Duty to Adopt and Enforce the Code of Ethics
This document has as its basis Recommendation #1 of the Leadership Team Report on Code of Ethics Enforcement which provides: NAR should emphasize and publicize the membership obligation of boards and associations to receive ethics complaints and to conduct appropriate enforcement hearings; should publish the charter revocation procedures that may be invoked should boards fail to enforce the Code of Ethics; and should take an aggressive role in ensuring that the boards and state associations meet their obligation to enforce the Code of Ethics.
Following are the specific articles and sections of the National Association's Bylaws which support Recommendation #1. Following that are the Procedures for Consideration of Alleged Violations of Article IV, Section 2 of the National Association's Bylaws.
ARTICLE III - TERRITORIAL JURISDICTION
SECTION 1. Except as provided in Section 2 of this Article, the territory of a Member Board shall be defined by the Board of Directors of the National Association, taking into consideration the ability of the Board to service its members and the public, to enforce the Code of Ethics, and to safeguard the registered marks of the National Association. All Member Boards shall have the same privileges and responsibilities set forth in this Article.
SECTION 3. Jurisdiction of a Member Board is hereby defined to mean:
(A) The right and duty to control the use of the term REALTOR®, REALTORS®, and REALTOR-ASSOCIATE® jointly and in full cooperation with the NATIONAL ASSOCIATION OF REALTORS® subject to the conditions set forth in these Bylaws, including the duty to promptly report to the NATIONAL ASSOCIATION OF REALTORS® any unauthorized or improper use of such terms and to fully cooperate and coordinate with the NATIONAL ASSOCIATION OF REALTORS® in any and all attempts to halt or prevent any such unauthorized or improper use of these terms, and;
(B) The duty to enforce the Code of Ethics, and;
(C) The authority to accept as a REALTOR®, REALTOR-ASSOCIATE® or Institute Affiliate Member any person engaged in any branch of the real estate business, including brokerage, management, mortgage financing, appraising, land development and building, and other related aspects of the real estate business who maintains an office within the state or within a state whose border is contiguous with that state and who complies with any licensure or other regulatory requirements applicable to his business activities within the state.
ARTICLE IV - CODE OF ETHICS
SECTION 1. Each Member Board shall adopt the Code of Ethics of the National Association as a part of its governing regulations for violation of which disciplinary action may be taken.
SECTION 2. Any Member Board which shall neglect or refuse to maintain and enforce the Code of Ethics with respect to the business activities of its members may, after due notice and opportunity for hearing, be expelled by the Board of Directors from membership in the National Association.
Procedures for Consideration of Alleged Violations of Article IV, Section 2, Bylaws, NATIONAL ASSOCIATION OF REALTORS®
Alleged violations of Article IV, Section 2, Bylaws, NATIONAL ASSOCIATION OF REALTORS® will be received and reviewed by the chairman and vice chairman of the Professional Standards Committee in consultation with staff and counsel. A written response will be requested from any board so charged. Staff and counsel will then attempt to provide technical and procedural assistance to the board cited in the complaint when deemed appropriate by the chairman and vice chairman. Where the efforts of staff and counsel to effect a resolution are unsuccessful, the alleged violation of Article IV, Section 2 will be considered by a special hearing panel of five members of the Professional Standards Committee selected by the chairman that will meet at one of the regularly scheduled meetings of the National Association or, where deemed necessary by the president, at a special meeting called for the purpose. Any challenge to the qualifications of a panel member shall be decided by the chairman. The burden shall be on the complainant to show that the board has failed to satisfy its obligation under Article IV, Section 2.
Both the complainant and respondent may submit supporting documentation of no more than 100 pages in support of the alleged violation or in support of the board’s response to the charge. Such materials must be received by the National Association no later than 30 days prior to the date of the hearing and will be provided to the members of the hearing panel prior to the hearing.
Both the complainant and the respondent may be represented by counsel at the hearing. The procedures to be followed at the hearing will parallel, as closely as possible, those established in the Code of Ethics and Arbitration Manual for the conduct of an ethics hearing, in effect at the time the complainant is received by the National Association. Any variations from the procedures established in the Code of Ethics and Arbitration Manual will be made at the discretion of the chairman of the Professional Standards Committee.
The decision of the hearing panel will be provided to the parties no more than 60 days after the hearing. The decision will be signed by a majority of the hearing panel members or alternatively, will be accompanied by certification from staff that the panel’s decision has been reviewed by and is concurred in by a majority of the hearing panel members.
If either the complainant or respondent chooses to appeal the hearing panel’s decision, a written request for appeal must be filed with the National Association within 30 days of receipt of the decision by the parties. The request for appeal must specify, in detail, the bases on which the hearing panel’s decision is being challenged. Upon receipt of a request for appeal, staff will put the matter on the agenda of the Professional Standards Committee at its next regularly scheduled meeting. The appeal hearing will be the final matter of business on the committee’s agenda and will be considered in executive session. The party requesting the appeal will have 15 minutes to explain why the decision of the hearing panel should be modified or should not be adopted. The chairman of the hearing panel will then have 15 minutes to respond. Following that, the party requesting the appeal, the chairman of the hearing panel, and the non-appealing party will each have 5 minutes to offer any rebuttal and to make any closing statement. Following this, the parties will be dismissed.
Following the closing statements, the Professional Standards Committee will remain in executive session for the purpose of determining whether the hearing panel’s decision should be affirmed, modified, or reversed. The decision of the Professional Standards Committee will be final and binding and not subject to any further review or appeal with the sole exception that any recommendation that a board’s status as a member of the National Association be terminated shall be reported to the Board of Directors with the final decision to be made by the directors.
In instances where no appeal is made to the decision of the hearing panel within the allotted 30 days, the decision of the hearing panel will be considered final and binding and not subject to further review or appeal but shall be reported by the chairman of the hearing panel to Professional Standards Committee at the next regularly scheduled meeting for informational purposes. Any recommendation that a board’s status as a member of the National Association be terminated shall be reported to the Board of Directors with the final decision to be made by the directors.
In the event the charter of any board is revoked, the jurisdiction shall revert to the status of territory unassigned by the National Association, and this shall be administratively entered upon the board jurisdiction records of the National Association, and a report shall be made to the Membership Policy and Board Jurisdiction Committee.