Fiduciary And Ethical Duties For Brokers/Agents To Consider Regarding MLOSP
By David Hamerslough and Victoria B. Naidorf
June 11, 2025
Our April article introduced NAR’s new Multiple Listing Options For Sellers Policy (“MLOSP”). Our May article was intended to provide any updates on the MLOSP and discuss some of the potential fiduciary duty and ethical duty issues that might arise out of this new policy. We interrupted that discussion in May so that we could discuss a sudden surge in contract cancellations. This month’s article now picks up where we left off in April.
Implementation Of MLOSP By MLS Listings, Inc.
It’s our understanding that the Board of Directors of MLS Listings, Inc. is meeting in late June to discuss the implementation of MLOSP, including (1) the time period for any delayed marketing-exempt listing, (2) how “days on market” and price change history will be tracked and/or reported, (3) whether the disclosure certification that sellers need to sign will be included in the filing of a delayed marketing-exempt listing, (4) whether the MLS will develop its own form for any required seller disclosure or leave that to individual brokers, and (5) if brokers are allowed to create their own disclosure form, will that be subject to review and approval by MLS Listings, Inc.
On the state level, we understand that C.A.R. passed a motion to ask NAR to reconsider the issue of office-exclusive exempt listings. We are not aware of any response from NAR at this time on this request but will need to continue to monitor this and other issues related to these new policies.
Common-Law Fiduciary Duties
Most of the articles we have written about brokerage fiduciary duties have addressed the duty of agents to inquire about and/or learn those material facts that might impact their clients’ decisions. There are, however, other components of the common-law fiduciary duty. These include a duty of care, loyalty, good faith, confidentiality, full disclosure, and putting the interests of one’s client ahead of one’s own personal interests. Another way of stating this latter duty is that a fiduciary should always act in his or her clients’ best interests.
The MLOSP requires that if a seller wants to delay marketing of their property then the seller must sign a disclosure documenting the seller’s informed consent to waive the benefits of immediate public marketing through IDX and syndication. The disclosure certification that is to be signed by the seller must include (1) a disclosure about the professional relationship between the MLS participant and the seller, (2) the seller’s acknowledgment that the seller understands the MLS benefits they are waiving or delaying with the exempt listing, such as broad and immediate exposure of their listing through the MLS, and (3) confirmation of the seller’s decision that their listing will not be publicly marketed and disseminated by the MLS as an office-exclusive listing or that their listing will not have immediate public marketing through IDX and syndication as a delayed-marketing listing.
Issues For Sellers’ Brokers/Agents To Consider Regarding MLOSP
- As a fiduciary, obtaining “informed consent” from a seller requires more than merely having the seller sign a disclosure certification. It requires the agent to (a) have an actual discussion with the seller regarding the client’s needs and wants with respect to the listing and marketing of their property, (b) investigate/evaluate those facts, issues, assumptions, and/or rationale upon which any decision by the seller is being made with respect to their listing options, (c) have a discussion of the pros and cons of each option, and (d) explain the risks associated with those options. The following are some of the subjects that should be discussed with sellers in order for listing agents to meet their fiduciary duty if the property is not immediately placed on the MLS:
- Explaining the potential financial benefits that a broker may receive as a result of either a delayed-marketing exempt listing or an office-exclusive exempt listing. This would include disclosing to sellers any potential for a brokerage and/or individual agent/team to act as a dual agent and to potentially receive more compensation than they might receive if acting solely as the sellers’ agent
- Explaining any rules MLS Listings, Inc. will implement with respect to the duration of any delayed-marketing exempt listing and/or office-exclusive listing, including how days on market and price change history will or will not be displayed and whether or not those rules will impact the sellers;
- Discussing the impact, if any, of Zillow and Redfin’s current position that any listing that is not posted to the MLS within 24 hours of the listing will be barred from these sites during the life of the listing;
- Explaining the agents’ marketing strategy and why that strategy is the best option for their sellers. This means that listing agents must be able to show their sellers that the recommended marketing strategy is consistent with the sellers’ needs and wants regarding pricing and/or the timing of any sale. Agents will need to make sure that sellers understand whether their objectives may be better served by listing the property as “members only-show” on the MLS;
- If a seller expresses privacy concerns, agents will need to be able to explain all of the available options to meet those concerns and still list the property as “members only-show” on the MLS; and
- Explaining how all of the foregoing issues are impacted by an office-exclusive exempt listing vs. a delayed-marketing exempt listing.
