GIMLS Critical Changes to MLS Rules and Practices (Posted 8/1/24)

The GIMLS Board of Directors felt a need to settle the threat of a lawsuit and minimize future risk to the organization and REALTOR® members.

Additionally, almost all our REALTOR® brokerage members receive liability protection due to NAR’s settlement. To protect our brokerage members moving forward, GIMLS felt the best option was to adopt the practice changes in the settlement agreement - ensuring future liability protection. This is not an endorsement of the practice changes in the NAR settlement but rather a recognition that these will be the new rules of the road - and that we must progress to shape the industry's future. Opting in also offers our REALTOR® members and the GIMLS the most protection against a future lawsuit.

The following are broad outlines of changes to GIMLS Rules & Regulations:

• Prohibition of Compensation Offers within MLS:
  • Compensation details are strictly prohibited in all MLS fields, including uploaded documents, photos, remarks, URL links and virtual tours.
  • Violations will result in fines, listing removal, and potential MLS access suspension.

• Removal of Compensation Fields:
  • Compensation fields will be removed from GIMLS on August 12, 2024.

• Required Consumer Disclosure:
  • Agents must disclose to buyers and sellers that compensation is negotiable and obtain written authorization for any additional payments.

• Mandatory Written Buyer Agreements:
  • All agents must have a written agreement with buyers before property tours, clearly outlining compensation details.
  • Violations will result in significant fines and potential MLS access suspension.

• Misuse of Data Feeds Prohibited:
  • Using MLS data to create compensation platforms is strictly prohibited and will result in the termination of MLS access.

Compliance is Mandatory: Failure to adhere to these changes will result in severe penalties, including fines and potential loss of MLS privileges.

We understand that these changes may require adjustments to your business practices. We strongly recommend reviewing the detailed rule changes and attending training sessions to ensure compliance.

Offering compensation within the MLS system and using MLS data to make compensation offers is prohibited. Compensation details are prohibited in ALL Matrix MLS fields including, but not limited to:

• Document uploads
• Photos
• Public remarks
• REALTOR® Remarks
• Directions
• Virtual tours
• URLs that link to compensation details
• Sold Form and Sold Form Notes

No compensation offered by the listing broker or the seller may be made in the MLS through fields, comments, any product offered by the MLS, or using any data disseminated from the MLS.

GIMLS Rules & Regulations, SECTION 5. NO COMPENSATION OFFERS IN MLS: The MLS must not accept listings containing an offer of compensation in the MLS to other MLS Participants and Subscribers. Further, the MLS may not create, facilitate, or support any non-MLS mechanism (including by providing listing information to an internet aggregator’s website for such purpose) for Participants, Subscribers, or sellers to make offers of compensation to buyer brokers or other buyer representatives.

Use of MLS data or data feeds to directly or indirectly establish or maintain a platform of 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.

The multiple listing service must not have a rule requiring the listing broker to disclose the amount of total negotiated commission in his listing contract, and the multiple listing service shall not publish the total negotiated commission on a listing which has been submitted to the MLS by a participant.

The multiple listing service must prohibit disclosing in any way the total commission negotiated between the seller and the listing broker, or total broker compensation (i.e. combined compensation to both listing brokers and buyer brokers).

The multiple listing service must not have a rule requiring the listing broker to disclose the amount of total negotiated commission in his listing contract, and the multiple listing service shall not publish the total negotiated commission on a listing which has been submitted to the MLS by a participant.

The multiple listing service must prohibit disclosing in any way the total commission negotiated between the seller and the listing broker, or total broker compensation (i.e. combined compensation to both listing brokers and buyer brokers).

Note 1: Multiple listing services must give Participants the ability to disclose to other Participants any potential for a short sale. As used in MLS rules, short sales are defined as a transaction where title transfers, where the sales price is insufficient to pay the total of all liens and costs of sale, and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies. Multiple listing services may, as a matter of local discretion, require Participants to disclose short sales when Participants know a transaction is a potential short sale. (Amended) M

NO COMPENSATION SPECIFIED ON MLS LISTINGS 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.

