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Four days after the National Association of Realtors issued a cease-and-desist letter over its MLS Choice membership, Phoenix Realtors has responded.
Andy Fegley | Credit: LinkedIn
“We cannot be clearer with our intent behind MLS Choice: This is one more option that is both legally sound and a responsible offering to a changing industry,” PAR CEO Andy Fegley said in an emailed statement to Inman late Monday. “MLS Choice is not and never will be a Realtor membership. It is a fee-based subscription. There is a difference between increasing choice and replacing it, and we will always proudly support and champion Realtors.”
“We are surprised to learn that NAR would view increased options as a threat, and we’ve engaged in meaningful discussion with them to help alleviate their confusion,” he added. “Our primary goal is to engage in an amicable path forward with NAR so that we can best serve our industry’s real estate professionals.”
Fegley also shared PAR’s counsel’s letter to NAR, which reiterated the differences between NAR and MLS Choice memberships and outlined the regulations that support the creation of MLS-only products for non-Realtors.
“NAR asserts that MLS Choice is a PAR ‘membership option’ and that ‘PAR is allowing real estate licensees to become a member [sic] of PAR through ‘MLS Choice’ without joining the state or national association,” the letter read. “As PAR has explained repeatedly, MLS Choice does no such thing … Like other associations across the country, PAR has offered an MLS-only product for years — for example, MLS access to non-Realtor builders. MLS Choice is not a departure from that.”
MLS Choice — formerly known as MLS Only — has long been used by Arizona brokers in cases where agents aren’t required to maintain three-way memberships to access the Arizona Regional Multiple Listing Service. That option was made possible by a 1994 NAR rule that eliminated the requirement that participants in Realtor-association MLSs must be Realtor association members. That left MLSs to decide whether subscribers needed to be Realtor members, which has remained a common requirement today.
Non-Realtors can subscribe to MLS Choice for $249 to gain access to state-compliant forms, legal aid and continuing education without joining NAR, the Arizona Association of Realtors or PAR. Agents joining MLS Choice can’t call themselves Realtors and won’t have access to NAR advocacy, business tools, education opportunities and certifications — differences that are laid out in a color-coded chart on PAR’s site.
“As the chart makes clear, using easy-to-understand colors and graphical depictions, MLS Choice does not include membership in PAR,” the letter read. “Nor does it include benefits of any level of association membership. Instead, MLS Choice is an option for brokers to subscribe to MLS and other educational and business services that NAR does not dispute may be offered by PAR to non-Realtors.”
PAR’s counsel said the cease-and-desist letter is ultimately a manufactured opportunity to defend its three-way agreement policy, which is at the center of several antitrust lawsuits in California, Texas and Michigan. PAR claimed NAR became aware of MLS Choice on Oct. 15, when NAR First Vice President-Elect Christine Hansen allegedly learned about MLS Choice from a neighboring association and told fellow NAR leaders. However, PAR said NAR waited until Dec. 18 to send its demand.
“NAR left PAR a mere three business days to obtain counsel, discern NAR’s poorly articulated concerns, which NAR could have raised any time in the preceding eight weeks, and attempt to address them,” the letter read. “PAR questions NAR’s motivation in waiting until the eve of two major winter holidays to raise its concerns, but nonetheless PAR immediately retained counsel … PAR recognizes that NAR wants an occasion to defend its ‘three-way agreement’ requiring licensees to belong to local, state, and national associations to receive Realtor benefits, but this is not that occasion.”
PAR’s counsel said they spoke with NAR on ways to make MLS Choice promotional material “even more clear” about the differences between the memberships, but NAR and its counsel were allegedly “expressly uninterested” in any options outside of PAR canceling the membership.
However, PAR said it’s unwilling to withdraw the MLS Choice option and will charge forward with its rollout, despite NAR’s legal threat.
“PAR respectfully asks that NAR reconsider its position and engage in meaningful conversation about solutions rather than using NAR’s substantial financial superiority to quash PAR’s effort to innovate and serve the demands of the real estate market,” the letter ended. “There is no doubt that NAR’s now nationally publicized threats against PAR will, as NAR seems to have intended, chill the innovation of other associations and MLSs.”
“Nevertheless, if NAR is willing to talk, PAR would like to hear, listen, and engage in discussion,” it added. “But PAR will not categorically withdraw MLS Choice which you told me is the only response to the Demand that NAR will accept.”
Inman reached out to NAR about PAR’s letter, and an association spokesperson said NAR is resolute in its stance about MLS Choice. The next step, they said, will be revoking Phoenix Realtors charter.
“Under their charters from NAR, state and local associations are prohibited from adopting any practice inconsistent with NAR’s bylaws and Constitution,” the spokesperson told Inman in an emailed statement. “Phoenix REALTORS is violating NAR’s bylaws and Constitution by offering a non-REALTOR membership option. NAR has no choice but to take action to defend the REALTOR trademark, our integrated model, and the members and consumers they serve.”
“Without action, we put the benefits NAR members rely on—such as market research, business resources, a unified advocacy platform, and a single Code of Ethics—and the organization itself at risk,” they added. “NAR has begun the process—as outlined in our bylaws—to revoke Phoenix REALTORS’ charter. As a next step, Phoenix REALTORS will have an opportunity to meet and discuss with a panel of NAR’s Executive Committee. Should the local association continue to violate NAR policy, a hearing before a larger panel of our Executive Committee will be scheduled.”
Lesley Muchow
In a previous Inman article, NAR General Counsel Lesley Muchow said PAR’s defense of MLS Choice falls flat, as NAR already doesn’t require agents to be Association members to access an MLS.
“[Realtor associations] are chartered to strengthen the Realtor organization to benefit its members and the consumers they serve and set and enforce standards for ethical real estate practices,” Muchow said in the email to NAR’s board of directors and association leaders. “To be clear, NAR does not require that real estate professionals be members of a Realtor association to access an MLS. MLS participation is determined at the local level.”
“NAR continues to promote competition and supports pro-consumer local broker marketplaces,” she added. “This is a matter of maintaining standards for the Realtor brand as we always have and will continue to do.”
