[Federal Register Volume 60, Number 133 (Wednesday, July 12, 1995)]
[Notices]
[Pages 35907-35910]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17058]
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FEDERAL TRADE COMMISSION
[File No. 901-0094]
Port Washington Real Estate Board, Inc.; Proposed Consent
Agreement With Analysis to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit, among other things, a New York-based brokerage service from
restricting the use of exclusive agency listings, fixing commission
splits between listing and selling brokers, restricting or prohibiting
members from holding open houses or using ``For Sale'' signs,
restricting brokers from advertising free services to property owners,
and excluding from membership brokers who do not operate a full-time
office in the territory served by the Board's multiple listing service.
DATES: Comments must be received on or before September 11, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Michael Bloom or Alan Loughnan, New
York Regional Office, Federal Trade Commission, 150 William Street,
13th Floor, New York, N.Y. 10038. (212) 264-1207.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby
given that the following consent agreement containing a consent order
to cease and desist, having been filed with and accepted, subject to
final approval, by the Commission, has been placed on the public record
for a period of sixty (60) days. Public comment is invited. Such
comments or views will be considered by the Commission and will be
available for inspection and copying at its principal office in
accordance with Section 4.9(b)(6)(ii) of
[[Page 35908]]
the Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii).
In the matter of Port Washington Real Estate Board, Inc., a
corporation. File No. 9010094.
Agreement Containing Consent Order to Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Port Washington Real Estate Board, Inc.,
a corporation, and it now appearing that Port Washington Real Estate
Board, Inc., hereinafter sometimes referred to as proposed respondent
or ``PWREB'', is willing to enter into an agreement containing an order
to cease and desist from the acts and practices being investigated,
It is hereby agreed by and between PWREB, by its duly authorized
officer and its attorney, and counsel for the Federal Trade Commission
that:
(1) Proposed respondent PWREB is a corporation organized, existing
and doing business under and by virtue of the laws of the State of New
York, with its office and principal place of business located at the
following address: Port Washington Real Estate Board, Inc., care of
Charles Walker, President of Charles E. Hyde Agency, 277 Main Street,
Port Washington, New York 11050.
(2) Proposed respondent admits all the jurisdictional facts set
forth in the draft complaint.
(3) Proposed respondent waives:
(a) Any further procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement;
and
(d) Any claim under the Equal Access to Justice Act.
(4) This agreement shall not become part of the public record of
the proceeding unless and until it is accepted by the Commission. If
this agreement is accepted by the Commission, it, together with the
draft complaint contemplated thereby, will be placed on the public
record for a period of sixty (60) days and information with respect
thereto publicly released. The Commission thereafter may either
withdraw its acceptance of this agreement and so notify the proposed
respondent, in which event it will take such action as it may consider
appropriate, or issue and serve its complaint (in such form as the
circumstances may require) and decision, in disposition of the
proceeding.
(5) This agreement is for settlement purposes only and does not
constitute an admission by proposed respondent that the law has been
violated as alleged in the draft complaint, or that the facts as
alleged in the draft complaint, other than jurisdictional facts, are
true.
(6) This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Sec. 2.34 of the Commission's
Rules, the Commission may, without further notice to proposed
respondent, (1) issue its complaint corresponding in form and substance
with the draft complaint and its decision containing the following
order to cease and desist in disposition of the proceeding and (2) make
information public with respect thereto. When so entered, the order to
cease and desist shall have the same force and effect and may be
altered, modified, or set aside in the same manner and within the same
time provided by statute for other orders. The order shall become final
upon service. Delivery by the U.S. Postal Service of the complaint and
decision containing the agreed-to order to proposed respondent's
address as stated in this agreement shall constitute service. Proposed
respondent waives any right it may have to any other manner of service.
The complaint may be used in construing the terms of the order, and no
agreement, understanding, representation, or interpretation not
contained in the order or the agreement may be used to vary or
contradict the terms of the order.
(7) Proposed respondent has read the proposed complaint and order
contemplated hereby. It understands that once the order has been
issued, it will be required to file one or more compliance reports
showing that it has fully complied with the order. Proposed respondent
further understands that it may be liable for civil penalties in the
amount provided by law for each violation of the order after it becomes
final.
Order
I
It is ordered that, for the purposes of this order, the following
definitions shall apply:
(1) ``PWREB'' means the Port Washington Real Estate Board, Inc., or
any affiliated or successor organization comprised of real estate
brokers doing business in PWREB's service area which operates a
multiple listing service.
(2) ``Multiple listing service'' means a clearinghouse through
which member real estate brokerage firms exchange information on
listings of real estate properties and share commissions with other
members.
(3) ``PWREB's service area'' means the territory within which PWREB
provides its multiple listing service.
