The National Association of REALTORS® Board of Directors adopted changes to MLS Policy Statement 7.21, Appropriate Procedures for Rules Enforcement, that became effective January 1, 2021. MLS Policy Statement 7.21 now requires the following:

  • MLS participants and subscribers can receive no more than three administrative sanctions in a calendar year before they are required to attend a hearing.
  • An MLS must provide a way to process complaints without revealing the complainant’s identity.
  • An MLS must send a copy of all administrative sanctions against a subscriber to the subscriber’s participant.
  • The participant is required to attend the hearing of a subscriber who has received more than three administrative sanctions within a calendar year.

As a result of these changes, local MLSs may see an increase in MLS hearings conducted at the local level. The Texas REALTORS® Legal Department created an MLS Hearings 101 Procedural Guide to assist local associations and MLSs in conducting these hearings.

Answers to Frequently Asked Questions About the New Policy

ANONYMOUS COMPLAINTS

Under the new policy statement, would all types of violations qualify for allowing complainants to keep their identities from being revealed? Are there any limitations?

Yes. The policy allowing anonymous reporting is broad and not limited to certain violations. From a practical perspective, there may be scenarios where an MLS may need to advise the reporting party about a need for further involvement or scenarios which may inadvertently reveal the identity (e.g., reported violations on lockbox access issues where the report is limited to one particular property).

Does anonymous mean not revealing the complainant’s identity to the party?

Yes. The MLS/association may still collect the reporting party’s identity as there may be a need to follow up with that person or obtain additional information or notify him or her that a matter is proceeding to a hearing. Anonymity is as to the respondent/party being complained about.

Can an MLS require that the complainant’s identity be revealed to the staff or the MLS committee? Note: Texas REALTORS® requires this in the citation policy for anonymous ethics complaints.

Staff: yes. MLS committee: no.

If the complainant decides not to reveal his or her identity, is it acceptable for an MLS to have a disclaimer explaining that the burden is on the complainant to ensure that nothing in the complaint or evidence should identify the complainant? Note: Texas REALTORS® also does this for anonymous ethics complaints.

Yes. The intent is for anonymity as far as not revealing the complaining party’s info to the respondent. MLS/association staff are able to collect reporting party information.

HEARINGS

Under the new policy, what types of violations are considered violations of listing information?

Violations of listing information are intended to address those violations that are clerical listing-input issues. An example is an inadvertent typo when reporting listing information, such as  price or address.

What types of violations would not be exempt?

There is no requirement to exempt any violation. The option to allow for more violations for listing information is an option intended to address data-entry issues.

Can staff rather than an MLS committee administratively consider and determine whether a violation has occurred?

None of the changes modify or alter any existing hearing or administrative procedures as provided for in MLS policy or the CEAM.

Can an MLS committee conduct the hearings rather than a local professional standards committee? Is it required that a local association/MLS must have a professional standards committee to conduct hearings?

None of the changes modify or alter any existing hearing or administrative procedures as provided for in MLS policy or the CEAM.

Does confidentiality apply to MLS hearings similar to how it applies to ethics and arbitration hearings?

Yes. However, MLSs may report on aggregated violation activity, such as number of citations, type, etc.