A First Right of Refusal (FROR) — sometimes referred to as a “break clause” — is a contractual provision under which a seller accepts an offer that allows a buyer the right to submit an offer to include a “break clause” of the potential buyer first getting an offer on their current home with a “First Right of Refusal” to either void the contract or remove the contingency of the purchaser first getting their home under contract if the seller receives another offer.
For MLS reporting and compliance purposes, a First Right of Refusal and a break clause are treated identically. Once an offer is accepted—regardless of the terminology used—the property is considered under contract and must be reported accordingly in the MLS.
Does calling it a “break clause” change how the listing is reported in the MLS?
No.
Regardless of whether the contract uses the term First Right of Refusal or break clause, MLS reporting requirements remain the same.
Terminology does not override MLS status rules.
Does a listing with an FROR or break clause remain Active?
Yes, but once an offer is accepted or the FROR is exercised, the listing is no longer Active.
What status is required when there is an accepted offer with an FROR or break clause?
The listing must be updated to the appropriate status (Contingent or Pending) within three (3) working days of acceptance.
This requirement applies even if:
Contingencies remain
Inspections have not occurred
Why can’t the listing remain Active while waiting for contingencies or inspections?
An accepted offer places the seller under contract. Leaving the listing Active is misleading to:
Cooperating brokers
Buyers
The public
MLS data must reflect the property’s true contractual status, not marketing strategy.
How should an FROR or break clause be disclosed in the MLS?
MLS Participants must:
Use the MLS-designated field and remarks to disclose the FROR.
Ensure remarks accurately describe the situation
Keep information current as circumstances change
When does the three (3) working day requirement begin?
The three (3) working day period begins when the offer is accepted by all required parties, not when:
Earnest money is received
There are no contingencies
Waiting for mortgage approval
Working days exclude weekends and MLS-recognized holidays.
What happens when the FROR is exercised or waived?
The listing must be updated promptly to reflect the resulting contract status and any changes to remarks or contingencies.
What happens if I fail to update the status within three (3) working days?
Failure to comply may result in:
Compliance notices
Fines or other sanctions as outlined in MLS Rules
The MLS may request documentation to verify compliance.
Does ValleyMLS interpret contract language or provide legal advice?
No. ValleyMLS does not interpret contracts or provide legal advice. The MLS’s role is limited to enforcing accurate and timely MLS reporting, regardless of how contractual provisions are labeled.
Bottom Line
Different names. Same rule.
If an offer is accepted:
The listing is Under Contract
The status must be updated within three (3) working days