The business practices and regulations of REALTORS® have been changing—and not just through associations. Since the National Association of REALTORS® (NAR) settlement, MLS participants have been required to sign a written agreement with a buyer before touring a home. Yet, recently, Alabama has passed a law specifically saying such an agreement is not required in the state.
Looking across other state legislatures, here are some bills that are in consideration—or recently passed—that have introduced or revised the regulations surrounding real estate professionals.
Virginia now mandates written REALTOR® agreements
A recent Virginia bill—signed into law March 24, and going into effect on July 1—changes state law when it comes to agent/client agreements. Before, a Virginia agent did not need to have a written agreement in place before a tour. This new law mandates that an agent must have a written agreement with a buyer or tenant before showing them a property. A seller’s agent does not need an agreement with a buyer or tenant if they are solely representing the seller or landlord. The law also does not mandate a specific type of agreement between buyer and agent.
Proposed statewide MLS and association membership changes
Oregon HB2438 would make it unlawful behavior in the state to deny a real estate licensee access to an MLS because they are “not a member of a real estate brokers’ organization or other organization or association relating to professional real estate activity.”
Arizona is also looking at the relationship between MLSs and both real estate professionals and consumers.
Arizona HB2003 similarly would modify the state’s real estate broker regulations to prohibit a broker from mandating a licensee join an organization as a condition of employment. The bill lists three types of organizations: MLSs, real estate trade associations and REALTOR® organizations. There is, however, an exemption to this rule if membership in such an association is required by law.
Arizona HB2829, if passed, mandates that real estate websites which use MLSs must give homeowners the ability to opt in or opt out of having their property advertised on the website.
All three bills, however, appear to have failed, with state associations having strongly opposed changes to membership requirements.
Business practice changes for REALTORS®
California AB723 would require that agents disclose when they use a digitally altered image (whether through editing software or AI) in advertising. The disclosure must be a “conspicuous statement” about the alteration. For online advertisements, the original photo (or a link) to it would also need to be provided. Under the legislation, “alteration” does not include minor edits such as cropping or lighting adjustments, only those that “change the condition” of the property.
Illinois HB3452 would codify rules similar to NAR’s Clear Cooperation Policy under state law. Under this law, within one business day of signing a brokerage agreement with a seller or landlord, the representing licensee must publicly share information and advertise the property to other agents. However, the bill allows the licensee to sign a detailed opt-out form to delay the public listing.