Navigating New Antitrust and MLS Rules in Colorado Real Estate

September 18, 2024
by Blake Gabriel

A Brokers Guide for Navigating Colorado’s New Antitrust Requirements and MLS Rules

Significant changes are reshaping the real estate landscape following the National Association of REALTORS® (“NAR”) Settlement Agreement entered into on March 15th, 2024 (the “Settlement Agreement”), updated state regulations, and new Multiple Listing Service (“MLS”) rules. These new requirements are designed to eliminate anticompetitive practices, particularly around broker compensation information. This guide is intended to help brokers generally understand these changes and provide some practical steps to ensure compliance.

Key Changes You Need to Know

No Compensation Information in MLS: Compensation details, including cooperative commissions, can no longer be included in MLS listings. This change ensures that search results remain unbiased and are not influenced by compensation-related factors.
No Filtering by Compensation: Brokers are prohibited from filtering search results based on cooperative commissions, maintaining a fair playing field for all listings.
Careful Communication: Brokers can still communicate compensation details through appropriate channels. However, these communications must comply with the Settlement Agreement and avoid any anticompetitive behavior.

Colorado Real Estate Commission’s Updated Mandatory Forms

In response to the Settlement Agreement, the Colorado Real Estate Commission (“CREC”) published updated mandatory forms which went into effect on August 15th, 2024. These forms are designed to ensure compliance with new requirements and must be used correctly to avoid legal issues. You should consult an attorney who is familiar with these new requirements and the updated CREC forms to ensure your compliance.

Practical Steps for Brokers

To adapt to these changes, you should consider the following steps:

Educate Your Team: Ensure that everyone in your brokerage understands the new requirements, the new CREC forms, and their importance. Regular training can help keep your team informed and compliant.
Review Marketing Practices: Evaluate and adjust your marketing practices to avoid any actions that could be perceived as promoting anticompetitive behavior.
Monitor Communications: Be cautious in how you communicate compensation information. Use appropriate, compliant channels, and avoid any practices that could be seen as collusive.
Use Updated Forms: Ensure you and your team are using the updated mandatory CREC forms. Proper use of these forms is essential for compliance.
Stay Updated: Keep yourself informed about any further regulatory changes. Staying current will help you adapt quickly and maintain compliance.

Consequences of Violating MLS Rules

Failure to comply with updated MLS rules can result in significant consequences. The severity and nature of these consequences can vary depending on the specific MLS rules and circumstances of each case. Potential penalties include:

Fines: Financial penalties that vary in amount based on the nature and severity of the violation.
Suspensions: Temporary suspensions from using MLS services, affecting your ability to access MLS data and conduct real estate transactions.
Termination of Access: In the most severe cases, termination of access to MLS data and data feeds, which can significantly hinder your business operations.

Additionally, failure to adjust your practices could lead to antitrust claims being brought against you, which is separate and distinct from MLS rule violations. MLS rules and their enforcement can vary widely. Always consult your attorney for advice tailored to your specific situation.

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