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Heartland MLS Reminds Subscribers about Potential License Law Violations Related to Effective Dates on Listing Contracts

May 17, 2019 in Heartland MLS

With the busy spring selling season in full force, Heartland
MLS is seeing an expected increase in MLS activity. An unexpected element is
the number of listings being entered into the system prior to the effective
listing date on the Exclusive Right to Sell contract. Not only is this practice
a violation of HMLS policy, even more importantly, it is a violation of license

Agents cannot legally advertise their sellers’ properties
without a valid Exclusive Right to Sell contract, and entry into the MLS qualifies
as advertising. Heartland MLS tries to catch these discrepancies, but if it
were to miss it, the Real Estate Commission has escalating penalties of its own
as well as the right to revoke real estate licenses from agents.

The Heartland MLS Board of Directors voted earlier this year
to instate an escalating penalty to agents who enter a listing into the MLS
before the effective date on their Exclusive Right to Sell contracts. This
change was brought about after Heartland MLS noticed this problem occurring
regularly and was motivated to protect agents and brokers from legal

This means that to avoid penalty, agents must wait until the
effective dates on their Exclusive Right to Sell contracts to enter their
sellers’ properties into the MLS, regardless of the date on any other form,
such as a temporary waiver. The signature date on a temporary waiver is not a
legal agreement to advertise the property; an Exclusive Right to Sell contract
must be valid for entry into the MLS system, even if that property will be
entered as Pre MLS.

An Exclusive Right to Sell contract is not valid until the
effective/list date on the contract, which should match or occur after the
signature date. If the effective date is for some reason before the signature
date, then advertising the property in any capacity, including entry into the
MLS, that occurs before the signature date is in violation of license law,
because that contract had not been signed, and therefore no legal agreement had
been made at the time of advertising. If the effective date is after the
signature date, then advertising the property before the effective date would
also violate license law, because the signed agreement stated that the agent
would begin advertising after the effective date, regardless of how far in
advance the contract was signed.

Additionally, in order to keep MLS data as accurate and up
to date as possible for fellow REALTORS®, Heartland MLS asks that its
subscribers change the status on their listings to “pending” as soon as their
buyers accept an offer. This means that agents should not wait for any other
factors, such as the receipt of earnest money. If the offer has been accepted,
the status of the listing should be changed. This will avoid further
submissions of offers that cannot legally be accepted. After an offer is
accepted, it should not be in an “active” status unless a mutual release
contract has been signed, legally cancelling the offer.

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