Note 1: The multiple listing service must not have a rule requiring the listing broker to disclose the amount of total negotiated commission in his listing contract, and the multiple listing service shall not publish the total negotiated commission on a listing which has been submitted to the MLS by a participant. The multiple listing service must prohibit disclosing in any way the total commission negotiated between the seller and the listing broker, or total broker compensation (i.e. combined compensation to both listing brokers and buyer brokers).

Note 2: The multiple listing service shall make no rule on the division of commissions between Participants and non-Participants. This should remain solely the responsibility of the listing broker.

Note 3: Multiple listing services must give Participants the ability to disclose to other Participants any potential for a short sale. As used in these rules, short sales are defined as a transaction where title transfers, where the sale price is insufficient to pay the total of all liens and costs of sale and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies. Multiple listing services may, as a matter of local discretion, require Participants to disclose potential short sales when Participants know a transaction is a potential short sale. (Amended) M

PROHIBITION OF COMPENSATION VIOLATIONS: Offering compensation within the MLS system and using MLS data to make offers of compensation is prohibited. Compensation details are prohibited in ALL fields including, but not limited to, document uploads, photos, public remarks, REALTOR® Remarks, directions, virtual tours, etc.

• 1st Offense: $500 fine, the listing is taken off the market by staff, Warning Letter Sent to agent and Participant Broker. Participant Broker AND Agent attend training approved by MLS Leadership Within 15 days.
• 2^nd Offense: $1000 fine and listing agent MLS access is suspended and listing agent listings removed until Participant Broker AND Agent attend training approved by MLS Leadership. Training must be completed withing 15 days.
• 3rd Offense: The listing agent and Participant Broker will be required to attend a hearing, held according to Section 7 of the GIMLS Rules and Regulations. Sanctions for Agent and /or Participant Broker may include additional fines (not to exceed $15,000) and/or suspension or termination of MLS rights, privileges, and services.

The Offer of Compensation Will Be Removed From the MLS

As of August 12, 2024,  All compensation fields will be removed from the MLS. Therefore, all compensation-related fields, including those on reports, listing and sold forms, will no longer be available. 

This is in preparation for the rule and practice changes that go into effect on August 17, 2024. The listing broker's offer of compensation in the MLS will no longer be permissible, and a seller's offer of compensation will also be prohibited. This eliminates the unilateral offer of compensation.

The following Matrix MLS Fields will be removed on 8/12/24:

RESIDENTIAL INPUT FORM

Listing Agent/Office Tab

Buyer Client Agency: Yes/No

Buyer Client Commission: ______ ($/%)

Buyer Client Fee Unit: $/%

Buyer Customer: Yes / No

Buyer Customer Commission: ______ ($/%)

Buyer Customer Fee Unit: $/%

Sub-Agency: Yes / No

Sub-Agency Commission: ______ ($/%)

Sub Agency Fee Unit: $/%

Variable Commission: Yes / No

Variable Rate Description: _____________

LAND INPUT FORM

Listing Agent/Office Tab

Buyer Client Agency: Yes/No

Buyer Client Commission: ______ ($/%)

Buyer Client Fee Unit: $/%

Buyer Customer: Yes / No

Buyer Customer Commission: ______ ($/%)

Buyer Customer Fee Unit: $/%

Sub-Agency: Yes / No

Sub-Agency Commission: ______ ($/%)

Sub Agency Fee Unit: $/%

Variable Commission: Yes / No

Variable Rate Description: _____________

COMMERCIAL INPUT FORM

Listing Agent/Office Tab

Buyer Client Agency: Yes/No

Buyer Client Commission: ______ ($/%)

Buyer Client Fee Unit: $/%

Buyer Customer: Yes / No

Buyer Customer Commission: ______ ($/%)

Buyer Customer Fee Unit: $/%

Sub-Agency: Yes / No

Sub-Agency Commission: ______ ($/%)

Sub Agency Fee Unit: $/%

Variable Commission: Yes / No

Variable Rate Description: _____________

LONG TERM RENTAL INPUT FORM

Rental Tab

Compensation: Yes/No

Compensation Fee:_____

SHORT TERM RENTAL INPUT FORM

Rental Tab

Compensation: Yes/No

Compensation Fee:_____

GIMLS Rules & Regulations, Section 5.2 Required Consumer Disclosure:

Disclosure 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. 

