Because MLSs will already parse out the data not intended to be delivered to each Participant based on the aforementioned use cases, Participants’ usage designations are simpler. MLSs could deliver data to Participants with three designations:

Participant Designations for Data Field Usage (LEAP specific)

    1. PUBLIC: Can be displayed publicly
    2. CLIENT: Can be shared between broker and client but not displayed publicly
    3. BROKER: MLS Content including (a) data from other brokers that can be used in broker tools but not shared with clients and not displayed publicly, and (b) broker’s own data that can be used however the broker deems fit, subject to MLS, licensing, and REALTOR rules

NOTE: An individual listing record will also have a flag to designate internet display as Yes/No in the case of a seller that individually opts an entire listing out of internet display.

LEAP RULES CONCEPTS

Without wordsmithing specific rules to be included in national policy, the following concepts from local rules and licenses should be discussed by the brokerage/MLS community to find consensus as to which concepts should be included (and required) nationally:

Definitions

  1. LEAP: Listing Exchange and Access Policy describes the terms of access and usage of MLS Content by Participants and the license to use this data via a model agreement.
  2. License: A limited, non-exclusive, non-transferable, revocable license for MLS Content from MLS to Participant
  3. MLS Content: All digital MLS content to be delivered from MLS to Participant including, but not limited to, listing and customer information, media, and other digital content related to real estate listings in active, pending, sold, and other statuses.
  4. Participant and Subscriber: The MLS Participant is authorized to access and use MLS Content in this policy, and the Participant’s Subscribers are also authorized these same usage rights subject to the Participant’s consent and under the supervision and accountability of the Participant. Participant and Subscriber are defined in NAR’s MLS Policy Handbook Policy Statement 7.9.
  5. Active Participants: Participants and Subscribers which are current members of the MLS in good standing and eligible to participate in LEAP. All LEAP rights are revoked upon lapse or revocation of Participant’s active MLS membership status.
  6. Client: A person currently engaged in a broker-consumer relationship as defined by state law
  7. Vendor: A third-party organization employed by the Participant to use MLS Content on the Participant’s behalf. A Participant’s subsidiary technology company that provides brokerage technology for the Participant is not a Vendor.

 

Data Usage Designations

  1. Each data field or enumeration in the MLS Content is assigned a usage designation. Participants must adhere to the usage designations in their display and use of MLS Content. Usage designations are delivered within the data set MLSs authorize for Participant use. Designations include:
    1. PUBLIC: Content which is authorized for public electronic display and delivery by Participants via mediums under the Participant’s control including, but not limited to, websites, mobile apps, and other media platforms. “Display” includes “delivery” of MLS Content.
    2. CLIENT: Content which is authorized for Participants to distribute to people with whom they have established and maintained a legal broker-consumer relationship.
    3. BROKER: Content which is designated for usage within the Participant and Subscriber’s business but is not to be displayed or distributed to the public or clients.
  2. Notwithstanding these usage designations, individual listings will be forbidden from public display if they are opted out of internet display by an individual seller (designated in an individual internet display field)
  3. MLSs will maintain current usage designations in all MLS Content delivered to Participants. Participants will ensure that MLS Content is:
    1. Only delivered to the public if it is designated PUBLIC
    2. Only delivered to consumers with whom the brokerage has an existing legal broker/customer relationship if it is designated CLIENT
    3. Only used within the brokerage’s internal business systems if it is designated BROKER and is not that Participant’s own data

Approved Uses

  1. PUBLIC Uses (as previously defined)
  2. CLIENT Uses (as previously defined
  3. BROKER Uses
    1. Sales Production Reporting
    2. Comparative Market Analysis including Automated Valuations
    3. More?

