The California Association of Realtors (C.A.R.) periodically updates its suite of forms to reflect the evolving legal and industry landscapes. During the most recent update cycle, which began in June 2024, 65 forms were either changed or newly created, making it crucial for real estate professionals to stay informed. These updates significantly affect your interactions with the Multiple Listing Service (MLS). In this article, we will focus on five key forms and the changes that will impact your day-to-day operations.

1. Residential Listing Agreement (RLA)

One of the most important updates involves the Residential Listing Agreement (RLA). In its new form, there are no fields for commission sharing. Under the old version of the RLA, the seller could specify the compensation for both the listing and buyer agents. However, the new RLA does not allow this anymore. The Broker Compensation field is now entirely removed from the C.A.R. forms, a significant shift that requires your attention.

As a result, if you’re listing a property, you’ll need to enter “zero” in the Buyer Agent Compensation (BAC) field within the MLS or omit compensation entirely. This is particularly crucial if you’re using the C.A.R. forms, as commission-sharing is no longer part of the platform.

Some brokerages are creating their own RLAs to handle commission, but for those using C.A.R. forms, these fields no longer exist. If you’re still using an older version of the RLA, you’ll need to update it or provide your seller with the newly revised form from July 24th onwards.

2. Disclosure and Modification to the Listing Agreement (DMLA)

What if you’ve already signed a listing agreement under the old format? C.A.R. has introduced the Disclosure and Modification to the Listing Agreement (DMLA). This new form modifies any listing agreements signed prior to the July 24th changes, helping you transition into the new compensation framework.

If you have an active listing or one in the Coming Soon, Withdrawn, or Hold statuses, the DMLA allows you to update the listing with the new rules. Even for listings under contract or pending, the DMLA is vital in ensuring that sellers understand the revised commission rules.

3. Multiple Listing Service Addendum (MLSA)

The Multiple Listing Service Addendum (MLSA) is another critical document, addressing specific issues related to MLS participation. This form touches on:

• Clear Cooperation policies
• Guidelines for Coming Soon listings
• Photo and Data Privacy issues

The MLSA is automatically included when filling out a listing packet in zipFORMS, ensuring all MLS-specific matters are handled efficiently. Understanding the guidelines in this addendum can help avoid legal and procedural issues down the road.

4. Buyer Representation and Broker Compensation Agreement (BRBC)

A major change impacting buyers’ agents is the introduction of the Buyer Representation and Broker Compensation Agreement (BRBC), which became mandatory on August 13th. This form clearly defines the compensation terms between the buyer and their agent before any property tours or virtual viewings occur. It is required under CRMLS Rule 9.1, part of the NAR settlement agreement.

The BRBC ensures that compensation is agreed upon and documented before showing properties, making it an essential part of any buyer-agent relationship. This rule aligns with CRMLS requirements and helps prevent misunderstandings about compensation during a deal.

5. Seller Payment to Buyer Broker Form (SPBB)

The Seller Payment to Buyer Broker (SPBB) form is another new addition, designed to formalize requests for sellers to pay part or all of the buyer’s brokerage fees. The SPBB works in conjunction with the BRBC to ensure that any compensation requests from buyer agents are put in writing and negotiated upfront. This form is especially critical as it becomes a standard part of negotiations between buyer agents and sellers.

By including this form with offers, buyer agents can request that the seller contributes to their commission, ensuring that all parties are aware of their financial obligations.

Staying Ahead of the Changes

The latest updates to C.A.R. forms, especially those related to commission-sharing and MLS interactions, represent significant shifts in how real estate agents conduct business. Without the proper knowledge and use of these forms, agents could face severe financial consequences. It is crucial to familiarize yourself with these updates and incorporate them into your practice.

For more detailed information, make sure to attend any training sessions offered by C.A.R. or your local MLS to fully understand the implications of these changes. Additionally, review each form carefully before submitting any listings to the MLS to ensure compliance with the latest guidelines.

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Resources:

California Association of Realtors (C.A.R.)

• C.A.R. Forms Library:
  https://www.car.org/transactions/zipform/formlibraries
• Legal Hotline for Members:
  https://www.car.org/riskmanagement/memberlegalservices
• 2024 C.A.R. Forms Changes:
  https://www.car.org/riskmanagement/tools/listingandbuyersbroker

California Regional MLS (CRMLS)

• CRMLS Knowledge Base (Training and Rule Updates):
  https://kb.crmls.org/
• Clear Cooperation Policy:
  https://go.crmls.org/clear-cooperation-policy/

National Association of Realtors (NAR)

• NAR MLS Policy Updates:
  https://www.nar.realtor/about-nar/policies/mls-clear-cooperation-policy