Larson/Sobotka's VOW clearinghouse

"Checklist" outline of NAR VOW policy after settlement of the DOJ/NAR lawsuit

This page provides a breakdown of VOW policy provisions on the basis of checklists of things that MLSs, brokers/salespeople ("Participants" according to the policy's terminology), and broker technology/marketing partners must or should do in light of the NAR VOW policy. Provisions of the policy are grouped here according to the players whose interests they address and to the mandatory or optional nature of their effects. Other outlines provide breakdowns based on the provisions' order in the policy and based on provisions' relationships to certain topics.

Clicking on the link relating to any policy provision will open a new browser window containing that provision and commentary on it.

Contents of this page

1. All Players
2. MLSs
3. Participants Operating VOWs
4. Listing Brokers
5. AVPs: Broker Technology/Marketing Partners

All Players

Policy I.1. Definition of VOW

Policy I.1.a. Definition/use of AVP (including broker right to work with AVP)

Policy II.5.f. This provision strictly limits the use of data for VOW purposes.

MLSs

Required activities

1. Understand brokers’ “drill-down” options and anticipate that single-office firms may express concern or displeasure regarding “drill-down” sites of multi-office firms.
2. Ascertain what state law requires for the formation of broker/consumer relationship. Are disclosures required? Is a contract required?
3. Develop a process for receiving, evaluating, and granting broker/AVP requests for data feeds, recognizing that each broker/salesperson may have multiple VOWs under Policy Section II.7.
4. Prepare to provide a persistent download upon participant request. The download must include all non-confidential listing information.
5. Review MLS data feeds to ensure that at least one meets the requirements of Policy Sections III.2. and III.4.; or develop a new data feed if necessary.
6. Assess the costs that MLS has incurred or will likely incur in providing a data feed that meets the policy's requirements. Assess the number of feeds to which brokers/salespersons will subscribe. (This will likely be a guessing game, to some extent.) Establish a fee. (This is a required activity in that even if your MLS charges no fee, it is effectively setting a fee.)
7. If MLS chooses to classify any fields or statuses as "confidential," it should change any “customer output” formats or the like from the MLS system to exclude the confidential field(s) or status(es). It should add the word “CONFIDENTIAL” prominently to any output format including the confidential field(s) or status(es).
8. If MLS chooses to impose the optional display restrictions permitted under Policy Section IV.1., it should change any output formats or the like from the MLS system to conform to these requirements.

Activities Larson/Sobotka recommends

1. Communicate to all brokers the fact that they do not have a right of consent or "opt-out" with regard to other participants' VOWs.
2. Revise standard data feed/access forms/contracts for feeds for salesperson VOWs (if MLS does not already permit them).
3. Review fees for data feeds and consider whether there are any greater or lesser costs associated with salesperson feeds than principal broker feeds.
4. Determine whether a principal broker feed to an AVP working with the broker can be used by the AVP to build VOWs for individual salespeople in the same firm.
5. Determine whether increased enforcement resources will be necessary if number of salesperson VOWs increases significantly.
6. Develop a standard form for use by brokers (though they would be permitted to use another form of their own design consistent with the rules) for gathering seller opt-outs where applicable under Section II.5.a-b. MLS may want to include options on the same form for the seller to opt out of commentary and AVMS under Section II.5.c.
7. Add fields to the MLS listings to track which listings and which addresses are withheld from the “Internet” under Section II.5.a-b. This may practically be essential if the MLS cannot send such listings (or addresses) to Realtor.com, etc. VOW-operating brokers will need to have a means for determining which listings/addresses cannot be displayed.
8. Add fields to the MLS listings to track which listings have automated valuation or commentary excluded from them. (They should probably be two separate fields, as the seller appears able to opt out of one or the other or both.)
9. Decide whether to require brokers to maintain an audit trail of registrants’ activity on VOWs.
10. Develop a license agreement for broker and AVP to sign pursuant to Policy Section III.10.g. Note that the agreement must be consistent with the other provisions of Section III.10.
11. If you have not already done so, create a field for “showing instructions” and/or a field for “property access information” that contains confidential information about accessing the property. Classify these fields as confidential.
12. Implement the requirement that VOWs display an "information deemed reliable but..." type of disclaimer, recognizing that doing to imposes the requirement on all disclosures by brokers of listing data to consumers, whether in the VOW context or otherwise.

