Open Letter to Minneapolis Area Association of Realtors Regards RMLS Ruling 13

by Russell Shaw

Mega-Producing Realtor

Author website

The following was sent to me by Steve Westmark. He was the very first agent interviewed by Howard Brinton for what is now known as Starpower. He is a very nice man, who spends a great deal of his time (and money) working for Habitat For Humanity. He and the other agents using the term “MLS” in their URL got a very raw deal from the shortsighted people who sit on the Board of Governors for the Minneapolis Area Association of Realtors.

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Open Letter to Minneapolis Area Association of Realtors

Regards RMLS Ruling 13

My name is Steve Westmark, a long-time agent with Counselor Realty and prior to my resignation September 2006 a long-time member of the Board of Governors at the RMLS of MN (the “Board”). Because I am, and have always made my living as a practicing Realtor, I can say that my goal while serving on the board has been to protect the interests of “practicing Realtors” as my 1^st priority (not necessarily for brokerage “owners and operators”). In July of 2006 I made a very difficult decision to resign my position on the Board in a last resort protest of Rule 13 because I believe the Rule is not in the best interest of Realtors.

I have spoken with many of you (my fellow members), there seems to be a number of misconceptions for my resigning from the Regional Board of Governors of the RMLS, and the ensuing lawsuit protesting Rule 13. I am writing the open letter in hopes that you will better understand why I believe Rule 13 is a detriment for all Realtors.

My History

I served and was Chairman of the MAAR MLS Committee for nearly a decade. I was involved with the task force to bring the Regional MLS into existence. As a Governor for RMLS I have served on the Technology Sub Committee, Executive Board, been involved with vendor selections, task force for bringing on new executive, but most of all wanting to be a representative for the real estate practitioner whose day-to-day use of the term “MLS” is vital and the main source for information for their clients. My source of income is from selling real estate, not managing or owning a real estate company.

Rule 13

When the Ruling 13 discussions were 1^st started it was to be that all companies and agents with “MLS” in their domains would be grandfathered. So originally I thought that, since others agents and I would not be affected by the Rule, I did not object. In hindsight, I think that every existing member should be allowed to “MLS” in there website name (domain). I’m not aware of anyone that used “MLS” in their website names did for any ill intent. Members who used “MLS” in their website names were marketing and spending money on brand identity and they were following all existing rules put in place by our Realtor organizations and therefore it is permissible.

Before or after the ruling, as a Governor, I am not aware that our Board of Governors did any research on this subject with the public or Realtors. Our executive officer has written a white paper on the reason for the ruling in place because “the public is being harmed”– but there is no research to prove that. In fact, Rule 13 goes so far to disallow us member Realtors to use the term “MLS” on our internet sites and marketing materials, yet Rule 13 cannot control vendors outside the Realtor community from freely using the term “MLS” in their marketing. That is because “MLS” or Multiple Listing Service is not trademarked. The Multiple Listing Service in Canada is trademarked, but “MLS” in the USA is not. Now within the sports realm, Major League Soccer has protection. So, even today with the Rule 13 after the lawsuit and settlement, RMLS has taken away the rights of the Realtor to use “MLS” and yet all the other companies outside the Realtor community, such as. HomeGain, House Values, Lending Tree, Yahoo may freely use “MLS” in all their marketing to capture leads and sell those leads back to Realtors for a fee!

I have no financial gain from this lawsuit. I worked within the system for 5 months before making the decision to leave the Board. No research had been done on the affects of Rule 13 Players outside the Realtor community that are using “MLS” in their domains gain from the freedom to use a non trademarked “MLS”. We, independent contractors are prohibited from competing with internet giants for our own leads. At RMLS Board meetings I found very few members of the Board wanted research that would demonstrate the effect of such a rule. Before I resigned and hired legal counsel, I called on both the RMLS Executive Officer and Chairman to please reconsider and to put off (or change) the ruling. They would not answer my urging to discuss the matter but was told that I “should do what I need to do”, their mind was made up, and that they would not consider any change. The Governors had voted, the subject was closed, and they were going ahead with it. There is no monetary reward in this suit. The members of this suit settled with the RMLS, it was with our own dollars that we paid attorney fees to reach a compromise to the Board ruling of Rule 13.

In our meeting with the Federal Magistrate Judge in September of 2006, the Judge asked why I was fighting this. I explained that I was present to represent the agents of the RMLS. She told me that none of them were here to object to Rule 13 and I should just settle this for my self. My intension was to settle to the best of my ability, but whatever settlement was reached, I expected the RMLS would apply to ALL agents affected by the ruling. I am grateful that the Executive Officer of the RMLS agreed to allow the use of MLS in EVERYONE’S existing web addresses through the end of 2008. I am grateful to Magistrate Judge Nelson who mediated the settlement; she was a tremendous asset to all sides.

Now that the ruling is in place, agents with “MLS” in their domains can redirect until December 31^st, 2008 and use up all advertising materials that they had in place prior to Rule 13. Agents will have time to respond to a ruling that penalizes them. There is no compensation for having to shut down their existing web sites that use “MLS” in them.

Yahoo.com, mlsonline.com (not themlsonline.com), mls.com, mls.net and others, are owned and operated by Non-realtor Companies that sell leads back to agents and brokerages for monthly fee, referral fees, pay for click, or any profitable combination. You will find that many national non-Realtor real estate web sites use terms ‘search the MLS’ and “see homes on the MLS” directing the leads to broker web sites that are part of the RMLS. What the RMLS Board of Governors has done is PROHIBIT Realtors to use “MLS” in our website names, but allows those who DO NOT belong to the local MLS (3^rd parties) to go after agents or brokerages to pay referral fees to them because that cannot be restricted from using the term “MLS”. Rule 13 disallows Realtors from using “MLS” in their URL, but cannot restrict outside vendors for using it. We are prohibited from competing with national vendors. It is vital that the National Association for Realtors MLS Committee decide on a new name for our service (e.g. Realtors Information Network — RIN) and TRADEMARK it for use INSIDE our industry, and restrict use from outsiders. Our Realtor trademark has been protected and is continued to be protected. We need to protect a term like “MLS”, we need a new name for MLS NOW, and begin using, protecting, and adapting to use of the new name immediately.