Superintendent Addresses MLS Issues in Advisory Letters

Although the Superintendent of the Division of Real Estate does not enforce Multiple Listing Service (“MLS”) Rules, the publicly disseminated information in the MLS can be viewed as advertising. License law requires licensees to refrain from publishing any advertising that can be misleading or misrepresents any properties, terms, values, policies, or services of the business conducted.

At the conclusion of an investigation, the Superintendent can either close the case or forward a case to a formal hearing and then the Real Estate Commission. In some instances, the Superintendent terminates an investigation with the issuance of an advisory letter. The advisory letters put licensees on notice that certain conduct should be avoided in the future. In the last year, the Superintendent has issued multiple advisory letters to licensees regarding MLS issues. These advisory letters are a useful tool in any licensee’s practice. Reviewing the Superintendent’s advisories can help keep licensees from making the same or similar mistakes.

In one case, the Superintendent investigated whether the respondent misrepresented herself as a listing agent and whether the agent offered the property in the MLS without the owner’s consent. Upon investigation, the Superintendent learned that the subject listing was not entered into its pending/sold status in the MLS until months after the closing/transfer of the property. The Superintendent noted the delay caused confusion among the local board and other area licensees. Although the Superintendent recognized that the licensee did take steps to discuss the matter with her principal broker and local board, she was urged to pursue those steps in a timelier manner.

In another case, the Superintendent considered whether a licensee entered unclear or incorrect information in the “agent to agent” comments section of the MLS system. The Superintendent advised the licensee to utilize specific dates and time to signify deadlines when calling for highest and best offers, and if the deadlines pass, the comments should be updated to reflect the new information.

One case involved an investigation of a change in MLS status prior to termination of a purchase contract. During the investigation, the Superintendent learned that the status was changed to active prior to the termination of the purchase contract. The Superintendent cautioned the licensee to make sure any purchase agreements are officially terminated before changing a property status in the MLS.

Another case dealt with a licensee’s disclosure in the MLS that a property had public sewer when the property had a septic system. The licensee was cautioned that buyers read the MLS information in making its decision to purchase. Thus, the licensee has a responsibility to be accurate with the information contained in the MLS. The Superintendent also advised the licensee to be more diligent in reviewing or confirming a property’s utilities, if the seller is unfamiliar with the property.

The final case dealt with a licensee’s failure to disclose their ownership interest in an advertised property. The Superintendent advised the licensee to make sure that the licensee’s ownership status is disclosed in the MLS as “agent owned” if the property is listed with the licensee’s brokerage.

Although many licensees view the MLS as a mechanism to communicate information among fellow agents, the MLS is also an important advertising tool. As with any advertising medium, licensees are obligated to make sure the information they provide about a public is accurate and not misleading.