Optional activities

1. Decide, under Section III.6. of the Policy, whether to require brokers to retain an audit trail for VOWs.
2. Decide, under Section IV.2.b. of the Policy, whether to require passwords to expire within a certain timeframe. (MLS cannot set a timeframe less than 90 days.)
3. Create a model Terms of Use for use by brokers that satisfies the requirements of the policy and functions as a “safe harbor” for brokers who use it; i.e., brokers who use it will be deemed compliant with the MLS policy. MLS probably cannot require the brokers to use a particular form of agreement or even to use particular provisions drafted by MLS.
4. Consider developing a model on-line representation agreement for brokers. Recognize that MLS cannot impose the use of such an agreement on brokers.
5. Consider whether any specific measures should be required as part of “reasonable efforts" to prevent misappropriation under Section II.4.
6. If permitted, consider whether to require that the last update date/time be displayed on the VOW.
7. Consider developing a model privacy policy for brokers to use that meets this requirement of the policy and that takes into consideration some of the general legal issues associated with privacy policies.
8. If permitted, decide whether to require brokers to disclose to consumers on the VOW that some listings are excluded from the VOW.
9. Develop a standard procedure for reviewing new VOWs when the MLS receives notice of them. This permits the MLS to nip problems in the bud, though it comes at a fairly high enforcement cost.
10. Decide whether to provide a transient download capability.
11. Decide whether to require brokers to use security protection, and decide what level of protection to require. Note that MLS must use the same or greater measures.
12. Review your MLS rule enforcement procedures and consider adopting a streamlined approach consistent with Policy Section III.10. In the absence of specific procedures for enforcing MLS rules, NAR policy requires that the MLS use procedures set out in the NAR Code of Ethics and Arbitration Manual. That procedure is probably too cumbersome to be really effective for most MLS rules, and it may not provide for staff-initiated or anonymously initiated complaints (which should probably be permitted provided the MLS has facts available to evaluate the complaints).
13. Decide whether to impose these optional display restrictions allowed in Policy Section IV.1.a., with the understanding that making them confidential means that brokers cannot disclose them to consumers by any means, even outside the contexts of the VOW. Recognize that there are VERY FEW statuses or fields that brokers will tolerate not being able to disclose to their clients.
14. Decide whether to impose the optional display restrictions permitted under Policy Section IV.1.b., with the understanding that doing so means that brokers must abide by them in disclosures to consumers by any means, even outside the contexts of the VOW.
15. Decide whether to implement the requirement that listing broker name be displayed on listings on VOWs, recognizing that doing so imposes the requirement on all disclosures by brokers of listing data to consumers, whether in the VOW context or otherwise.
16. Decide whether to implement the requirement that listing agent name be displayed on listings on VOWs, recognizing that doing so imposes the requirement on all disclosures by brokers of listing data to consumers, whether in the VOW context or otherwise.
17. Decide whether to implement the limit on the number of listings returned in a consumer search on a VOW, recognizing that doing so imposes the requirement on all disclosures by brokers of listing data to consumers, whether in the VOW context or otherwise.
18. Decide whether to require the sources of data other than MLS listings on the VOW must be identified.
19. Decide whether to impose a time limit for registrant passwords to expire. (It can be no shorter than 90 days.)
20. Decide whether to impose the co-mingling limitations allowed under Policy Section IV.3.

Participants operating VOWs

Required activities

1. Ascertain what state law requires for the formation of broker/consumer relationship. Are disclosures required? Is a contract required?

2. Revise your registration routine to conform to the policy.

3. Ensure that your registration routine does not provide access to the consumer until after she has clicked on a confirming link in the email your site sends her.

