Welcome to the third post in our Compliance series, “Yours Truly, Compliance,” where we dive into some of the common misconceptions about the roles and responsibilities the CRMLS Compliance team has in your MLS. You can check out the previous Compliance blogs here.
The Rules and Policies that have been established at CRMLS are designed to place the power of regulation in the hands of users like you. Agents and brokers make up the entirety of our committees; they control the process that finalizes your everyday rules, and when we hear a concern about a rule, we take it seriously. We want to provide our users with clarity about the process, so let’s dive into some more of the misconceptions we hear about our Compliance team.
1. CRMLS doesn’t understand the real estate business, so their Rules and Policies are disconnected from real life.
Nothing could be further from the truth. The entire Compliance process is, from top to bottom, a creation of real estate practitioners like yourself. The NAR and CAR model rules from which the CRMLS Rules are derived are drafted and managed by the agents and brokers who make up the MLS committees at those organizations. Further, the CRMLS Rules and Policies — including which rules to enforce, how to apply them, and how much the fine amounts should be — are managed by our Rules Committee. All the
Rules Committee members are either agents, brokers, or association executives who represent each of our stakeholder associations of REALTORS. Finally, before any Rule or Policy is enacted, it is reviewed and voted on by the CRMLS Board of Directors, composed of (you guessed it) agents and brokers. This practitioner-guided process ensures that what Compliance does is directly applicable and relevant to the real estate business.
2. The Rules and Policies are too confusing, and that’s why agents and brokers get citations.
While we do have a lot of Rules, we don’t enforce everything in the Ruleset. The Citation Policy sets forth which Rules we enforce and, out of those 73 items, we only regularly deal with about 25 types of violations. And here’s something that might surprise you- over 65% of all citations we issue are for violations of just 5 specific (and actually simple) rules!
Even so, to help with any confusion, the Compliance team does everything in their power to help you avoid getting a citation. Compliance has conducted or joined in on over 200 video or in-person training events over the last 2 years. We also provide a wealth of information on the CRMLS website on all aspects of the Rules and Policies. Check out our numerous FAQs, videos, webinars, slide decks, quizzes and guides designed to help you stay in compliance.
While some of the Rules in the complete Ruleset may be daunting to read, less than 10% of all citations are sent out in relation to Rules that could be considered a bit more complex (such as copyright issues or Clear Cooperation). Most of our citations are issued on Rules that are easy to comply with. For example, the top violation resulting in a citation for the last 2 years is for Rule 14.4: Failure to Correct. This means that the Compliance team had already sent a warning of an impending citation if something in a listing remains uncorrected, but the recipient didn’t act on the warning and the listing still contained a violation days later.
The next most common violation is for Rule 8.3: Inaccurate Information/Auto Sold. While the nature of the sale can become pretty hectic near the point of escrow, it is vital that the agent or broker keep the integrity of the listing by personally confirming the accuracy of the information. The MLS has no way of knowing if anything changed after the estimated information was entered, and so it is the responsibility of the agent or broker to confirm what actually happened at the point of sale.
The best way to avoid these kinds of citations is by paying attention to CRMLS communications, so make sure the email you’ve set for Compliance is current, active, and checked often. It helps ensure that inquiry, warning, and citation notices reach you.
3. If I get a citation, I have no way to challenge it or tell my side of the story.
While CRMLS may issue the citations, we're not judge and jury all in one. We work with AORs to follow a thorough Citation Review policy, and anyone is allowed to plead their case. If you think you've been issued a citation in error, you have 20 calendar days to file a Citation Review Request along with any evidence that can support your claim. Once our citation team receives it, we begin an internal audit and any fines or penalties associated with the violation are put on hold and are not due until the review process is complete. If the review shows the citation was made in error, we withdraw it. If we believe the violation was warranted, we then kick it to your AOR for their review, where they look at both sides of the argument and make a judgment based on the supplied evidence.
Each volunteer AOR Committee member is a REALTOR® with industry experience. Committees handle reviews to their discretion, and you may appeal some decisions to your AOR Board of Directors. The full process is outlined here in the CRMLS Citation Policy and our Citation Review FAQ.
The final decision to uphold a challenged citation is not CRMLS’ – it is decided by your AOR Committee. But no matter the outcome, your information will not be reported or published, even to CAR or NAR.
4. I'm going to get in trouble with the California DRE.
It can be shocking to receive a violation notice, and you might be concerned about your “permanent record” and reputation. But don’t worry — CRMLS never makes anything that happens in our Compliance Department public. No warnings, citations, violations, or fines are ever shared with the California DRE (without a subpoena) and are always kept confidential within CRMLS. Further, the identity of anyone who has reported a violation is also kept confidential by CRMLS.
This discussion about citations might lead you to believe that agents and brokers are not very good at following the Rules, but don’t be mistaken by our message. To the surprise of most, the vast majority of our MLS data and users do not ever end up interacting with our Compliance Department, meaning that most of our users are doing an excellent job at keeping the integrity of the listings. To put that into perspective, less than 5% of the 520,000 new listings CRMLS received in 2022 were reported for potential violations. And what’s more, less than 1% of those listings had errors that resulted in a citation. That means you’ve all done a great job at providing accurate listing data for the MLS. By helping us to maintain the integrity of our listing information, you are supporting the effective practice of real estate at both the agency and consumer levels.
And with that, we wrap up “Yours Truly, Compliance.” Thank you for reading. We hope by clearing up misconceptions about our team you now feel confident in how CRMLS operates and empowered with the knowledge of how we work to ensure the best possible MLS experience.
If you’d like to know more, yes, even more, about compliance check out our FAQ.
Once you think you’re a compliance master, test your skills with our quiz and consult other compliance resources here.
This Post Has 4 Comments
Thank You For the info
I appreciate your blog posts on this. Many people feel the Compliance team is like the IRS. Scary and we can’t win against them. But education and prevention in both cases (IRS and MLS Compliance) is the key. Thanks!
Great job in clarifying all the misconceptions of the Compliance Department. I have been on the CRMLS Rules and Data Integrity committee for many years. It is made up of all volunteers. All REALTORS that work in the business everyday. I have seen suggested fine amounts get cut at the suggestion of the committee. The rules are there for a purpose, to make our MLS the most accurate source of information for all the users. I get upset when I pull up a listing and it says it is a 2 story when it is only one, or it has 4 bedroom but actually only 3 bedrooms. The list goes on. We can all work a little harder to make sure what we input is correct, from map location to private remarks. We should all take a little time and read the rules. It’s better to do it correctly, then get a violation notice. I appreciate all the hours our volunteers put in, so I can have the best system out there.
It is very important to always follow the ethical rules in order to avoid citations.