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San Diego area real estate associations sue to dissolve local MLS, Sandicor

(REAL ESTATE NEWS) Three real estate boards are at war – SDAR sued NSDCAR and PSAR earlier this year, and now, the latter have sued to dissolve Sandicor which is the center of the battle.

sandicor

NSDCAR, PSAR file in California against Sandicor

There has been a long-brewing, quite nasty battle in The Golden State, with regional MLS provider, Sandicor, Inc. smack dab in the middle.

Sandicor is owned by three real estate boards/associations: Pacific Southwest Association of REALTORS® (PSAR, ~2,500 members), the North San Diego County Association of REALTORS® (NSDCAR, 5,300+ members) and Greater San Diego Association of REALTORS® (SDAR, ~12,000 members).

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NSDCAR and PSAR have now filed a complaint in the San Diego Superior Court to dissolve Sandicor as a legal entity, but it’s not because they have a problem with Sandicor, rather a long-term fight with SDAR over the MLS.

We have reached out to SDAR for their position on the matter (update below).

With Sandicor gone, what will members use?

NSDCAR and PSAR said in a release that they plan for their members to access the statewide California Regional Multiple Listing Service (CRMLS), which PSAR’s 2016 President, Anthony Andaya refers to as “more robust” and implies it would be a bigger benefit to consumers, agents, and brokers.

Andaya opined, “A move to an MLS that is controlled by brokers who own the data and endorsed by our state association provides our agents with an enhanced ability to serve the clients.”

Behind the lawsuits

In January of 2016, SDAR sued PSAR and NSDCAR for a hefty list of reasons that boil down to an anti-trust lawsuit:
antistrust SDAR lawsuit

In the filing, SDAR alleged that NSDCAR and PSAR dominate the board of Sandicor and exclude them (SDAR) by cutting off listing data access regardless of their contract. They add (among other things) that since NSDCAR and PSAR are the sole shareholders of Sandicor, Inc., that their power has been used as “an anticompetitive weapon,” and that the two “milked [Sandicor’s] resources for their own enrichment, and frustrated its purpose, all while actively preventing Plaintiff from participating in corporate decisions.”

The court has since granted motions to dismiss the claims, and Raylene Brundage, NSDCAR 2016 president said in a statement that SDAR had attempted to “block progress to improve Sandicor,” as well as blocked talks of a Sandicor merger with CRMLS, “despite our members’ requests.”

[clickToTweet tweet=”BREAKING: The answer to SDAR, PSAR, NSDCAR, and Sandicor’s long battle? Dissolve Sandicor.” quote=”The answer to SDAR, PSAR, NSDCAR, and Sandicor’s long battle? Dissolve Sandicor.”]

California’s unique challenges

“About half of all MLS systems in California do not share data with each other, which means brokers and their agents that practice business across MLS boundary lines must pay extra fees to join multiple MLS databases,” added Andaya. “It is time to adjust and redefine how we do business so consumers will continue to have confidence in knowing their agents are the go-to, trusted resource for their real estate needs.”

“We understand that consumers sometimes get more information from Internet portals than agents using an MLS,” said Brundage. “However, the information from these sites can be incorrect or outdated. Agents deserve access to the same amount of information as consumers. When we cooperate, then we all do better business. Standardized data and a single point of access is the best way we can truly serve the consumer. Clients want to trust that their sales agent has the best resources available on their behalf. It is critical for the health and vitality of our industry.”

SDAR’s full statement:

The SDAR focus and intention is to insure that nearly 13,000 real estate professionals who rely upon us as members for service and support, continue to have that service and support without distraction or interruption. Our goal is seamless resolution.

Unfortunately, the future for 19,000 MLS subscribers in our area will be greatly impacted by the actions of both Pacific Southwest AOR and the North County San Diego AOR. SDAR has for many years, worked to resolve service issues at Sandicor despite having a minority of votes, (with 12,889 members SDAR has 4 of 11 votes, PSAR has 2,201 members and 3 votes, and NSDCAR with 4,628 members has 4 votes). We know that Sandicor is a shared and valuable resource to our community of REALTORS®, and we have constantly worked to re-focus Sandicor to its core mission of serving REALTOR® members and real estate professionals, while guarding against excesses and mismanagement of our shared MLS. In the end, SDAR’s stewardship obligations necessitated formal measures, when informal measures and proposed controls were rejected.

Inexplicably, the other two shareholders seek to dissolve Sandicor. We believe their actions negatively impact the MLS and further distract and drain its limited resources. As we are advised, laws governing the agreement, and the parties’ shareholder agreement prevent a dissolution of Sandicor. It is also important to note that if those two shareholders make the unfortunate decision to leave, SDAR stands prepared to exercise the buyout provisions of the governing documents and to continue to operate Sandicor for all of the MLS’s subscribers. There will be no interruption of services.

Most unfortunate is that the other two associations, which have already merged in all but name, are using their MLS control, and now their attempt to destroy Sandicor altogether, as mere cover for a membership fight, one which is endangering our member’s primary business tool in the process. They cannot survive alone, and cannot formally merge or they give up control of Sandicor, so they are attempting to destroy our members’ most valuable business tool rather than compete on a level playing field with SDAR.

For all of those reasons, SDAR’s pending federal litigation is proceeding. Nine of SDAR’s claims are moving forward, and the court is evaluating two additional issues. As the other two shareholders disclose information regarding their roles in Sandicor’s management and the other issues in the lawsuit, and we are hopeful that this first step to transparency will aide in our continuing effort to protect the MLS for all of its members.

Story updated 3:42 cst to include SDAR’s statement.

#BoardBattle

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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