Written Agreements With Buyers 

Effective August 17, 2024 (pursuant to GIMLS rules), an MLS Participant “working with” a buyer will be required to enter into a written agreement with the buyer before touring a home, including both in-person and live virtual tours.

Additionally, the written buyer agreements must contain the following:

• Specify and conspicuously disclose the amount or rate of any compensation the MLS Participant will receive from any source or how this amount will be determined;
• The amount of compensation must be objectively ascertainable and may not be open-ended (e.g., “buyer broker compensation shall be whatever amount the seller is offering to the buyer”);
• Include a statement that MLS Participants may not receive compensation from any source that exceeds the amount or rate agreed to with the buyer;
• Disclose in conspicuous language that broker commissions are not set by law and are fully negotiable.

NAR TOOLKIT ON BUYER AGREEMENT - https://www.nar.realtor/the-facts/written-buyer-agreements-101

GIMLS Rules & Regulations, SECTION 5.3 - WRITTEN BUYER AGREEMENT: 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:

1. 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;
2. the amount of compensation in a manner that is objectively ascertainable and not open-ended.
3. 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. M

Executed Buyer Agreements must be kept on file in the Participant’s possession for 3 years from the date of signing and made available within 2 business days if requested by the GIAR MLS office.

Any Participant who believes another Participant has engaged in the touring of residential properties without a written buyer agreement, whether virtually or in person, shall send notice of such alleged behavior to GIMLS Staff.

Such notice shall be in writing, specifically identify the dates and property(ies) when the violation occurred and be delivered to the MLS not more than sixty (60) days after the alleged misuse was first identified.

Upon receiving notice, the committee (Board of Directors) will send the notice to the Participant who is accused of failing to meet the Written Buyer Agreement Policy. Within two (2) business days from receipt, the Participant must either: 1) provide proof to the committee (Board of Directors) that a Written Buyer Agreement was signed prior to the showing/ tour, or 2) provide proof to the committee (Board of Directors) that they represented the Seller at the time of the reported infraction. Any proof submitted will be considered by the Committee (Board of Directors) and a decision made as to whether a violation occurred.

• 1st Offense: $100 per property on the same day, not to exceed $500

• 2nd Offense: $500 per property, not to exceed $15,000- Warning Letter Sent to agent and Participant Broker

• 3rd Offense:  $5,000 per property, not to exceed $15,000- Agent MLS access is suspended until Participant Broker AND Agent attend training approved by MLS Leadership.

• 4th Offense: The Agent and Participant Broker will be required to attend a hearing, held according to Section 7 of the GIMLS Rules and Regulations. Sanctions for Agent and /or Participant Broker may include additional fines (not to exceed $15,000) and/or suspension or termination of MLS rights, privileges, and services.

GIMILS Rules & Regulations, Section 18.5 Prohibited Display Of Compensation Or Misuse Of Data Feeds For Compensation Platforms: Use of MLS data or data feeds to directly or indirectly establish or maintain a platform of 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. Violations will be subject to sanctions as outlined in Section 7 of these MLS rules/regulations consistent with the provisions of Sections

Forms

The GAR Forms Committee has been released updated forms as of July 1, 2024. Click here to see Midyear Changes to the GAR Contract Forms. 

Pending listings that receive an accepted offer on or before August 17, 2024, will still have the full effect of any unilateral offer of cooperative compensation made in the MLS that will still be arbitrable under the procuring cause standard.

New disclosures will need to be made to all existing sellers for which there is a valid listing agreement if that disclosure has not already been made.

These disclosures are:

• Disclose to prospective sellers that broker compensation is not set by law and is fully negotiable;
• 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

We recommend consulting with your Designated Broker regarding existing listings. Existing listings may not need to be amended other than with an addendum with disclosures. However, if you want to stop offering broker-to-broker compensation and move to a seller-paid compensation model or make no-offer of compensation, an amendment to the listing agreement would be needed.

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