1. Virtual Office Websites
Texas Association of REALTORS®
Austin, Texas
June 11, 2003

2. Virtual Office Websites
Websites through which brokers provide real estate brokerage services to consumers with whom they have established a broker/consumer relationship, where the consumer can search for MLS listing data.

3. Why Regulate VOWs? Why Now?
VOWs were in operation.
VOWs were not subject to any specific rules other than the MLS rules.
Absent VOW policy, the ability of NAR and MLSs to prevent or terminate Internet misuse of MLS data was seriously compromised.

12. Issues considered by the VOW Work Group
Are VOWs Advertising or Brokerage?
Do State Laws Matter?
Concerns About Referral Fees and Portals
Security, Privacy and Terms of Use Policies
Degree of Local MLS Control and Discretion
Enforcement Issues
Broker Opt Out?

13. Policy Governing Use of MLS Data in Connection with Internet Brokerage Services Offered by MLS Participants
“Virtual Office Websites” Adopted by the NAR Board of Directors May 17, 2003

14. Scope of Policy … Participants may operate VOWs, as defined.
Participant’s Internet websites may also provide other features, information or services in addition to the VOW (including IDX), not subject to this policy.
A consumer’s search for property on a VOW must be subject to the MLS Participant’s “oversight, supervision and accountability.”

15. Scope of Policy …
Each office of a real estate firm may operate a VOW using only listing data supplied by the MLS(s) in which it has participatory rights; May combine offices’ VOWs on a “master” firm Website.
MLSs may not adopt rules or regulations more/less restrictive than VOW policy.
State law governs as to whether a VOW is “advertising” for regulatory purposes.

16. VOW Criteria
A Participant’s VOW must satisfy criteria in five specific areas before operating to permit search and retrieval of MLS database information by consumers (“Registrants”):
1. Create a lawful consumer-broker relationship.
2. Obtain the identity of Registrant/confirm Registrant’s acceptance of “Terms of Use.”
3. Employ security measures to protect the MLS data.
4. Comply with all VOW operational requirements.
5. Provide notice to the MLS; access to Participants.

17. 1. Establish a lawful consumer-broker relationship:
Satisfy all applicable state legal requirements in connection with providing real estate brokerage services to clients and customers (such as: agency, non-agency and other disclosure obligations).
Execute any agreements required by state law.

18. 2a. Obtain the Identity of Each Registrant …
Obtain from “Registrant” name and a valid address.
Registrant access to VOW via a unique user name and password combination for each Registrant; must expire on a date certain.
Each user name and password may be associated with only one address.
Maintain a record of user name/password for 180 days after the expiration of Registrant’s password.

19. 2b. Registrant Must Affirmatively Express Acceptance (by mouse click) to “Terms of Use” that Provides At Least The Following:
That the Registrant:
has entered into a lawful consumer-broker relationship with the Participant,
intends to use the data for personal/ non-commercial use,
has a bona fide interest in purchase/ sale/lease of property,
will not copy/redistribute the MLS data, and
recognizes the MLS’s copyright in and ownership of the MLS listing database.

20. Consumer “Representation” or “Financial Obligations” Agreement (if offered):
May not be included in the Terms of Use,
Must be prominently labeled, and
May not be established solely by mouse click.

21. “Opt Out”
Use of MLS active listing data on a VOW is subject to the permission of the listing broker. Unless prohibited by state law, permission is presumed unless a listing broker “opts out” by directing that his/her listings not be available for search or display on another participant’s VOW.
No “opt in” option permitted.

22. The Philosophy Behind “Opt-out”
· Work Group’s position: Internet use of MLS listing data is qualitatively different than “traditional” modes of serving brokerage clients and customers.
MLS participation does not automatically and necessarily include authorizing other participants to show the broker's listings on the websites of those others (even to “bona fide” clients or customers.)
A broker’s decision to participate in the MLS should not foreclose the opportunity to control other MLS participants’ Internet use of listing data.
· Even though Internet display deemed “different,” rules on use of MLS data should mirror other service mechanisms (phone, in person, fax) unless justified by Internet context (parity).

23. Two Forms of Opt Out …
Blanket Opt Out: Listing broker independently elects to opt out of the VOWs of all other participants in the MLS.
Selective Opt Out: Listing broker independently elects to opt out of the VOWs of selected other participants.

24. Opt Out Mechanisms
Blanket Opt out – Opt out broker notifies MLS; MLS provides list to VOW; VOW operator “scrapes.” (MLS could provide “scraped feed.”)
Selective – Broker to VOW operator communication.