4. Understand limitations on “drill-down” sites and implement appropriate technology to meet local MLS requirements.
5. Configure VOW registration interface to require the following:
1. Each registrant has a unique user name at time of registration.
2. Registrant chooses user name and password or VOW assigns it (at VOW-operating broker’s option).
3. An email address may be associated with only one user name and password.
6. Configure passwords to expire on some definite date in the future, and configure a means for the consumer to renew the password. (Option: consider emailing a notice warning the consumer her password is about to expire.)
7. Inquire whether MLS has decided, under Section IV.2.b. of the Policy, to require passwords to expire within a certain timeframe. (MLS cannot set a timeframe less than 90 days.) If so, cause passwords to expire on the interval required by MLS.
8. For each registrant, maintain the following until at least 180 days after expiration of the user name’s password: name, email address, user name, and password. (Note: The VOW’s privacy policy, required under Policy Section II.5.g., should inform the consumer of the possibility that this information will be disclosed to the MLS.) Be prepared to provide this information to MLS at its request.
9. Inquire whether MLS has decided, under Section III.6. of the Policy, to require brokers to retain an audit trail for VOWs. If so, implement the necessary logging capabilities. (Note: The VOW’s privacy policy, required under Policy Section II.5.g., should inform the consumer of the possibility that this information will be disclosed to the MLS.) Be prepared to provide this information to MLS at its request.
10. Employ a terms of use agreement that meets the requirements of the policy.
11. Do not attempt to “fold” the terms of use agreement into a representation agreement or agreement that requires the consumer to pay any fees. (The VOW may be able to present a second screen that requires the consumer to enter such agreements, subject to Policy Section and to state law.)
12. If your VOW will establish a representation relationship or an obligation on the consumer’s part to pay you some sort of fee, be sure that it meets the requirements stipulated in the policy.
13. Design VOW to include contact information as required in Section II.3.
14. Assign licensees (or other personnel in states that do not require a licensee to field such questions) to respond competently to inquiries under Section II.3.
15. Ensure that your systems know how to identify listings and addresses the seller wishes to withhold from the Internet. Do not display them on the VOW.
16. Ensure that your systems know how to identify listings where the seller has requested no automated valuation or commentary. Do not display commentary or automated valuation next to those listings on the VOW.
17. Deploy a means for other brokers to communicate problems with your display of their listings.
18. Update data from each MLS at least once every three days.
19. Develop and post a privacy policy. This should not be an afterthought. The Federal Trade Commission has taken action against a number of businesses that have acted inconsistently with their posted privacy policies. The FTC has a good article on privacy policies; the agency’s site provides other resources, as well.
20. When drafting your privacy policy, be sure to note in it that you may disclose information to the MLS under the provisions of Policy Sections II.2.b. and III.6.(2).
21. Unless the MLS has specified a timeframe for the notification, notify the MLS early in the development process that you are building a VOW.
22. Consult with MLSs where you are operating and learn whether they have required security measures; adopt them, if necessary.
23. Consult with MLSs where you are operating and learn whether they have required audit trails; adopt them, if necessary. Be sure to make it clear in your privacy policy that you may disclose personal information about consumers to MLS under certain circumstances.
24. Make sure that you have provided written notice to each MLS for each and every AVP working with your firm and any agents in it, pursuant to Policy Section III.10. If MLS has a required license agreement for this purpose, ensure that you have reviewed it, signed it, and retained a copy for your files.
25. Ascertain whether MLS has imposed the optional display restrictions permitted under Policy Section IV.1. If so, be sure to implement them.
26. Ascertain whether MLS has imposed the optional display restrictions permitted under Policy Section IV.2. If so, be sure to implement them.
27. Ascertain whether MLS has imposed the co-mingling limitations allowed under Policy Section IV.3. If so, be sure to implement them.

