The business practice changes outlined in the National Association of Realtors’ (NAR) commission lawsuit settlement agreement,will go into effect on Aug. 17, 2024, according to a letter sent to members on Friday by NAR chief legal officer Katie Johnson.
Originally, the trade group had said the practice changes would go into effect in mid-July. In the letter, Johnson noted that NAR’s settlement agreement requires that practice changes are implemented no later than the date of the class notice. Per the preliminary settlement approval process, Aug. 17 is the earliest known date that the class notice could be sent out.
Multiple listing services that opted into the agreement have until Sept. 16, 2024, to implement policy changes and be considered as released parties, although Johnson and NAR recommend that all of the MLSs that choose to opt in should implement them by Aug. 17.
Johnson’s letter also outlined what these changes will look like and what revisions to NAR’s MLS policy handbook have been made. The changes include eliminating and prohibiting “requirement of offers of compensation in the MLS between listing brokers or sellers to buyer brokers or other buyer representatives,” as well as prohibiting “MLS Participants, Subscribers, and sellers from making any offers of compensation in the MLS to buyer brokers or other buyer representatives.”
The policy changes will require an MLS “to eliminate all broker compensation fields and compensation information in the MLS,” and “to not create, facilitate, or support any non-MLS mechanism (including by providing listing information to an internet aggregator’s website for such purpose) for Participants, Subscribers, or sellers to make offers of compensation to buyer brokers or other buyer representatives.”
The changes also prohibit the use of MLS data or data feeds to directly or indirectly establish or maintain a platform of compensation offers from multiple brokers or other buyer representatives. If an MLS participant violates this policy, the MLS will terminate the participant’s access to any MLS data and data feeds.
In addition, agents and brokers will be required to provide compensation disclosures to sellers. Prospective buyers and sellers, as well as all MLS participants working with a buyer, must enter into a written agreement prior to touring a property.
“We are announcing these important changes now to ensure NAR members and MLSs have ample time to prepare,” Johnson wrote.
According to NAR, the policy changes were reviewed by the MLS Emerging Issues and Technology Advisory Board and adopted by the NAR leadership team.