Will Connecticut’s private listings law impact brokerage practices? 

A law that restricts the marketing of private listings went into effect in Connecticut on Oct. 1, adding to the growing number of states that have proposed or enacted similar legislation.

Senate Bill 340 includes rules for how real estate listings can be marketed, real estate education requirements, and the revision of the title "real estate salesperson" to "real estate agent." 

As the law goes into effect, Compass — one of the biggest proponents of exclusive listings — says it's in the clear to continue its 3-phased marketing strategy, but some local professionals believe some of the area's biggest brokerages will need to adjust their practices.

The law: Simultaneous, broad marketing required

The new law stipulates that any agent representing a seller in a residential transaction must "concurrently" or "prior to" the first time the property is marketed also make the listing available to "the general public" on a "publicly accessible listing platform."

The law also specifies that in order to be compliant, the listing platform must be "reasonably designed to generate broad public exposure," indicating that an MLS, public internet listing platform or other unrestricted electronic listing platform would fulfill its requirements.

Listings on platforms that require an invitation or password to access, or those that are largely used internally by one brokerage or group, will not fulfill the law's broad, public exposure requirement. However, a provision in the law allows for truly private listings and office exclusives — as long as those properties are not publicly marketed. In those cases, a seller must sign a marketing opt-out form.

Local associations leaders: Some brokerages may not be in compliance

Connecticut Realtors Legislative Committee Chair Joanne Breen, who testified on Senate Bill 340 during the legislative session, told Real Estate News that the intent of the law is "to make sure that when a seller makes a decision that they don't want to broadly market, they have an understanding of what they're losing out on."

Since the majority of Connecticut's property listings are already publicly marketed, Breen said she didn't think the law would have a huge impact on the market or agents' day-to-day activities. However, she did say there are brokerages in the state that could be impacted by the law due to their practice of marketing private listings among separate firms — which would make the listing no longer truly private.

"My understanding is there are a few of those larger, mega companies with private listing platforms, and the way the Connecticut law is written, you can't say, 'I'm privately marketing this property' and then at the same time market it to two or more companies that are getting the information on this property without also putting it on a truly open, broad platform [like a portal or MLS]," Breen said.

Deanna Crooks, Greater Hartford Association of Realtors (GHAR) president-elect, praised the law for the conversations she believes it will promote between agents and clients about marketing options and tradeoffs.

"Apart from transparency, there's equity in how the information is shared," Crooks added, recalling times when she has seen buyers miss out on a home they didn't even realize was for-sale until the "sold" sign was posted in the front yard. 

Crooks added that when it comes to "black box" private listings platforms like Compass', "I don't think that is in the spirit of the new law at all."

How Compass sees it

When asked if the brokerage believes its marketing strategy complies with the new Connecticut law, a Compass spokesperson said the law enshrines homeseller choice about how their property is marketed.

"The statute specifically preserves seller choice and declines to require MLS submission if the homeowner doesn't choose it," the spokesperson said. "See It First was built on that choice. Every homeowner who chooses it does so fully informed."

In July, a judiciary subcommittee sent letters to Compass International Holdings Chairman and CEO Robert Reffkin and Midwest Real Estate Data (MRED) CEO Rebecca Jensen requesting more information about the companies' business practices and relationship. The letters also expressed concerns about private listing networks and how they could create "velvet ropes" around certain properties, limiting buyers' access.

Earlier this week while speaking to attendees at the Council of Multiple Listing Services' (CMLS) Open House in Fort Lauderdale, Reffkin leaned hard into recent litigation threats he had made to MLSs over their listing rules. The CEO argued that all he's asking for is "the freedom to put a listing on our website."

Washington law now in effect

In June, a similar law took effect in the state of Washington, but its language is "purposefully vague," according to those who helped craft the bill, making its provisions more open to interpretation.

The law prohibits "marketing residential properties to an exclusive group of prospective buyers or real estate brokers, unless the residential property is also concurrently marketed to the general public and other real estate brokers." However, the law never mentions listing portals, private listing networks or multiple listing services, nor does it define terms like "public" or "private" marketing. 

As a result, some experts say it may be years before the practical implications of the law become clear, most likely after someone files a lawsuit.

Meanwhile, a private listings law in Wisconsin is set to take effect in January 2027, and it requires listings to be publicly marketed within one business day of being marketed to anyone.

Other bills still in limbo

Private listings legislation in New York, Illinois and Hawaii are still up in the air.

New York's Senate Bill S10274 was passed by the legislature in June and continues to sit on the governor's desk. That bill requires listings to be publicly marketed on platforms accessible to the public concurrently when they are marketed on "private or limited access channels."

Bills in Illinois (House Bill 4964) and Hawaii (House Bill 2559) have not seen movement since February and appear to have died in committee. The Illinois bill required listings to be publicly marketed within one calendar day of signing a listing agreement, unless the seller signs an opt-out form, while the Hawaii bill specified that real estate salespeople must provide written disclosure to sellers when marketing residential properties through private or off-market listings.

Although those bills are tabled for now, they could be resurfaced in a new legislative session by a new sponsor.