Continued discussion of the NAR's proposed virtual office Website (VOW) policy has already culminated in changes and a shelving of the agenda to enable members more time to familiarize themselves with the issues. Since the NAR's revised proposed VOW policy was released a couple of weeks ago, some attorneys feel additional debate is warranted before the NAR board votes on the proposed policy in May.

Before the proposed policy was released to NAR membership, it was passed to NAR leadership for review. With many brokers, franchisors, MLS and Realtor associations interested in the proposed policy, it wasn't long before copies of the proposal made the rounds and some attorneys were making calls to discuss their clients' viewpoints and legal issues associated with distributing listings on competitors' VOWs.

In response, the NAR has scheduled two meetings - one for some attorneys whose clients favor the inclusion of a broker opt-in/out provision, and another meeting for those who don't.

The meetings, says Laurene Janik, general counsel to the NAR, are "an attempt to listen carefully to vocal or affected constituencies on the topic of whether the policy should include a listing broker "opt out" provision and to discuss any legal issues that are raised by that decision."

The purpose of the meetings, says Janik, is to "help NAR develop the best policy governing the display of MLS content on virtual office websites (VOWs)."

One meeting has already taken place. On March 15th with NAR legal counsel and outside anti-trust counsel met with attorneys for RE/MAX International, Cendant, GMAC, Realty Alliance and Vision Group (alliances of large independent brokers,) the California Association of REALTORS, and a large MLS. Participating by phone and in person, the attorneys discussed including a broker opt-in/opt-out provision in the policy and what the legal ramifications might be.

Janik explains, "The constituencies represented at the meeting have advocated the inclusion of a listing broker "opt out" in the VOW policy. As you know, the proposed policy does not include such a provision.  We wanted to listen to their views."

Under discussion are two types of opt-out: selective and blanket.

"A blanket opt-out means none of the other MLS participants may display that broker's listings on their VOWs," explains Janik. "A selective opt-out means a participant can pick and choose which VOWs may display her listings."

At the heart of the VOW issue are two opposing viewpoints: one constituency feels that some provisions in a final NAR policy may be interpreted as anti-competitive. Others view certain uses of VOWs as threats and would like to see them heavily regulated.

"If you look back at the May proposal," says Brian Larson, an MLS consultant, "eRealty published a lengthy critique of that proposal which read like a summons and complaint of a Sherman anti-trust claim. It outlined elements of an anti-trust claim - if you attack our method of delivering brokerage services, you are violating the law. It was certainly implied by the approach the letter took. eRealty took the Austin board to court and others might approach the same thing. zipRealty has already pooh-poohed the current proposal."

RE/MAX CEO Daryl Jesperson has stated publicly that he feels a selective opt-out provision is "defensible" because the broker owns the listing and it is up to the broker how to distribute it.

"Who says a listing has to be spread all over the place?" Jesperson told Realty Times. Jesperson advocates instead that the broker be able to select the advertising mediums he or she deems most appropriate for the listing.

Cendant sent a white paper to the NAR outlining its argument for an opt-in/out provision, but did not make a case for either selective or blanket opt-in/out. The white paper arrived after the NAR policy had already been written and sent to leadership for review.

GMAC declined to comment.

Although an opt-out provision is not in the current proposed policy, the NAR is giving equal time to opponents to hear their views. A meeting for attorneys of opponents of an opt-out provision such as eRealty and zipRealty, has already been scheduled, says Janik.

Kudos to the NAR for giving all sides a chance to voice continuing concerns over what is clearly the most divisive, explosive and exhausting real estate issue of the times.

Published: March 24, 2003

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