- One important issue agents should discuss with sellers is potential fair housing claims that may arise because of any of the following choices:
- If it is a delayed-marketing exempt listing, on what other websites, portals, social media, or Internet sites will the listing be advertised, and why are those choices being made?
- If it is a delayed-marketing exempt listing but is shared on some but not all available websites, portals, social media, or elsewhere on the Internet, what motivated the advertising of the property on those particular marketing platforms? In other words, is the listing only being shared with certain groups and/or individuals to the exclusion of others (e.g., Asian only sites)? Keep in mind that fair housing claims can arise as a result of inadvertent as well as intentional conduct.
- If the listing is an office-exclusive that is potentially shared with a limited group of other brokers/agents why are those choices being made and does it exclude any anyone protected by the fair housing laws?
- If the listing is a delayed-marketing exempt listing, how will inquiries and/or offers be handled from other brokers/agents? While it is easy to state that all such inquiries/offers will be treated equally, sellers’ agent’s conduct may be questioned if a broker/agent representing an interested buyer does not believe that their buyer was treated fairly and equally.
If there is any buyer interest and/or an offer is received during a delayed-marketing exempt listing, the listing agent should evaluate and discuss with their sellers (a) the status of their marketing efforts up to that point in time, (b) whether responding to the offer is or is not in the best interests of the seller, (c) the pros and cons of not responding to any interest on the part of a buyer at that time, and (d) the risks of not responding. In other words, all of the required conversations that were needed to meet the agent’s fiduciary duties at the time sellers initially decide about the MLOSP will need to be discussed and reevaluated again once a buyer shows interest in the property. - If the listing is a delayed-marketing exempt listing that is marketed on other platforms, how will the seller’s agent address and/or control the intentional or inadvertent dissemination of that marketing information by any third party who receives the marketing material? What are the consequences of the dissemination of this marketing information by those third parties? Will it be necessary for listing agents to obtain a written indemnity agreement from any individual or entity with whom any information is being shared to protect the agent and seller? To what extent will such an indemnity agreement be enforceable and potentially jeopardize any errors and omissions insurance coverage? These are all questions that may need to be considered.
Issues For Buyers’ Brokers/Agents To Consider Regarding MLOSP
As a fiduciary, a broker/agent representing buyers will need to discuss MLOSP and how it may impact their buyers’ ability to view and/or make offers on property that might meet their criteria. Assuming that the buyer’s broker/agent becomes aware of a delayed-marketing exempt listing, there is a fiduciary and ethical obligation for the broker/agent to inform the buyer of the property if it meets the buyer’s criteria. The buyer should be given the choice of whether they authorize contact with the seller’s agent to determine if the seller will allow a showing of the property and/or receive offers.
In the event that a listing agent communicates that the seller is unwilling to show the property and/or receive any offers before the expiration of the delayed-marketing exempt listing, does the buyer’s broker/agent need to step aside and allow the buyer to approach the listing agent and/or seller directly? Is a referral fee an appropriate way to handle this situation? While an outright refusal on the part of the seller to allow a showing and/or receive an offer in these circumstances may seem unlikely, a response of that nature does raise these fiduciary and/or ethical concerns that will need to be discussed by broker/agents with their buyers.
Conclusion
Our article has highlighted some of our practical and legal concerns that we foresee with the MLOSP in its current form. These issues will continue to evolve as the policy is employed, as the MLS and other members of the real estate industry implement and/or respond to it, and when changes, if any, are ultimately made to it. While MLOSP is in its infancy, we have already heard of claims by sellers against their brokers/agents that the seller was not properly advised about the pros and cons/ramifications of the policy, which resulted in their selling their property for less money. We believe that such claims are likely to continue if the fiduciary and ethical duties highlighted in this article are not properly addressed.
We strongly encourage brokers to train all agents on the importance of obtaining the needs and wants of their sellers first, and then tailoring the marketing strategy to meet the sellers’ actual needs and wants. Brokers must be able to prove that their sellers are making their critical marketing decisions with informed consent – it is unlikely that having a one-size-fits-all marketing strategy and/or simply sending sellers a MLOSP disclosure form through DocuSign will suffice to defeat a breach of fiduciary duty claim.