(4) ``Broker'' means any person, firm, or corporation that, for
another and for a fee or commission, lists for sale, sells, exchanges,
or offers or attempts to negotiate a sale, exchange, or purchase of an
estate or interest in real estate.
(5) ``Member'' means any real estate broker that is entitled to
participate in a multiple listing service offered by PWREB.
(6) ``Applicant'' means any owner or co-owner of a real estate
brokerage firm who is duly licensed as a real estate broker by the
State of New York, and who has applied individually or on behalf of his
or her firm for membership in PWREB's multiple listing service.
(7) ``Listing broker'' means any broker who lists a real estate
property with a multiple listing service pursuant to a listing
agreement with the property owner.
(8) ``Listing agreement'' means any agreement between a real estate
broker and a property owner for the provision of real estate brokerage
services.
(9) ``Selling broker'' means any broker, other than the listing
broker, who locates the purchaser for a listed property.
(10) ``Exclusive agency listing'' means any listing under which a
property owner appoints a broker as exclusive agent for the sale or
lease of the property at an agreed commission, but reserves the right
to sell the property personally to a direct purchaser (one not procured
in any way through the efforts of any broker) at an agreed reduction in
the commission or with no commission owed to the agent broker.
(11) ``Exclusive right to sell listing'' means any listing under
which a property owner contracts to pay the broker an agreed commission
if the property is sold, whether the purchaser is procured by the
broker or any other person, including the property owner.
(12) ``Open house'' means making a particular property available at
a designated time for view by the public, potential buyers, or real
estate brokers, without prior arrangement or appointment.
II
It is further ordered that respondent PWREB, its successors and
assigns, and its directors, officers, committees, agents,
representatives, and employees, directly or indirectly, or through any
corporation, subsidiary, division, or other device, in connection with
the
[[Page 35909]]
operation of a multiple listing service in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, shall
forthwith cease and desist from adopting, maintaining, or enforcing any
rule, policy, or practice, or taking any other action that has the
purpose or effect of:
(A) restricting or interfering with (1) any broker's offering or
accepting any exclusive agency listing; or (2) the publication on a
PWREB multiple listing service of any exclusive agency listing
submitted by a member; provided, however, that nothing contained in
this subpart shall preclude respondent from (a) including a simple
designation, such as a code or symbol, that a published listing is an
exclusive agency listing; or (b) applying reasonable terms and
conditions equally applicable to the publication of any listing,
whether an exclusive agency listing or an exclusive right to sell
listing.
(B) suggesting or fixing any rate, range, or amount of any division
or split of commission or other fees between any listing broker and any
selling broker, or restricting any property owner's participation in
the determination of the division or split of commission or other fees
between any listing broker and any selling broker.
(C) restricting or interfering with the ability of member brokers
or homeowners to hold open houses or to place signs on any property;
provided, however, that nothing contained in this subpart shall
preclude PWREB from requiring its members to comply with local
ordinances governing open houses or use of signs.
(D) restricting or interfering with the ability of its member
brokers to advertise free services to property owners.
(E) conditioning membership in or use of a multiple listing service
operated by PWREB on any applicant or member operating or maintaining a
full-time office, or on such applicant or member operating or
maintaining an office in PWREB's service area; provided, however, that
nothing contained in this subpart shall prohibit respondent from
adopting or enforcing any reasonable and nondiscriminatory policy to
assure that its members are actively engaged in real estate brokerage
and that listings published on respondent's multiple listing service
are adequately serviced.
III
It is further ordered that respondent PWREB shall:
(A) Within thirty (30) days after this order becomes final, furnish
an announcement in the form shown in Appendix A to each member of PWREB
or a multiple listing service operated by PWREB.
(B) Within sixty (60) days after this order becomes final, amend
its by-laws, rules and regulations, and other of its materials to
conform to the provisions of this order and provide each member of
PWREB or a multiple listing service operated by PWREB with a copy of
the amended by-laws, rules and regulations, and other materials.
(C) For a period of three (3) years after this order becomes final,
furnish an announcement in the form shown in Appendix A to any new
member, applicant, or any person who inquires about possible membership
in PWREB or its multiple listing service, within thirty (30) days after
such person's initial application or inquiry.
IV
It is further ordered that respondent PWREB shall:
(A) Within ninety (90) days after this order becomes final, submit
a verified written report to the Federal Trade Commission setting forth
in detail the manner and form in which respondent has complied and is
complying with this order.
(B) In addition to the report required by Paragraph IV(A), annually
for a period of three (3) years on or before the anniversary date on
which this order becomes final, and at such other times as the Federal
Trade Commission or its staff may by written notice to respondent
require, file a verified written report with the Federal Trade
Commission setting forth in detail the manner and form in which
respondent has complied and is complying with this order.
