There’s always something to howl about.

NAR News From the Legal Front

Over the years, NAR has had its fair share of legal battles.  Currently, there are a few big and interesting cases involving NAR that could have dramatic impact on the real estate industry.  Here’s an update on three cases that are in the works. 

US vs NAR

This is the famous case brought by the Department of Justice (DOJ) against NAR’s Virtual Office Website (VOW) and Internet Data eXchange (IDX) policies.  (Note: NAR has changed the name VOW/IDX to Internet Listing Display or ILD.)  There are two main issues at the core of this suit which is likely to go to trial this summer.

  1. The IDX opt-out policy is what started the case.  The policy allows brokers a blanket opt-out option to keep their listings from being displayed any competitor’s web site.  NAR policy also allows brokers a surgical opt-out option where a broker can opt-out of a particular competitors IDX feed (e.g., I will not allow my listings to appear on Swann Realty’s site).  The DOJ thinks there should be no opt-out option and that ALL listings should be available for ALL brokers to display. 
  2. NAR policy, as proposed, only allows ILD privileges to brokers actively engaged in real estate sales and leasing.  In other words, anyone who simply gets the ILD data for the sole purpose of generating leads and is not otherwise involved in real estate would be banned from ILD.  The DOJ wants listing data to be like the water that flows from your tap – available to all.

(My prediction: split decision.  NAR wins on #1 and loses on #2)

David Berry vs the Entire REALTOR® Organization

I am NOT talking about Dave Berry the fabulous writer for the Miami Herald.  This is David Berry the lawyer who has made a career of suing NAR.  He has tried to have the term REALTOR® declared generic, attacked MLS membership rules, and numerous other wacky lawsuits.  Recently he tried to get a ballot initiative in Maine to legally require all listed properties for sale to be placed in his Open MLS system.  NAR and several state associations have fought many legal battles against Mr. Berry.  I cannot remember any victories for Berry over the years, but I would suspect he must of won at least one of the hundreds of suits he’s filed against NAR.

Now the California Association of REALTORS® is suing Mr. Berry for legal harassment.  If there ever was a case for “English Rule” where the loser pays, Mr. Berry would be the poster boy.

REAL vs NAR

REAL is a company that has established a patent on a basic search technique used for real estate on the web.  It is incredible to see what you can get a patent for today, but that’s another post for another day.  Anyway, REAL’s patent is something that is used by just about every real estate search engine in every MLS and national aggregation site.  Picture this web site :  a map of the entire country allows you to draw a circle and drill down to the state level.  Then another circle and you drill to the city level and then the street level.  Most MLS’s call that a parameter search.  REAL has filed a patent infringement lawsuit against everyone they can think of including NAR, REALTOR.com, individual brokerages, and a few large MLSs. 

Before I filed this post, I applied for a patent on the process of making comments on Blog posts, so just be forewarned that you could be included in my class action suit if you comment on this post.

Short Sale Disclosure Coming to an MLS Near You

In other “legal” news, NAR is working on policy that would allow MLSs the option to require the disclosure of a probable short sale in the MLS.  The thought is that a short sale is a pertinent fact that a buyer has the “right” to know.  Based on Virginia disclosure laws, I’d agree, but of course there are lots of caveats to disclosure.  In any case, the policy will be optional to local MLSs and not a mandate from NAR (at least that is the current thinking).

(This post is based on my notes form a legal briefing during a recent NAR meeting.  It is simply my account of the presentation and not based on any official release from NAR.)