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?


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Rob Hahn

Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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