Oct. 20, 2009 - Your MLS System Contract and RETS

I've been involved in scores of MLS contract negotiations over the past dozen years, working alongside attorneys to make sure business issues are properly addressed - but the environment keeps changing and I must be ever vigilant to make sure new issues are taken into account so that my clients are well protected.  Last year I posted an article on the subject – “Negotiating Win-Win Technology Contracts” (http://www.realtown.com/mattcohen/blog/negotiating-technology-contracts) but it’s time for an update.

RETS (www.rets.org) has been a boon to the real estate industry, but it has added another level of complexity to MLS system contract review.

Consider RETS when defining contractual performance and uptime language.  Back when RETS was less critical, one might define system speed, functionality, and availability as part of a performance and uptime guarantees solely in terms of common “front end” functions: this search would take a maximum of this amount of time; these statistics would take a maximum of that amount of time; these functions work substantially as they were documented this percent of the time. Now that RETS is becoming more important for many MLSs, benchmarks for the speed, functionality and availability of RETS must be included in the contract either explicitly or as part of more general performance-oriented language. Also, a process for setting benchmarks and the follow-up step of measurement against those benchmarks must be set.

It’s also important to make sure the RETS feed is available, tested, and validated as early in the conversion process as possible, and that there is a contractual obligation on the part of the vendor to provide this in a timely fashion – ideally at least two months before system cutover. This is especially important if your MLS has been providing delimited data and photographs via FTP but would no longer plan to do so with the new vendor. You don’t want a lot of last minute calls from brokers, IDX vendors, statistics producers and other companies getting a data feed from the MLS – all complaining that there is not enough time for them to learn RETS and transition to it. Even if you provided RETS to these companies in the past, the new vendor’s RETS server may likely have some idiosyncrasies or differences in RETS metadata that will cause problems if brokers and others to whom data is distributed don’t have a chance to properly test the new RETS feed properly.

Those are just two examples of how a single technology becoming more important requires MLS system contract changes. MLSs should be wary of signing extensions without appropriate review on contracts that no longer have the relevance they did during the original term and should carefully review their new contracts to ensure business issues are addressed. MLS systems are continually changing and interacting with other real estate information systems in new ways (i.e. SSO) and MLS system contracts have to reflect that. 

Oct. 20, 2009 - RE: Your MLS System Contract and RETS

@Matt:

You are right on here! Technical contracts are only as good as the contracting parties' understanding of their own, and each other's, biz and technical needs. Even if one is a very good lawyer (and I think we all ARE good ;-) an understanding of the technical and implementation issues makes contract negotiating and drafting much easier. I hope we get a chance to work on more of them together!

-Brian

Oct. 20, 2009 - RE: Your MLS System Contract and RETS

Likewise Brian - ensuring that the legal language around the technical and implementation issues is absolutely spot-on is why I enjoy working with industry attorneys such as yourself.