(C) For a period of five (5) years after this order becomes final,
maintain and make available to the Commission staff for inspection and
copying, upon reasonable notice, all documents that relate to the
manner and form in which respondent has complied with this order.
(D) Notify the Federal Trade Commission at least thirty (30) days
prior to any proposed change in respondent, such as dissolution,
assignment, or sale resulting in the emergence of a successor
corporation, the creation or dissolution of subsidiaries, or any other
change in respondent that may affect compliance obligations arising out
of this order.
V
It is further ordered that this Order shall terminate on [insert
date twenty years from the date of issuance].
Appendix A
[Date]
[Respondent's Letterhead]
The Federal Trade Commission has conducted an investigation into
certain rules and practices of the multiple listing service (``MLS'')
operated by the Port Washington Real Estate Board (``PWREB'') that have
been alleged to be unlawful restraints of trade. To avoid litigation,
PWREB has entered into a consent agreement. The agreement is not an
admission that PWREB or any of its members has violated any law. For
your information, PWREB is prohibited from the following practices in
connection with the operation of an MLS:
1. Restricting of interfering with any broker's offering or
accepting an exclusive agency listing, or limiting the publication on
the MLS of any exclusive agency listing entered into by an MLS member.
2. Requiring or fixing the rate, range or amount of any split or
division of a commission or other fees between a listing broker and a
selling broker, or restricting any property owner's participation in
the determination of the split or division of any commission or other
fees between the listing and selling brokers.
3. Restricting or interfering with the ability of member brokers or
homeowners to conduct open houses or to place signs on property.
4. Restricting or interfering with the ability of member brokers to
advertise free services to homeowners.
5. Requiring as a condition of membership in its MLS that a member
or applicant for membership operate an office full-time or engage in
real estate brokerage full-time in PWREB's service area.
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President
Port Washington Real
Estate Board, Inc.
Analysis of Proposed Consent Order to Aid Public Comment
The Federal Trade Commission has accepted an agreement to a
proposed consent order from the Port Washington Real Estate Board,
Inc., which operates a multiple listing service serving the area
surrounding Port Washington, a community in Nassau County (Long
Island), New York.
The proposed consent order has been placed on the pubic record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
[[Page 35910]]
agreement and the comments received and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
order.
The complaint alleges that the Port Washington Real Estate Board,
Inc. (``PWREB''), in combination with its member brokers, has through
its multiple listing service adopted certain rules and policies and
engaged in certain practices that have restrained trade in the
provision of residential real estate brokerage services in PWREB's
service area. The complaint alleges that this conduct violates Section
5 of the Federal Trade Commission Act.
PWREB has signed a consent agreement to the proposed consent order
that prohibits it from restricting or interfering with any member
broker's offering or accepting exclusive agency listings, or
restricting the publication on its multiple listing service of
exclusive agency listings submitted by a member. An exclusive agency
listing is defined as a listing under which a property owner appoints a
broker as exclusive agent for the sale or lease of the property at an
agreed commission, but reserves the right to sell the property to a
direct purchaser (one not procured through the efforts of a broker) at
an agreed reduction in the commission or with no commission owed to the
agent broker.
The proposed order also prohibits PWREB from suggesting or fixing
the range or amount of any division or split of commissions between a
listing broker and a selling broker, or restricting a property owner's
participation in the determination of the commission split between the
brokers. A selling broker is defined as any broker, other than the
broker with whom the property is listed, who locates the purchaser for
a listed property.
The proposed consent order further prohibits PWREB from restricting
or interfering with the ability of member brokers or homeowners to hold
open houses or place signs on a property (provided, however, that PWREB
may require members to comply with any local ordinances covering open
houses or signs). The order also prohibits PWREB from restricting or
interfering with the ability of member brokers to advertise free
services to property owners.
Finally, the proposed order prohibits PWREB from conditioning
membership in or use of a PWREB multiple listing service on a broker
operating a full-time office, or operating an office in the territory
served by PWREB. The order provides, however, that PWREB may adopt a
reasonable and nondiscriminatory policy to assure that members are
actively engaged in real estate brokerage and that listings published
on the multiple listing service are adequately serviced.
The proposed order requires PWREB to mail a letter to its members
(and for three years, to all new members, applicants, or persons who
inquire about possible membership) summarizing the provisions of the
proposed order. The order also requires PWREB to modify its by-laws,
rules, and regulations to conform to the provisions of the proposed
order, and to provide members with copies.
The proposed order provides that the order shall terminate 20 years
after the date of its issuance by the Commission.
The purpose of this analysis is to facilitate public comment on the
proposed order, and it is not intended to constitute an official
interpretation of the agreement and proposed order or to modify in any
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 95-17058 Filed 7-11-95; 8:45 am]
BILLING CODE 6750-01-M