Activities Larson/Sobotka recommends

1. Recognize that you are responsible for your AVPs' conduct
2. Determine brokerage firm policies regarding salespeople operating VOWs. Note that permitting this practice imposes on the brokerage firm a duty to oversee, supervise, and be accountable for each salesperson site.
3. Consult with VOW provider about what “reasonable efforts” might be to prevent misappropriation under Section II.4. Monitoring user accounts for long or repetitive accesses, or multiple and frequent user accesses from a small range of IP addresses might be examples.
4. Update data much more frequently than the minimum required level of once every three days.
5. Make a written request of each MLS in which your firm participates to receive a persistent and/or transient download of all of that MLS's listing data.
6. Evaluate the downloads MLSs are providing to determine whether further information (additional fields and statuses, other types of data, like listing history records, etc.) should be available in the feeds.
7. Assess the data feed you are currently receiving, if any, to ensure that it meets the requirements of Section III.4. and provides all the data described in Section III.2. If your MLS creates a new data feed for VOW use, ensure it meets the requirements of these sections.
8. Inquire of all MLSs in which you operate to ascertain what the fees will be. Note that fees are subject to Policy Section III.5.
9. Revise existing VOWs or VOW designs to keep co-branding and advertising within the safe-harbor limits of Policy Section III.7.
10. Obtain from your MLS a list of all fields and statuses, if any, it has classified as confidential under Policy Section IV.1.a.
11. If your MLS has imposed any of the optional display restrictions permitted under Policy Section IV.1., you may want to check to see whether it has really imposed the same requirement on disclosures of MLS data via other media. The MLS may not impose these requirements on a VOW unless they are imposed on everyone.

Optional activities

1. Consult attorney regarding other provisions that should appear in terms of use.
2. Consider whether your VOW will exclude listings with certain characteristics from display.
3. Whether or not the MLS requires it, consider whether to disclose that your VOW is displaying fewer than all the available listings. Doing so may be advisable (though perhaps not required, depending on state law) in the context of an agency or other relationship with the consumer. It is also just good business to be up-front with your clients/customers.

Listing brokers

Required activities

1. Identify to MLS the listings of sellers who do not want their listings or addresses on the Internet (Sections II.5.a-b.), and who do not want commentary or automated valuations associated with their listings (Section II.5.c.).

Activities Larson/Sobotka recommends

1. Determine your brokerage firm policies regarding salespeople operating VOWs. Even if your firm elects not to operate a VOW, your salespeople may wish to operate them.

Optional activities

1. Explore the VOWs of your competitors to determine whether they are displaying your listings according to MLS's rules. You are permitted to do this under Policy Section II.2.c.

AVPs: Broker Technology/Marketing Partners

Required activities

1. Ascertain what state law requires for the formation of broker/consumer relationship. Are disclosures required? Is a contract required?
2. Revise your registration routine to conform to the policy.
3. Ensure that your registration routine does not provide access to the consumer until after she has clicked on a confirming link in the email your site sends her.
4. Understand limitations on “drill-down” sites and implement appropriate technology to meet local MLS requirements.
5. Configure VOW registration interface to require the following:
1. Each registrant has a unique user name at time of registration.
2. Registrant chooses user name and password or VOW assigns it (at VOW-operating broker’s option).
3. An email address may be associated with only one user name and password.
6. Configure passwords to expire on some definite date in the future, and configure a means for the consumer to renew the password. (Option: consider emailing a notice warning the consumer her password is about to expire.)
7. Inquire whether MLS has decided, under Section IV.2.b. of the Policy, to require passwords to expire within a certain timeframe. (MLS cannot set a timeframe less than 90 days.) If so, cause passwords to expire on the interval required by MLS.
8. For each registrant, maintain the following until at least 180 days after expiration of the user name’s password: name, email address, user name, and password. (Note: The VOW’s privacy policy, required under Policy Section II.5.g., should inform the consumer of the possibility that this information will be disclosed to the MLS.) Be prepared to provide this information to MLS at its request.
9. Inquire whether MLS has decided, under Section III.6. of the Policy, to require brokers to retain an audit trail for VOWs. If so, implement the necessary logging capabilities. (Note: The VOW’s privacy policy, required under Policy Section II.5.g., should inform the consumer of the possibility that this information will be disclosed to the MLS.) Be prepared to provide this information to MLS at its request.
10. Employ a terms of use agreement that meets the requirements of the policy.
11. Do not attempt to “fold” the terms of use agreement into a representation agreement or agreement that requires the consumer to pay any fees. (The VOW may be able to present a second screen that requires the consumer to enter such agreements, subject to Policy Section and to state law.)
12. If your VOW will establish a representation relationship or an obligation on the consumer’s part to pay you some sort of fee, be sure that it meets the requirements stipulated in the policy.
13. Design VOWs to include contact information as required in Section II.3.
14. Ensure that your systems know how to identify listings and addresses the seller wishes to withhold from the Internet. Do not display them on the VOW.
15. Ensure that your systems know how to identify listings where the seller has requested no automated valuation or commentary. Do not display commentary or automated valuation next to those listings on the VOW.
16. Deploy a means for brokers to communicate problems with your display of their listings.
17. Update data from each MLS at least once every three days.
18. Ensure that each of your broker clients adopts a privacy policy on its site.
19. Unless the MLS has specified a timeframe for the notification, notify the MLS early in the development process that you are building a VOW.
20. Consult with MLSs where you are operating and learn whether they have required security measures; adopt them, if necessary.
21. Consult with MLSs where you are operating and learn whether they have required audit trails; adopt them, if necessary. Be sure to make it clear in your privacy policy that you may disclose personal information about consumers to MLS under certain circumstances.
22. Make sure that each of your broker customers has provided written notice to each MLS with which is works regarding your role as AVP, consistent with Policy Section III.10. If MLS has a required license agreement for this purpose, ensure that you have reviewed it, signed it, and retained a copy for your files.
23. Ascertain whether MLSs have imposed the optional display restrictions permitted under Policy Section IV.1. If so, implement them.
24. Ascertain whether MLSs have imposed the optional display restrictions permitted under Policy Section IV.2. If so, implement them.
25. Ascertain whether MLSs have imposed the co-mingling limitations allowed under Policy Section IV.3. If so, implement them.

