What's more important -- MLS rules or the Code of Ethics

Can an MLS be authorized to refer property to other participants as subagents?

This case study from the National Association of REALTOR® Ethics and Arbitration Manual concerns Article 3 of the Code of Ethics, which states: "REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker. (Amended 1/95)"

REALTOR® A complained to his board of REALTORS® that procedures in the board’s multiple listing service permitted REALTORS® participating in the service to evade their obligations under Article 3 of the Code of Ethics. His specific complaint was that, as exclusive agent of Client B, he had filed the client’s property in the multiple listing service. Other REALTORS® participating in the multiple listing service had contacted Client B directly to make appointments to show the property and to transmit offers to purchase it without his (REALTOR® A’s) knowledge or consent. When he objected to this conduct, the officers of the multiple listing service had cited the MLS rule that held that placing property in the service had the effect of listing the property with the MLS and authorized the MLS to refer it to other participants as subagents, who were then free to transmit offers directly to the client. REALTOR® A’s complaint emphasized that his objection was primarily to the rule of the multiple listing service.

The complaint was referred to the directors of the board of REALTORS® , which asked the chairperson of the board’s Multiple Listing Committee to attend a special directors’ meeting on the subject.

How do you think the board of directors ruled?

Read the full Code of Ethics at www.tar.org/code.html

Ruling
At the meeting, it was pointed out that the contested rule of the multiple listing service, which had not been submitted to the board of directors for approval, was in conflict with Article 3 of the Code of Ethics, and with the nature and purpose of the MLS itself, since the MLS did not provide brokerage services and could not function as an agent of sellers. The multiple listing service was directed to rescind all procedural rules that permitted the service or any of its participants to intrude upon the agency status of any REALTOR® holding an exclusive listing.

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REALTORS®, visit www.tar.org.