General Rules

  1. Distribution of Content: Except as provided in these rules, Participant shall not make any portion of MLS Content accessible to any person or entity. 
  2. Augmenting of Content: Participants may augment LEAP MLS Content with other content provided it is accurate and not prohibited by any other LEAP rules.
  3. Except as expressly permitted in these rules, Participant shall not sell, modify, or create derivative works of the MLS Content.
  4. Monitoring: Participants must reasonably monitor displays to prevent unauthorized uses and inaccurate display of MLS content.
  5. Verification of Broker-Consumer relationships: Participant shall maintain records of lawful broker-consumer relationships where CLIENT MLS Content is shared with consumers and provide evidence of documentation upon the request of the MLS.
  6. Contact Information: Any Participant LEAP display must prominently display the Participant organization’s name and an email address or telephone number.
  7. Accuracy of Information: Participant must correct any false information under the Participant’s control within 2 business days of the false information being communicated to the Participant.
  8. Listing Firm Identification: The listing firm for every listing on a LEAP display must be identified prominently and in a manner in which a consumer can reasonably be expected to immediately identify who the listing broker of the property is.
  9. Vendor is Party to the Agreement: Third party Vendors which use MLS Content on behalf of the Participant are party to this agreement and its obligations and restrictions. Vendors have no right to the MLS Content or derivatives of its value.
  10. Segmented and Minimally Sufficient Display of Information: Participants may produce segmented displays of less than the full MLS listing set and field sets. However, any Participant display must provide prominent access to the full MLS listing set of Active and Pending listings provided in LEAP, with minimum fields displayed including list price, address, listing ID, and status.
  11. Listings Excluded from Display
    1. Seller Opt-Out: Participants must monitor the Internet Display field in listings and must not display those listings in which sellers have opted out of internet display
    2. Withdrawn, Cancelled, and Expired Listings: Participants shall not display these listings and may choose to share listings in these statuses only directly with Clients.
  12. Update of Content: Participant’s displays of content shall be updated at least once per day.
  13. Privacy: The Participant’s display must provide a policy describing how a user’s information may be used.
  14. Searching and Displaying Listings from Different Sources: Content from multiple MLS and non-MLS sources may be displayed in a commingled or aggregated fashion, so long as the resulting display creates an accurate representation and fulfills the Participant’s duties of honesty to the public, cooperation with REALTOR members, and state licensing requirements. Displays may allow single searches for listings from commingled sources. The source of every listing must be displayed prominently on a detailed individual listing display.
  15. License Agreement: Participants must execute a license agreement with the MLS.

License Concepts to Consider for National Rules Inclusion

  • Domain and Subdomain Restrictions
    • Is there a need for these kinds of technical plumbing restrictions on data usage or are they just carryovers from a different technological time period? Should they be categorically prohibited?
  • MLS Obligations
    • Provide Participant reliable and consistent access to the MLS Content. 
  • Participant Obligations
    • Maintain membership participation and compliance with all laws and regulations
    • Provide access to MLS Content distribution outputs (PUBLIC and CLIENT data) in a timely manner for MLS review/audit upon request
    • Publish the MLS’s DMCA notice on all displays of the MLS Content.Participants shall appoint a designated agent with the U.S. Copyright Office to receive copyright infringement claims.
    • Update MLS if any of its organizational information in the agreement or status of the organization changes.
    • Adapt to the technical needs and bear the costs for technical access process changes that MLSs make over time.

Items Which Would Likely Remain in an Individual MLS’s License

  • Legal Governance
  • Term of Agreement (Timing)
  • Disclaimers and Disclosures
  • Security
  • Fees
  • Ownership of Content/Intellectual Property
  • Indemnification
  • Dispute Resolution
  • Trademarks and Logos

Issues Which are Not Slated for Resolution in LEAP

There are a number of pro-broker/pro-consumer industry issues that have been discussed in connection with LEAP which are not being included in order to design a pragmatic, broadly acceptable solution to be approved and implemented in the short term:

  • Broadening the venues and advertising requirements where non-listing brokers advertise listing brokers’ listings
  • Broadening the non-price data from sold listings which a broker can advertise in non-disclosure states
  • Increasing flexibility of brokers’ capabilities to create derivative works for greater competition and greater value capture of the MLS data set

Consensus

Upon achieving a reasonable level of consensus on rules concepts between the brokerage and MLS community, finalization of the rules to support the LEAP policy proposal draft can commence. CMLS’ LEAP volunteer workgroups will be critical players in this process. Rules could be followed by a model license to support local MLSs in licensing the MLS Content.

The industry’s trade organizations can weigh in on this policy/rules/license model through NAR’s policy proposal and ratification process:

  • NAR MLS Technology and Emerging Issues Advisory Board (TEIAB)
  • NAR Multiple Listing Issues and Policies committee (MLIPC)
  • NAR Executive Committee (EC)
  • NAR Board of Directors (BOD)

Join the conversation.

Author

  • All opinions expressed herein are personal opinions and do not constitute the position or views of any organization. Sam DeBord is CEO of Real Estate Standards Organization (RESO). He has two decades of experience in the real estate industry, spanning real estate brokerages, mortgage lending, and technology consulting. He has served as President’s Liaison for MLS and Data Management with the National Association of REALTORS®, a REACH mentor, and on the board of directors for NAR, Second Century Ventures, and California Regional MLS. Sam began his career as a management consultant for PricewaterhouseCoopers. He is a recognized real estate industry writer for publications including REALTOR® Magazine, Inman News, and the Axiom Business Books Award-Winning Swanepoel Trends Report.

Discuss!