Activities Larson/Sobotka recommends

1. Consider business opportunities to offer salesperson sites.
2. Recognize that MLS/broker will probably require a separate contract for each salesperson VOW the AVP will operate.
3. Make sure AVP has means to compare its active customer list with MLS’s active roster of participants and subscribers. VOWs relating to lapsed participants subscribers should be turned off immediately to prevent violating MLS policies and contracts AVP has signed.
4. Consult attorney regarding other provisions that should appear in terms of use.
5. Consult with broker clients about what “reasonable efforts” to prevent data misappropriation might be under Section II.4. Monitoring user accounts for long or repetitive accesses, or multiple and frequent user accesses from a small range of IP addresses might be examples.
6. Update data much more frequently than the minimum required level of once every three days.
7. Help your broker/salesperson clients prepare written requests of each MLS in which they participate to receive a persistent and/or transient download of all of that MLS's listing data.
8. Evaluate the downloads MLSs are providing to determine whether further information (additional fields and statuses, other types of data, like listing history records, etc.) should be available in the feeds.
9. Assess the data feeds you are currently receiving, if any, to ensure that they meet the requirements of Section III.4. and provide all the data described in Section III.2. If any MLS with which you work creates a new data feed for VOW use, ensure it meets the requirements of these sections.
10. Inquire of all MLSs in which you operate to ascertain what the fees will be. Note that fees are subject to Policy Section III.5.
11. Revise existing VOWs or VOW designs to keep co-branding and advertising within the safe-harbor limits of Policy Section III.7.
12. Ensure that your broker client obtains from her MLS a list of all fields and statuses, if any, the MLS has classified as confidential under Policy Section IV.1.a.
13. If any MLS where you work has imposed any of the optional display restrictions permitted under Policy Section IV.1., you may want to check to see whether it has really imposed the same requirement on disclosures of MLS data via other media. The MLS may not impose these requirements on a VOW unless they are imposed on everyone.

Optional activities

1. You may wish to develop a model privacy policy for brokers to use that meets this requirement of the policy and that takes into consideration some of the general legal issues associated with privacy policies. When drafting your privacy policy, be sure to note in it that you may disclose information to the MLS under the provisions of Policy Sections II.2.b. and III.6.(2).
2. Consider whether your VOW tools will permit the VOW-operating broker to exclude certain listings from display.