A four-year-old policy has become the center of one of the most controversial and contentious conflicts in the entire real estate industry, sparking heated debate among industry professionals and insiders and even a DOJ investigation. Cooperation clearly is a very big deal, no matter what side of the fence you are on.
What is the Clear Cooperation Policy?
Adopted by the National Association of Realtors in 2020, the Clear Cooperation Policy (CCP) is designed to ensure equal access to property listings by requiring any property marketed by a Realtor to be listed on an MLS within one business day. Violators must pay a $500 fine per offense. NAR’s intention was to ensure fairness and transparency in the housing market and to prevent the growth of so-called pocket listings—homes that are kept off MLS and only marketed to select clients.
Proponents of the regulation say it promotes fair housing and curbs housing discrimination because it allows every buyer to see every property in a market and every seller gets their homes seen by every potential buyer. Critics claim that the policy stifles competition and limits agent autonomy because they are locked into using the MLS system.
AREA Launches Petition & Announces Possible Class Action Suite
Last September The American Real Estate Association (AREA) launched a petition calling on the National Association of Realtors (NAR) to repeal its Clear Cooperation policy, and asked real estate professionals to promote the petition on social media with the hashtag #EndCC.
The petition states that NAR forces real estate professionals to “submit listings to the Multiple Listing Service (MLS) within one business day of public marketing, regardless of their clients’ wishes. This one-size-fits-all mandate violates the fiduciary duty agents have to their clients, forcing them to disclose information that may not be in the homeowner’s best interest.” And the following month, industry headlines called out, “American Real Estate Association seeks input for lawsuit against NSR’s Clear Cooperation Policy”
New Legal Scrutiny By The Feds
More legal concerns arose when The Department of Justice raised antitrust concerns and launched an investigation into the policy’s implications for the real estate industry as a whole. The idea is that Clear Cooperation is in noncompliance with the Antitrust Law because it forces agents to join established MLS systems, restricts competition, and creates barriers to entry for newer, smaller listing platforms trying to compete with established MLSs.
Those in Favor Site Fair Housing Concerns…
There are many real estate industry leaders in favor of Clear Cooperation. During an industry panel put on by PropTech platform Luxury Presence, Matt Hendricks, senior director of industry affairs for Zillow, stated that making listings transparent is crucial for a fair housing market, and that off-market listings not only reduce visibility but can also result in lower sale prices, which harms sellers.
Clear Cooperation supporters shored up their arguments with fair housing considerations; where presenting properties to smaller groups may unintentionally violate fair housing rules and suggest that mandating that all listings be included in the MLS would help prevent excluding people on condition of race, color, religion, sex, national origin, and other protected classes.
Those Apposed Fear Overreach of NSR…
Policy critics say that the fair housing issue is a diversion, and that Clear Cooperation’s true purpose is to consolidate NAR’s power over the real estate industry and strengthen the importance of MLSs. CCP critics say that the policy is irrelevant in many markets and that sometimes homes are kept off the MLS due to privacy concerns, such as situations where there was a death, a hoarder, or the sale involves a celebrity or a divorce.
Robert Reffkin, CEO of PropTech company Compass, is among the policy’s most vocal critics, referring to Clear Cooperation as “forced cooperation” that eliminates choice for both agents and consumers by forcing agents to use the MLS. He feels that agents and brokers should have the option to market their properties however they want instead of being forced to list them on the MLS.
Florida agent, Holly Meyer Lucas of the Meyer Lucas Real Estate Team in Jupiter is quoted in Luxury Presence as saying, “My career is where it is because of my agent-agent relationships. And I worked hard for those, not just randomly putting stuff in the MLS. … I think Clear Cooperation was brought about by mediocre agents who had mediocre access.”
NAR & MLS Weigh In
Amid calls for repeal or reform, NAR’s MLS Technology and Emerging Issues Advisory Board met in October to discuss the controversial policy, ultimately deciding not to make any recommendations regarding the Clear Cooperation Policy or take any action to reverse or alter it. But they did pass along the feedback it has received regarding Clear Cooperation to the group’s leadership team.
The Council of Multiple Listing Services, the trade organization of MLSs in North America, has also weighed in, stating that the CCP should remain in place, and that proposed adjustments to the policy need to be carefully evaluated. The CMLS stated that repealing the policy would have an adverse effect not only on homebuyers and sellers but agents and brokers as well.
As for the clients…
An AI Overview of online surveys reveals: “According to recent surveys and industry discussions, many clients seem to support the “Clear Cooperation Policy” in real estate, as it generally promotes transparency and ensures wider access to listings, but there is a growing debate with some clients expressing concerns about potential restrictions on seller choice and privacy depending on how the policy is implemented; larger brokerages tend to be more vocal against the policy, while smaller ones might be more open to it.”
As It Stands
Listing services in some states make allowances for sellers and agents who want to bypass the MLS for various reasons. With no timeframe regarding when a decision will be made, the fate of Clear Cooperation remains up in the air amid ongoing litigation and the DOJ investigations.
As your own next closing deadline approaches, be sure to choose a lawyer with a sterling reputation for professionalism, integrity and discretion to augment your team. Contact Florida Bar Board-Certified Attorneys David E. Klein, Esq. and Guy Rabideau, Esq. at Rabideauklein.com. They have the expertise and experience you need to ensure your interests are protected throughout your real estate transactions,