MLS ballot initiative is 'ill-conceived,' says Realtor lawyer

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MLS ballot initiative is 'ill-conceived,' says Realtor lawyer Ballot measure seeks to open up real estate data to consumers Thursday, December 22, 2005 By Glenn Roberts Jr. Inman News

The proponent of an effort to establish a statewide database for property listings in California said today that the planned system could be modeled after the successful privatization of a Web site registration service. David Barry, a San Francisco lawyer who has aggravated real estate industry groups for filing a steady stream of antitrust lawsuits that span several decades, is behind this effort to establish a comprehensive property listings database that consumers can access free of charge. According to the text of the proposed ballot initiative, "Visitors to the open MLS Web site may access non-confidential MLS data and utilize search functions for free. All search reports are downloadable and printable for free." While MLS data in California is divided amongst dozens of local MLSs -- most of them owned by local Realtor trade groups -- the new proposal would require that all real estate professionals in the state place their listings in the statewide MLS, unless home sellers specifically request to withhold information about their properties from this database. Barry's plan calls for a private entity to manage the MLS for the first 10 years, and to keep monthly fees between $20 to $50 per month to enter property information into the MLS. The idea, he said, is similar to a technology company's handling of Web site registrations. In 1993, Network Solutions Inc. won a federal contract to handle the registration of Internet domain names, a duty that had formerly been conducted by the Internet Network Information Center, a U.S. government-created registry. The company lost that monopoly in 1999 but still handles millions of registered domain names. "They had a monopoly for a limited period of time ... to kick-start the thing, get it up and running," Barry said, adding that he is hoping some big technology companies -- such as Yahoo!, Google, eBay or Microsoft -- will consider bidding for the contract to operate the proposed statewide MLS service. June Barlow, vice president and general counsel for the California Association of Realtors trade group, which has about 180,000 Realtor members throughout the state, said today that she believes Barry's effort is "ill-conceived." "We're always looking for ways to make the (MLS) system more efficient and we do acknowledge that it could be more efficient," Barlow said, adding that the free market should develop the solution "as opposed to people trying to legislate their business model through the initiative process. "There's no need for an effort like this because free enterprise has worked well for a number of years," she also said. What the initiative proposal is seeking could be accomplished outside of the initiative process, Barlow said, adding that it "shows a lack of confidence" in attempting to place the issue before voters. "You can certainly do any kind of business without the initiative process."   Barry has targeted the state association of Realtors and other local Realtor associations several times in lawsuits he has filed. In September, the state Realtor group fired back against Barry with a "malicious prosecution" lawsuit, charging that Barry re-filed the same complaint twice.   Barry said he plans to be a bidder for the entity that he is proposing to create, and the bidding process is slated to close Jan. 11, the law firm announced Wednesday.   To qualify for the ballot, Barry said that initiative supporters will need 373,700 signatures. If obtained through signature firms at a rate of $1.50 to $2 per signature, it would cost about $1 million to qualify the initiative for the ballot, he said, adding that he expects the contract winner to pay this cost.   "I'm hoping to encourage innovation here," Barry said, adding that he has received mostly positive feedback from industry professionals about his proposal.   The text of the proposed initiative states that the purpose of the initiative is to "induce the creation of an open MLS in California and the United States of homes for sale and rent that provides free access by Web browser to buyers and renters," "to lower the cost of MLS services for real estate professionals," and to "lower commission rates," among other aims.   "Any person will be permitted to establish a paid subscriber account with the open MLS operator," and subscribers -- who do not need a real estate license -- can enter an unlimited number of property listings, the initiative text also states. "Subscribers will be required to agree that all persons have the fair use right to unlimited copying and republication of all MLS data, including visual and auditory data, when used as part of an effort to market, promote, or value real estate, and all such use will be free of all copyright claims and restrictions."   Such language may worry real estate brokers, who typically are protective of property information associated with their companies' listings. Data ownership and control issues are a hot topic in the real estate industry, particularly as the U.S. Justice Department has filed an lawsuit against the National Association of Realtors over the trade group's policies for the online sharing and dissemination of property listings among its members.   Industry players in California have discussed the possibility of a more widespread sharing of property listings information in California, and there are already some regional efforts in the San Francisco Bay Area and in Southern California through which local MLSs share data with other local MLSs. The discussion of more widespread data-sharing in the state "is making some progress -- more so than in any other year," Barlow said.