A mythical listing service
As most of our readers know, membership in the California Association of Realtors (CAR) and any of its local branches is not mandatory.
However, an unfortunate belief in the necessity of CAR membership among a minority of licensees persists to this day. Specifically, many licensees believe membership in the association is a prerequisite for multiple listing service (MLS) access.
This stubborn myth is a throwback to the days when associations did, in fact, own their local MLSs. Pre-1976, association membership was a necessity in the course of a licensee’s business. But this roadblock hasn’t been present in over forty years, and with the prohibition of CAR’s monopoly of the MLS, all licensees, regardless of their status in an association, were free to circumvent the CAR monopoly and scour their MLS independently. [Marin County Board of Realtors, Inc. v. Palsson (1976) 16 C3d 920]
In other words, associations may no longer make membership a requirement for MLS access — instead, an association may receive a “reasonable fee” from nonmembers for the privilege of MLS access.
Realtor associations give brokers the option of being:
- a Realtor member, which includes MLS subscription and membership to CAR and the National Association of Realtors® (NAR); or
- an MLS subscriber only.
Editor’s note — First tuesday offers a broker search database for use by employing brokers looking to advertise job openings and for newly licensed sales agents looking for work. The database may be filtered by whether an employing brokerage requires association membership.
The exception to the rule
With this misconception addressed, and because of exorbitant member dues, many licensees often find union membership not worth the cost at all. In the end CAR membership is, in fact, optional.
The notable exception to the “MLS only” option is for real estate agents and broker-associates whose employing brokers are themselves members of an association — which, by design, most are.
From one perspective, this inclusive position makes sense. After all, sales agents represent their employing brokers in any transaction — they are, in effect, an agent of the broker, who is in turn the agent of their client in the transaction. Thus, it stands to reason if a broker chooses to be a member of a trade union’s local board or association, their representative will also be a member of the association.
Typically, however, it is the agent who bears the cost of this membership dragnet, rarely their employing broker.
Association membership dues — that is, CAR, plus dues for whatever local association the broker chooses for membership, plus dues for the National Association of Realtors (NAR), CAR’s nationwide counterpart — runup to $700 annually, depending on the local association. That’s a pretty exorbitant expense to mandate for the privilege of employment.
After all, sales agents are employees. This trade union issue is not a real estate issue — it’s a trade union issue, and therefore a labor issue.
And even when the cost of membership is not shunted onto agents whose employing brokers happen to be CAR members, it’s still a fabulous waste of money —CAR member dues neither generate agent income nor support services offered to members of the public.
Fortunately, there’s a simple, hassle-free solution to all this: Brokers need to allow their agents to petition to opt out of association membership and instead pay the much less imposing price of non-member MLS access required for gainful occupation — as California’s Supreme court envisioned in 1976.
No association with unions
Is this a foolproof resolution? Of course not. The biggest sticking point is the associations themselves — CAR and its various branches have more than a vested interest in keeping this practice in place. A large swath of their member base —and by extension their revenue — comes from licensees who are association members primarily because their employers mandate it.
Let’s not misrepresent the situation — it’s not as if thousands of shackled Realtor-employed licensees are screaming for freedom from the unrelenting oppression of CAR membership — but it’s also not as trivial an issue as it seems at first glance.
For example, unions in California do not have the power to compel membership, or to compel employees to pay member dues except as the result of a collective bargaining agreement — and even then, the “agency fee” a union may require does not equal the full amount of the member dues. This rule exists for a good reason. While unions typically offer numerous benefits to individuals and industries, union membership comes with additional restrictions and political agendas that may not align with a member’s own priorities.
As often as we’ve accused CAR of being a union, CAR is a trade association, and thus not quite the same thing. But at heart, it occupies a similar space in the California real estate industry. As a collective of professionals with its own rules and its own agenda, there are a multitude of reasons a California real estate licensee might not want to be a part of it.
In CAR’s case, compulsory membership is not a result of a hard-and-fast rule, but instead a professional norm imposed by top-down pressure. For example, if a Realtor-employed sales agent does not pay their association dues, the local AOR may bill their employing broker anyway, making it pointless to resist if you are such an agent.
Do not pass go
What this boils down to is the fact that CAR is a monopoly in the California real estate world. We’ve talked endlessly about their stranglehold on the real estate forms market and their attempted takeover of continuing education, among other questionable tendencies — all in the name of making sure it is the one and only force for good in the California real estate industry.
But the reality is, competition is good for any industry. This principle is why the court in Palsson ultimately prohibited CAR from requiring membership for MLS access. Licensees shouldn’t have to let a trade association pickpocket them for access to a tool required to do their jobs effectively — and that includes those whose employing brokers have decided to welcome the pickpockets with open arms.