25. Related to Opt-Out Policies:
Sellers may withhold their listings or their property addresses from display on the Internet (“Seller opt out.”)
Such listings may nevertheless be displayed on the listing broker’s own VOW or website, with seller’s consent.

26. 3. Protection of MLS Data:
The VOW must protect MLS data by employing reasonable efforts to monitor and prevent “scraping” or other unauthorized accessing, reproduction or use of MLS data.
If data provided through persistent download, MLS may require the VOW to use appropriate security protection, such as firewalls, not greater than those employed by the MLS.
MLS’s may require Participants to maintain “audit trail” of Registrant’s activity on a VOW, make audit trail available to the MLS if security breach suspected.

27. 4a. Operational Requirements:
The Participant may not distribute any portion of the MLS database to anyone.
The VOW must establish and display a privacy policy advising Registrants how information will be used.
A Participant may exclude MLS listings from the VOW on an objective (price, property type, geography) basis.
The VOW must refresh data at least once every seven days.

28. 4b. Agent VOWs
If authorized by the MLS, non-principal brokers or sales licensees affiliated with MLS Participants may operate a VOW with the consent of the Participant.
Agent VOWs are subject to the control of the Participant.
Both Participant and non-principal shall be accountable for compliance.

29. 4c. Referrals …
No sale of Registrant-provided information except for referrals to other brokers that satisfy the following:
1. Participant’s residential real estate brokerage principally consists of listing or selling the types of property required to be filed with the MLS,
2. Registrant seeking property of a type, in a price range or in a location for which the Participant does not ordinarily provide real estate brokerage services, and
3. The number of Registrant identities provided or the revenue generated is an insubstantial portion of the brokerage.

30. 5. Notice to MLS/ Participant Access to VOW
MLS Participants must notify MLS of intention to establish and operate a VOW (compliance/“opt out” purposes.)
and
Must make VOW accessible to the MLS and other MLS Participants (to permit compliance monitoring.)

31. Policies Applicable to MLSs
REALTOR Associations and MLSs shall enable MLS Participants to operate VOWs subject to state law and MLS Policy.
If requested by a Participant MLSs shall provide basic downloading of listing information sufficient to operate a VOW but exclude the listing or property address of any seller who affirmatively directs that this information not appear on the Internet or other electronic forms of display or distribution.
MLSs may charge VOW Participants a reasonable fee to offset downloading or enhancement costs.

32. Downloading Defined:
Electronic transmission of data from MLS servers to Participants’ servers on a persistent or a transient basis (at MLS discretion).
MLS may also offer alternative display options such as “framing” other publicly-accessible sites with the permission of that site.

33. Six Requirements That MLSs May Adopt
The “Parity” Provision
Local MLSs may impose certain requirements on VOWs only if equivalent requirements are imposed on Participants’ use of MLS listing data in providing brokerage services via other delivery mechanisms ( , fax, hand delivery, etc).

34. Local Options Subject to “Parity”
1: Prohibit the search or display of:
Expired, withdrawn, pending or sold listings;
Compensation offered to MLS Participants;
The type of listing agreement;
Seller and occupant name, phone number, and address; and
Broker confidential remarks.
2: Require notice posted on all MLS data displayed that it is deemed reliable but not guaranteed by MLS.

35. Local Options Subject to “Parity”
3: Require that no advertising be visible when displaying the listings of other Participants except the name, address, phone number and company logo of the VOW operator (Participant or agent) and other information required by state law.
4: Require that MLS data fields not be changed; may be augmented with additional data (not otherwise prohibited from display) the source of which is clearly identified.

36. Local Options Subject to “Parity”
5: Require that all listings displayed on a VOW identify the name of the listing firm in typeface not smaller than the median used in the display of listing data.
6: Limit the number of current or (if permitted) sold listings that a Registrant may view or download to a reasonable number determined by the MLS.

37. Local Option Regulations Not Subject to “Parity”
Require Participants displaying broker’s listings obtained from other sources (other MLSs or non-participating brokers) to display the source.
Establish a maximum period after which Registrants’ passwords must be changed or reconfirmed.
Allow non-principal brokers/sales licensees affiliated with MLS Participants to operate VOWs, subject to Participant consent, control and their mutual accountability.

38. VOW Time Line … Policy became effective on May 17, 2003.
Policy must be adopted and implemented by MLSs no later than Jan. 1, 2004.
Participants with existing VOWs have up to 180 days following the adoption and implementation of these policies by their MLS to bring their VOW into compliance.

39. The VOW Education Center: http://www.REALTOR.org
VOW Implementation
The VOW Education Center:

40. VOW Implementation VOW Policy Model MLS Rules FAQ’s
Technical Reference Documents
Other information

42. Thank You …