Key Details:
- The National Association of Realtors (NAR) and Phoenix Realtors (PAR) clash over the MLS Choice program, with NAR claiming it violates their bylaws and PAR defending it as a subscription for non-Realtors.
- As NAR moves to revoke PAR’s charter, the dispute raises questions about innovation, tradition, and the best interests of real estate agents.
Last week, in an email sent on December 18th, the National Association of Realtors® (NAR) demanded the Phoenix Realtors (PAR) cease and desist their new MLS Choice offering.
The new membership option allows real estate agents to join PAR and access the MLS without needing to also join NAR and Arizona Association of Realtors (AAR)—saving them several hundred dollars a year.
If you’ll recall, NAR’s major beef with MLS Choice is its violation of the three-way agreement, requiring agents to join Realtor associations at the national, state, and local levels.
Today, we have two updates to share:
- PAR responded to the cease and desist, saying they’re willing to talk but “will not categorically withdraw” the MLS Choice offering.
- NAR responded to that by moving to revoke PAR’s Realtors charter.
Here’s what we know so far.
PAR Refuses to Withdraw MLS Choice
In a letter dated December 23, PAR’s attorney, Christopher Osborn, challenged NAR’s interpretation of the program:
- Not a Membership: Osborn emphasized that MLS Choice is a fee-based subscription—not an alternative Realtor membership option.
- Supporting Innovation: PAR argues that MLS Choice fosters innovation and meets the demands of the real estate market.
- Offer to Revise: While refusing to withdraw the program, PAR has offered to revise its MLS Choice materials to address NAR leadership’s concerns.
Meanwhile, Andy Fegley, the CEO of Phoenix Realtors, expressed disappointment in NAR’s strong negative reaction to MLS Choice.
We were surprised to learn that NAR would view increased options as a threat, and we’ve engaged in meaningful discussion with them to help alleviate their confusion. Our primary goal is to engage in an amicable path forward with NAR so that we can best serve our industry’s real estate professionals.
NAR Moves to Revoke PAR’s Realtor Charter
In a decisive response to PAR’s refusal to comply, NAR announced on December 23 that it is initiating the charter revocation process against Phoenix Realtors.
Here’s how the process will unfold:
- Review Panel: PAR will present its reasons for non-compliance to a 3-5 member panel of NAR’s Executive Committee (chosen by NAR CEO Kevin Sears).
- Compliance Deadline: If the panel rejects PAR’s defense, a deadline will be set for MLS Choice to be shut down.
- Show Cause Hearing: If PAR does not comply, a second panel of 7-9 members will hold a “show cause” hearing.
- Final Decision: The full Executive Committee will make the final call on revocation.
If PAR’s charter is revoked, its territory will be unassigned, and NAR will inform local members about their options, including joining other local associations.
Lesley Muchow, NAR’s General Counsel, emphasized the stakes, saying the organization “has no choice but to defend the Realtor trademark, our integrated model, and Realtor and consumers they serve.”
Without action, we put the benefits NAR members rely on—such as market research, business resources, a unified advocacy platform, and a single Code of Ethics— at risk.
In a statement sent to Real Estate News, a NAR spokesperson reiterated the organization’s commitment to upholding its Constitution and bylaws:
“Under their charters from NAR, state and local associations are prohibited from adopting any practice inconsistent with NAR’s bylaws and Constitution. Phoenix Realtors is violating NAR’s bylaws and Constitution by offering a non-Realtor membership option.”
Speaking in defense of PAR, CEO Andy Fegley clarified the purpose of MLS Choice, as well as his reason for refusing to withdraw it.
MLS Choice is not and never will be a Realtor membership. It is a fee-based subscription. There is a difference between increasing choice and replacing it, and we will always proudly support and champion Realtors.
This conflict underscores the tension between tradition and innovation in the real estate industry. As associations navigate these challenges, the outcome of this case could set a precedent for how Realtor organizations adapt to evolving market demands.
It could also draw even more attention to NAR’s struggles with enforcing its unified Code of Ethics, as well as ethics-related concerns about NAR executive leadership’s personal use of member dues.
Stay tuned as we learn more.
