MVMLS Compensation Rule Changes

On June 14, 2024, the Martha's Vineyard Multiple Listing Service executed Appendix B of the NAR proposed settlement in antitrust litigation regarding cooperative compensation. By opting into the agreement and agreeing to implement the practice changes contained within, MVMLS is reducing risk and providing liability protection for all of its brokerage members and the company by adhering to the prescribed rule changes.

The new rules will go into effect for the Martha's Vineyard MLS on August 12, 2024.

The MVMLS Board of Directors felt a need to settle the threat of a lawsuit against the company and minimize future risk to the organization and members. Additionally, almost all our REALTOR® brokerage members receive liability protection due to NAR’s settlement. To protect our brokerage members moving forward, MVMLS felt the best option was to adopt the practice changes in the settlement agreement - ensuring future liability protection for all member brokerages and agents.

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 members and the MLS the most protection against a future lawsuit.

The following are broad outlines of what will be contained in MVMLS rules beginning August 12, 2024:

• The mandatory offer of compensation will be removed to participate in MVMLS, including all compensation-related fields in the MLS system;
• There will be a ban on offering compensation within the MLS system and prohibitions on using MLS data to make offers of compensation;
• Written agreements with buyers will be required when providing buyer services and prior to showing a home, whether virtually or in person. This written agreement must contain objectionably ascertainable compensation due to the buyer broker, specify the total amount the buyer expects to receive from any source in the transaction for buyer services and disclose to the buyer that commissions are not set by law.
• Disclosures to sellers in listing agreements will be required to inform sellers that commissions are not set by law, and the seller must authorize any authorization of an offer of compensation or buyer concession (incentive);

As of August 12, 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.
Therefore, all compensation-related fields, including those on reports and list input, will no longer be available. 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..

Below is a list of fields that will be eliminated from listing input:

Beginning August 12, 2024 (pursuant to MVMLS rules), an MLS Participant “working with” a buyer will be required to enter into a written agreement with the buyer prior to touring a home, including both in-person and live virtual tours.

Additionally, the 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.

Pending listings that receive an accepted offer on or before August 12, 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. MVMLS expects MAR to have a temporary form to make those disclosures for current listings.

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

The MAR Listing Agreement does 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, you would need an amendment to the listing agreement.

The MAR Forms Advisory Committee has been working on new forms. We expect the following forms to be released:

• Buyer Broker Agreement
• Listing Agreement
• Contract to Purchase Real Estate
• Purchase and Sales Agreement

*Form 310: Addendum for Seller to Compensate Buyer Broker will be integrated into the Contract to Purchase Real Estate and will not need a separate form.

We will provide updates and training when those forms are released.