Organizational Structure

Organizational Structure & Policies


Membership:

REALTOR-ASSOCIATE® Membership
The REALTOR-ASSOCIATE® program was adopted by the National Association's delegate body at the 1972 Annual Convention in Honolulu. The program provides a membership classification for salespersons who wish to participate in the work of the local, state, and national associations. The REALTOR-ASSOCIATE® is generally engaged in the real estate profession other than as a principal, partner, or corporate officer, and is associated with a REALTOR® member of the local association.

The salesperson who chooses to become a REALTOR-ASSOCIATE® has the opportunity to participate individually in association activities at every level.
He or she enjoys special professional recognition through the right to use the term REALTOR-ASSOCIATE®, which identifies the salesperson as one who subscribes to the high standards of practice set forth in the Code of Ethics.

All Active (or all REALTOR®) Membership
A number of associations have elected to have all licensed salespersons and brokers qualify as REALTOR® members. The all REALTOR® association is a trend in many states; however, the local association retains the right to make this determination. Regardless of whether an association is all REALTOR® or maintains the REALTOR-ASSOCIATE® classification, eligibility qualifications for persons other than principals, partners, or corporate officers applying for REALTOR® or REALTOR-ASSOCIATE® membership may not exceed those provided in the National Association's membership qualification criteria for non-principals.

Policies to Consider
Conditions vary in different sections of the country that warrant the imposition of local standards and regulations. Policies and programs adopted must not constitute a restraint of trade, an inequitable limitation of membership, or be an activity unrelated to the normal functions of a REALTOR® association. To assist you in ensuring that your association has no regulations or policies that could be subject to attack by either state or federal agencies, or could be contrary to the constitution and bylaws of your state and the National Association, use the services of local legal counsel, your state association, and National Association staff.

Updating Your Bylaws
Model bylaws for local REALTOR® associations are available from the National Association and are presented in two formats: for associations with both REALTOR® and REALTOR-ASSOCIATE® members, and for associations adopting the all REALTOR® membership concept. It is recommended that associations adopt verbatim, with review and advice of legal counsel, the model bylaws recommended by the National Association.

If a local association elects to adopt bylaws other than the model bylaws, it is required (effective January 1, 1980) that the local association adopt verbatim and incorporate into its bylaws articles I, II, III, VII, VIII, IX, XV, and XVII, as found in the model bylaws. The model bylaws are available on the Board Policy and Programs website on REALTOR.org® at www.realtor.org./mempolweb.nsf.

Your Tax-Exempt Status
Your association is not automatically tax-exempt. First, make sure your association has qualified for tax-exempt status, and then apply for the exemption. Minimum requirements to qualify for a 501(c)(6) tax-exempt status include:

• Being organized to promote a common business interest
• Being nonprofit (not ordinarily engaged in a commercial business activity)
• Having no earnings inure to the benefit of the individual members
  These being established, you can file a request for exemption and then file annual tax returns. For more detailed requirements and assistance, contact your association's legal counsel or accountant.

Board of Choice
On January 1, 1996, NAR's Board of Choice became mandatory. Additionally, Board of Choice across state lines became mandatory on July 1, 1996. The following summary shows what this means for your association:

Membership

• REALTOR® membership in a local association is no longer based on office location. Rather, REALTORS® (principals) may choose primary membership in any local association in the state where the REALTOR® is licensed and has an office, or in a contiguous state. One of the principals in a real estate firm must be a REALTOR® member of the local association in order for licensees affiliated with the firm to select that association as their primary association.
• Each principal, partner, corporate officer or branch office manager acting on behalf of a principal actively engaged in the real estate business within the state or within the contiguous state in which the office is located, must be a REALTOR® if any other principal of the firm, partnership or corporation is a REALTOR® member.
• Nonresident membership has been replaced by "secondary'' membership. Some licensees may want membership in more than one local board or association. Terms for membership in a secondary board or association will be no more stringent than for primary members. Non-principal licensees can be members of secondary boards or associations even if their designated REALTOR® isn't, but they may use MLS services only if the designated REALTOR® participates in the MLS.

Code of Ethics

• Complaints alleging violations of the Code of Ethics and requests for arbitration may be filed in any local board or association where the REALTOR® holds membership or participates in, or accesses the association's MLS.

