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New marketing strategies may be problematic By Sylvia Golden Norris, Esquire RASM Legal Counsel

A number of new marketing strategies are becoming more popular with Realtors®. These different approaches to advertising an Owner’s property for sale include what are often referred to as “pocket listings”. A pocket listing is any listing that is not distributed in the MLS. Examples include private listing groups (whether established by social media, the internet or even invite only get-togethers), exclusive office listings or “coming soon” notices or ads. All methods of marketing property for sale in a manner that does not include the MLS or that otherwise targets only a limited audience are susceptible to an inference that you are not promoting the Owner’s best interest, which is to sell his or her property quickly at the highest price possible. While none of these marketing strategies are inherently unlawful or immoral, there can be unintended negative consequences for you as a Realtor® when you do not market through the MLS. For example, you may have violated one or more Articles of the Code of Ethics, breached your statutory duties under Florida law or your contractual obligations under the listing agreement, or subjected yourself to a Fair Housing claim or MLS citation. Any of these could result in a fine, a lawsuit or an Ethics or DBPR complaint. Below are precautionary considerations to assist you in meeting your duties to the Owner, satisfying your professional obligations when providing listing services and avoiding any adverse outcome. Florida Law and the Listing Agreement Chapter 475, Florida Statutes, requires real estate licensees, regardless of the type of brokerage relationship offered, to “use skill, care and diligence” and “deal honestly and fairly.” Also, most Listing contracts, including FLORIDA REALTORS® forms, require you “to make a diligent and continued effort to sell the property” and state that the Broker must file and will publish all listings, unless the Owner directs otherwise. When the MLS is not used to advertise a property, an Owner may later assert that you did not meet these obligations because a pocket listing may provide limited exposure. The MLS Rules The vast majority of listings are filed and distributed in the MLS. The MLS provides broad exposure for listed properties as they are published to all MLS Participants, currently totaling 42,000 subscribers, throughout 17 counties. None of the other alternative marketing methods can compete with the widespread promotion of the Owner’s property which the MLS offers.

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Further, Article 5.11 of the MLS Rules requires you to file all listings with the MLS. If, after full disclosure, an Owner decides not to place the property into the MLS or to delay insertion in the MLS, for your protection and as required by Rule 5.11, you must still file the listing with the MLS, but the Owner can stipulate to exclude the listing from publication to the MLS Participants. For this option to be exercised, however, you should file the listing along with the Owner’s Waiver of MLS Entry form http://www.mfrmls. com/resources/document-library/doc_download/1113owners-waiver-of-mls-entry (or a writing to the same effect). The deadline to file the Waiver is within 2 business days, excluding weekends or federally recognized holidays, from the Owner’s dated signature or the beginning date of the listing agreement, whichever is later. To be effective the form/writing must be signed by all owners of record and both the Listing Agent and Listing Broker. This form or writing serves as your proof of the Owner’s directive not to publish the property in the MLS. Failure to follow this mandate results in an automatic fine of $500 for each occurrence. Fair Housing While you did not intend to discriminate against a protected class (including senior citizens, handicapped individuals or racial minorities), you may have violated Federal and Florida Fair Housing laws as well as the Code of Ethics. How? Because in June 2015, the U.S. Supreme Court held that a claim for a violation of the Fair Housing Act can be brought if a practice results in a disparate impact for a class of persons protected under the FHA. Further, the claimant is not required to prove any intent to discriminate, only that the action took place and it resulted in discrimination. Therefore, if your business practice regularly incorporates pocket listings, if this action is found to result in a bias in housing access, you could be the target of a Fair Housing claim. To conclude, if you employ pocket listings as a regular marketing strategy or your listings are not typically published in the MLS, while neither practice is illegal nor unethical, be sure you understand the risks and you have met your burden for full transparency and accurate disclosure. You have the responsibility to provide a comprehensive statement of all negative effects that could occur, such as a lower sales price due to a lack of competition. Finally, even if the Owner has been advised of the adverse aspects of marketing their property in this manner, the decision to exclude the listing from the MLS must be based solely on whether these marketing methods are in the Owner’s best interest.

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