The following sections from our newest release of the SFARMLS Rules & Regulations with changes related to the specific terms of the settlement are extracted here for easy access and reference. For a more complete document with example use-cases and other information, you can download the full guide here.
Extracted Rules and Callouts to Specific Changes
2.1 No Offers of Compensation Information in MLS
No offers of compensation to cooperating brokers or other buyer representatives, and no compensation information whatsoever, including without limitation as a part of any concessions, shall be directly or indirectly made, referenced or disclosed in the MLS, including in any private remarks or by providing a link to a website where such information is referenced. Any such offers, references or disclosures are strictly prohibited. The compensation information prohibited by this paragraph includes both listing broker compensation and total brokerage compensation (i.e., the combined compensation to both listing brokers and cooperating brokers).
2.2 Mandatory Compensation Disclosure to Sellers and Buyers
Participants and Real Estate Subscribers must disclose to prospective sellers and buyers in conspicuous language in their listing agreement with sellers, their agreement with buyers, and any pre-closing disclosure documents (if any, and except those documents that are government-specified), that broker compensation, including without limitation any commissions, is not set by law and is fully negotiable. In the event that any pre-closing disclosure documents are a government form, then Participants must include a disclosure with conspicuous language expressly stating that broker commissions are not set by law and are fully negotiable. Participants and Real Estate Subscribers, in representing sellers, must also conspicuously 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, agent, or other representative (e.g. real estate attorney) acting for buyers. This disclosure must include the amount or rate of any such payment and be made in writing in advance of any payment or agreement to pay another broker acting for buyers.
4.1.1 Broker Participant
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The key is that the Participant or potential Participant actively endeavors with respect to properties of the type that are listed on the MLS in which participation is sought. Cooperation is the obligation to share information on listed property and to make property available to other brokers for showing to prospective purchasers and tenants when it is in the best interests of their client(s). This requirement does not permit an MLS to deny participation to a Participant or potential Participant that operates a Virtual Office Website (“VOW”, see section 12.17), including a VOW that the Participant uses to refer customers to other Participants, if the Participant or potential Participant actively endeavors to cooperate. An MLS may evaluate whether a Participant or potential Participant “actively endeavors during the operation of its real estate business to cooperate only if the MLS has a reasonable basis to believe that the Participant or potential Participant is in fact not doing so. Participants that require other Participants, Subscribers, Clerical Users, or Affiliates to locate listing data outside of the MLS (i.e. on their own portal/website or that of an unlicensed, or non-participant, third party) do not qualify as “actively endeavoring” and may be subject to a termination of participation rights.
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7.12 Offers of Compensation Specified on MLS Listings
Participants, Subscribers, and their sellers are prohibited from making offers of compensation to buyer brokers and other buyer representatives in the MLS. Additionally, Participants and Subscribers are prohibited from disclosing in the MLS, in any way, the total commission negotiated between the seller and the listing broker, or total broker compensation (i.e. combined compensation to both listing brokers and buyer brokers). The MLS reserves the right to remove a listing from the MLS database that does not conform to the requirements of this section. This rule does not prevent sellers from offering buyer concessions on the MLS (e.g. for buyer closing costs) so long as such concessions are not limited to or conditioned on the retention of or payment to a Buyer Broker or other buyer representative.
8.3.1 Buyer Broker Agreement Written Documentation.
The service shall have the right to demand from an MLS Participant a copy of any written buyer broker agreement satisfying the requirements of Rule 8.3 whenever a Participant or Subscriber working with the buyer tours a property listed in the MLS. If the Participant or Subscriber fails to provide the agreement requested by the service within 1 business day after the service’s request or if the agreement provided to the service does not include all the terms required in Rule 8.3, the service shall have the right to discipline the Participant or Subscriber for a violation of MLS Rules.
11.13 Prohibition on Creation of External Compensation Platform
Use of MLS data, a compilation of data obtained from the MLS, or MLS data feeds to directly or indirectly establish or maintain a platform of offers of compensation from multiple brokers to buyer brokers or other buyer representatives is prohibited and will result in the MLS terminating that Participant’s access to any MLS data and data feeds. This Paragraph is not violated if a Broker Participant displays, outside the MLS, both (a) data or data feeds from the MLS and (b) offers of compensation to buyer brokers or other buyer representatives, provided that the offers are limited to listings from the Participant’s own brokerage.
12.5.2 Private Remarks Restrictions and Requirements.
- For the purposes of these MLS Rules & Regulations, the term Private Remarks is synonymous with “Confidential Remarks” and “Agent-Only Remarks.”
- References to burglar alarm, security system or gate codes may be placed in confidential remarks only with seller’s written permission.
- Caution: Title or escrow information may be entered in confidential remarks; however, Participants/Subscribers should note that any verbiage which implies a requirement to use a specific title company or escrow service may be a violation of RESPA. You are advised to seek legal counsel for specific advice when using such verbiage.
- No information regarding Broker compensation or bonuses may be referenced or disclosed in private remarks or referenced directly or indirectly.
- Except for reciprocal listings, no reference may be made to licensees who are not Participants or Subscribers.
14.3 CITATIONS
The MLS Committee, subject to approval of the Board of Directors, may implement a schedule of fines for certain MLS rules violations and direct staff to issue citations for the specified MLS rules violations and implement a procedure whereby the Participant and Subscriber receiving the citation may either pay the amount specified on the citation or request a full hearing in accordance with the procedures set forth in the California Code of Ethics and Arbitration Manual.
In the case of citations regarding the inclusion of prohibited compensation information (see sections: 2.2, 7.12, 8.7, 12.5.1 and 12.5.2) a citation can also carry a suspension of access to the MLS and any connected systems until the citation is paid by either the Subscriber or the Participant under which the Subscriber works, or possible Termination.
Links and References
SFARMLS Rules & Regulations 2024 (most current version, complete)
SFARMLS R&R Change Guide 2024-Q3 (the comprehensive guide to the changes for the settlement)
News About the NAR Settlement (the ongoing log of information about the settlement)