Services and MLS

• REALTORS® are entitled to purchase services from associations other than their primary association without the necessity of holding membership in those associations. Service fees are determined by the local association.

Three-Way Agreement

The term 'Three-Way Agreement' refers to the relationship between the NATIONAL ASSOCIATION OF REALTORS®, the state association, and the local associations of that state. The agreement requires that a REALTOR® or REALTOR-ASSOCIATE® member of any constituent local association must also be a member of the National and appropriate state association.

This agreement further grants to state and local associations the right to use the term REALTOR® in their names and grants them the right to use the term REALTOR® and REALTOR-ASSOCIATE® within their territorial jurisdictions and to grant the right to use the term REALTOR® or REALTOR-ASSOCIATE® to such individuals as deemed qualified for membership. In turn, member associations agree to accept the charge of properly granting and regulating the use of the terms REALTOR® and REALTOR-ASSOCIATE®; to subscribe to the Code of Ethics of the National Association; and to uphold and enforce the Code within the association's jurisdiction. The local associations also agree to maintain membership in good standing in the state association of the state in which they are located.

The State Association

The state association is a valuable link between the local and National Association. The state association has two basic purposes:

1. The state association closely integrates the work of local, state, and national components. States encourage and maintain open lines of communication among the three tiers of the REALTOR® pyramid.
2. The state association permits individuals in the real estate business, but with said business not located in the jurisdiction of a local association, to become individual members of the state and National Associations. This is set forth in the Constitution of the National Association.

Some of the other important duties and responsibilities typically performed by the state association are as follows:

• Coordinates statewide programs and activities among local associations.
• Serves as a liaison, on behalf of the local
• associations with the state's executive, legislative, and regulatory agencies.
• Publishes an informational membership
• publication for local associations and individual members.
• Liaison with the state licensing agency to promote effective real estate licensing and regulatory activity.
• Sponsors annual leadership conference to train new leadership (newly elected officers and directors, committee chairmen and committee members).
• Provides continuing education for REALTORS® and REALTOR-ASSOCIATE®s through the REALTORS® Institute (leads to the GRI designation for those who complete the program).
• Sponsors an annual state convention for social, business, educational, and inspirational purposes.
• Sponsors "REALTOR® of the Year" program to select the state's outstanding REALTOR®.
• Sponsors regional district or area meetings to provide a grass-roots liaison with local associations.
• Reviews the legal implications of state law and city or county ordinances within the state as they relate to real estate.
• Implements policy set forth by the National Association for the state association and its local associations, members of such associations, and individual members of state associations.

A state association can provide specialized expertise to local associations, especially the association without paid staff, and to the National Association when local or regional matters affect common purpose.

The Local Association

The local association is the most visible and best-known component of the REALTOR® organization. It is at this level that members can actively participate on a regular basis and contribute to achieve common goals to better the industry.

The following list of activities provides a partial picture of a local association's function:

• Provides the organization, administration, and execution of REALTOR® policy.
• Provides a headquarters or "place" for REALTORS® to discuss plans and to implement policy in which they are in agreement.
• Elects its leadership and selects its staff to execute final decisions.
• Grants use of the terms REALTOR® and REALTOR-ASSOCIATE® to eligible members and ensures proper use of both terms.
• Provides educational meetings and seminars on real estate topics.
• Enforces the NAR Code of Ethics and provides an arbitration process for contractual disputes between REALTORS® and between REALTORS® and their clients. (The local association is required to have a professional standards committee charged with such responsibility, subject to provisions of the bylaws and to control by the board of directors.)
• Is the collective voice of all its members, by virtue of electing--through democratic processes -- its officers and directors, by appointing REALTORS®
• and REALTOR-ASSOCIATE®s to its committees, by having membership meetings, and by entertaining suggestions and complaints.
• Provides training in public service and organized real estate through service on committees and in elective positions.
• Provides, through tested and proven service on the local association level, an opportunity for service on the state and national level.
• Organizes and maintains the important function of cooperative business practices, such as an MLS.
• Often provides a real estate library, training films and cassettes, standard business forms, advertising, publicity, public relations, and the opportunity for civic participation on behalf of the association and its members.

A local REALTOR® association can be a great force for the public welfare of any community, and it can be a tremendous service to and on behalf of its REALTOR® and REALTOR-ASSOCIATE® members.