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Thursday, July 8, 2010

Should "MLS" (Multiple Listing Service) Be Trademarked ?

I actually cannot believe that it is not trademarked! Just as the moniker of "Realtor" is a trademark (which merely means that a real estate licensee is a member of the National Association of Realtors or NAR), so too should the term "MLS" (Multiple Listing Service) be a unique trademark and not a broad generic term used by anyone who aggregates or publishes lists of real properties for sale or lease.

The term "MLS" should be reserved for only licensed real estate professionals. The generic use of this term by unlicensed groups, individuals or entities is not only misleading the public to believe or have the impression that the listing site is run by knowledgeable and licensed real estate professionals; but can also be a violation of state laws regarding the advertising of real property for sale or lease. Generally, state laws stipulate that anyone who “lists or offers or agrees to list real estate for sale, lease, rental or exchange (or) assists or directs in the procuring of prospects” is a real estate broker. The law requires brokers to be licensed by the state. 

The basis for this or the underlying foundation is to protect the public from harm, fraud or incompetence that could come about in a bad transaction with an unlicensed non-professional where giving poor or incorrect advise on matters could be potentially serious and harmful. Cases in point: not advising someone about potential lead-based paint hazards, occupancy standards (# of people per size of dwelling), using a lower level area for sleeping or as a "bedroom" where there in no means of ingress/egress in the event of fire; "steering", redlining or blockbusting where violations of Fair Housing occurs, etc. There are some exceptions to state laws however for property managers or for publications, such as a newspaper, where advertising real estate is “incidental” to a larger business.

There have been many recent court cases involving web based listing services; ForSaleByOwner.com, ZeroBrokerFees.com, and ISoldMyHouse.com where the legal issue of whether or not these "MLS" type of repositories or "services" where substantively engaged in "real estate brokerage activities" for which a license is required. The proliferation of such "MLS" type of websites not only cuts into Realtors' business; but more importantly is potentially harmful to the public by placing consumers of real estate sales or lease transactions in the hands of individuals, groups or entities that lack proper training and knowledge of the complexities involved in a real estate transaction.

Therefore, I vehemently believe that the National Association of Realtors (NAR) should be aggressively seeking to trademark the term "MLS" so that it is not a watered-down broad or generic term; but when "MLS" is used, it does give the public the sense that such a web-based site or service is run or operated by a professionally licensed real estate practitioner or broker.

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