Doubling down in what appears to be a growing and multi-pronged battle over MLS membership requirements, the National Association of REALTORS® (NAR) sent a cease and desist letter to a local association that is seeking to allow agents and brokers to access listing services without NAR membership.
An NAR spokesperson confirmed that the letter was sent, only weeks before the new membership program—created by Phoenix REALTORS® in Arizona and announced in November—is set to become available.
“This is a matter of maintaining standards for the REALTOR® brand to best meet the needs of our members and their consumers—as we always have and will continue to do,” the spokesperson said. “To be clear, this issue is about REALTOR® association membership. NAR policy does not require that participants be members of a REALTOR® association to access an MLS. MLS participation is determined at the local level.”
The spokesperson did not answer specific questions regarding whether NAR had been in contact with Phoenix REALTORS® regarding the new membership offering, which appears to circumvent NAR’s commitment to the “three way agreement”—the long-held and recently reaffirmed requirement that members join local and state boards along with NAR, paying separate dues to all three.
The Phoenix REALTORS’® new membership option, dubbed “MLS Choice,” is intended to launch at the start of the new year. According to an announcement on the association’s website, it was created explicitly in response to the commission lawsuits, which broadly forced brokerages to end requirements that agents and brokers join NAR.
At least two brokerages have already embraced the MLS Choice membership—namely, Realty ONE Group and HomeSmart, with the former going so far as to create a new subsidiary that agents can join if they don’t want to be part of NAR.
Phoenix REALTORS® and its CEO, Andy Fegley, did not immediately respond to RISMedia’s requests for comment.
With NAR showing that it will go so far as to threaten legal action against local associations to protect the “three way agreement,” it appears likely that issues of membership and MLS access will play out in the courts.
At least three lawsuits have been filed in federal court over the last six months by brokers pushing back against membership requirements for MLS access, naming NAR and local associations.
One lawsuit specifically claimed that policy changes mandated by NAR’s settlement have devalued REALTOR® membership and MLS access, and two others claim that rules are enforced unevenly and discriminate against racial minorities.
Maurice Muhammad, a Pennsylvania-based broker who filed his lawsuit in October, recently told RISMedia that his company was cut off from the MLS, and that he believed that move was “retaliatory” and “heavy-handed.” Muhammad said he initially sued NAR and local associations (representing himself in court) because he believed membership requirements harmed smaller brokerages, and included “disparate treament…when it comes to people of color.”
Luz de Amor Eytalis, a broker from Texas who filed her lawsuit back in November, is asking for $5.8 million in compensatory damages and a court order ending the REALTOR® membership requirements.
In a post on Reddit earlier this week, Eytalis detailed the circumstances that allegedly led to her suit, claiming she has been billed thousands of dollars repeatedly for agents who were hanging their licenses with her but not actively practicing real estate. At one point, the local association had threatened to terminate her whole company’s MLS access, and Eytalis said she paid $3,600 “under protest.”
But when the same thing happened again—this time, with an agent who Eytalis claimed she couldn’t even get in touch with—she sued in small claims court, and then subsequently filed a federal lawsuit against NAR.
“To put it bluntly, this is a reverse pyramid scheme. Agents and brokers at the bottom are coerced into paying exorbitant fees, with only a fraction going toward the actual services we use. The rest stays with local boards or is funneled to national organizations, funding legal defenses, lobbying efforts, and administrative bloat. This isn’t about supporting real estate professionals—it’s about enriching the few at the expense of the many,” she wrote.
NAR has repeatedly stated that its rules are meant to protect the integrity of the REALTOR® brand and ensure equitable access and presentation of listings.
There is currently a split ruling from courts regarding whether REALTOR® associations have to provide MLS access to non-members. In 1978, a California state court ruled that membership requirements violated antitrust statutes, allowing non-members access to the MLS. In 1991, the Eleventh Circuit ruled in a case called Thompson v. Dekalb County Board of REALTORS® that non-REALTOR® members have to be given access to the MLS—but that ruling only applies to that court’s jurisdiction, which includes Florida, Alabama and Georgia.
Notably, the Thompson case also involved racial discrimination, as the broker who sued—who is Black—did not want to join his local REALTOR® board due to REALTOR® historic practice of excluding Black agents and brokers.
Whether or not these latest challenges will be enough to change long-standing rules remains to be seen. In a lengthy post on its website detailing the history of legal challenges to MLS access, NAR pointed to several times that courts have ruled in favor of REALTOR® boards and MLSs on the question of non-member access, with a “2006 trilogy of successful decisions” in Wisconsin, Kentucky and Washington all holding in favor of local boards. The post also noted that four other federal circuit courts have ruled for REALTOR® boards and MLSs, saying the Thompson case “can fairly be characterized as an anomaly.”
But that post appeared to have been removed from NAR’s website sometime after brokers in Michigan sued NAR back in August over REALTOR® membership requirements—although it could still be accessed through an internet archive. An NAR spokesperson did not respond to specific questions regarding the post being removed.
They need to go, no more government control!