Work Group Purpose

To review procedures for administering and implementing NAR’s New Member and Quadrennial Ethics Training requirement and to determine if and how procedures can be enhanced.

Background

The quadrennial ethics training requirement that requires new members to complete ethics training and continuing members to complete quadrennial ethics training once in every four year cycle started its third cycle in 2009. (The requirement went into effect January 1, 2001, and the first quadrennial cycle was 2001 through 2004; the second cycle was 2005 through 2008.)

An AEC work group was formed in 2005 to gather and evaluate feedback from associations on issues that surfaced during the first quadrennial cycle and to determine whether changes were necessary. The work group’s key recommendations, which were approved by the AEC and then the Professional Standards Committee, resulted in the following changes:

• Beginning with the second quadrennial cycle members are automatically suspended if they do not meet the requirements and, if they do not take the training within 60 days of suspension, their membership is terminated.
• NRDS policy was amended to require POEs to record REALTOR® compliance with the quadrennial ethics training requirement in NRDS.

Based on feedback from some associations who continue to face challenges in implementing the program, AEC leadership thought that the closing of the second quadrennial cycle was a good time to conduct another review of the process. The AEC Quadrennial Ethics Training Review Work Group was formed and the work group met on the following dates: September 30 – October 1, 2009 (Chicago); November 15, 2009 (San Diego); April 17, 2010 (Quebec City).

Following the 2010 Midyear Meetings the work group sought input from all AEs, as well as from the NAR Professional Standards Committee, for consideration before finalizing the report. The work group met by phone on September 8, 2010, to consider the input received and to revise the report recommendations accordingly.

Key Program Components

The work group discussions focused on the following four components of the Quadrennial Ethics Training requirement:

1. Course offerings – Work group members discussed the course criteria and objectives; possible enhancements to the online course; the variety and quality of instructors; the proliferation of outside courses; ethics courses offered by state licensing agencies; quadrennial ethics training for appraisers.
2. Record-keeping – Work group members discussed NRDS as a record-keeping tool for the ethics training requirement; POE procedures in recording course completions; the codes, software, etc. that are used to record completion.
3. Promotion/communication – Work group members discussed the need to continuously market and promote the value of the course and why the training requirements exist, as well as information on course requirements and procedures; the need to create a greater awareness of the requirement among volunteer leaders; and the need for NAR to promote the availability of the instructor training materials for the third quadrennial through the INS and on REALTOR.org.
4. Enforcement – Work group members discussed the disparity that exists among associations with regard to the effort put forth in administering the requirement, as well as the issue of noncompliance and the consequences of noncompliance.

Input Gathering Process

AE survey -- Prior to the first work group meeting, a survey was sent to all AEs (successfully delivered to 790 AEs) to determine what they think about the efficiency of their association’s procedures for implementing and administering the training requirements; to ascertain concerns about the administration process; and to gather general feedback on program administration. A total of 343 local association AEs participated in the survey, yielding a 43% response rate. Some key findings include the following:

• More than half of the respondents (52%) feel that their association has implemented efficient administrative procedures and 35% think that their association’s administrative procedures are working, but feel they need to make some modifications.
• 79% of all respondents report concerns with their association’s current procedures for administering the ethics training requirement. The most frequently noted concerns include the following: record keeping is cumbersome; process is time consuming; addressing non-compliance is difficult/sensitive; members are not receptive to complying with the requirement; difficult to determine if course content meets NAR criteria.
• Associations of 500 members or more are more likely to be concerned about the cost and time spent administering the ethics training requirement, and the difficulties of addressing non-compliance.

NRDS POE Survey – A survey was sent to NRDS POEs regarding tracking and record-keeping issues. The survey was sent to approximately 1000 POEs (primarily membership staff) and 366 responses were received. Survey highlights include the following:

• 88% of respondents currently enter COE course completions in NRDS; however, this figure is likely closer to 92% when you consider that online course completions are entered automatically.
• When asked why they don’t enter COE course completions in NRDS, 49% said they were unaware of this feature; 26% said they don’t have a business reason to track this information; 12% said their membership system does not have this function.
• When asked why they don’t use the standard NAR tracking codes, 52% said they were not aware of the NAR codes.
• 88% said they would consider entering the COE information in NRDS, if the new COE reports indicating course completions become available in NRDS.

Work group members agreed that based on the results, record-keeping is probably handled more efficiently than suspected. There is also a need for more communication and education to increase awareness of POE responsibilities with regard to the quadrennial ethics tracking requirements. Chief staff executives should be included along with POEs/membership staff in the raise awareness initiatives.

Member Survey – With input from Professional Standards Committee leadership a member survey was conducted to measure awareness of the Quadrennial Ethics Training requirement; to ascertain preferences for training formats; and to measure the quality of, member satisfaction with, and perceived effectiveness of the training currently offered. The survey was sent to a random sample of 37,768 REALTORS®. A total of 1,190 REALTORS® participated in this survey, representing a 3% response rate. (The number of completed surveys was large enough for overall responses to be considered statistically valid and representative of REALTORS® in general.) Some key findings include the following:

• 927 respondents (79%) were aware of the Quadrennial Ethics Training requirement and qualified to complete the survey.
• Two-thirds of respondents (65%) completed the requirement in a classroom setting, and most of these (69%) are satisfied with that format. Those who are not satisfied with the classroom training (41%) would like to take the course online, but want this online course to be offered by their state or local association. However, those who did take the course via NAR’s online training are more satisfied with the quality and format of the training and more likely to use this format again than those taking the training in a classroom course offered by a local or state association.
• A large majority of respondents (83%) perceive some benefit in completing the Quadrennial Ethics Training Requirement. Cited benefits are as follows: increased awareness and understanding of the REALTOR® Code of Ethics – 63%; increased awareness of the REALTOR® Code of Ethics enforcement process – 36%; greater understanding of arbitration and dispute resolution – 27%; understanding of the difference between business ethics and the REALTOR® Code of Ethics – 26%; 17% report no perceived benefit.
• Those who completed the training via NAR’s online course are most likely to report all four of the benefits listed and are least likely to perceive no benefit at all. Conversely, those who completed it via an online course offered by their local or state association are most likely to report no perceived benefit.
• There is confusion among respondents as to whether their particular states give Continuing Education (CE) credit for this training.
• Most respondents are waiting until the fourth year of each cycle to complete the requirement. Most feel that their associations notify them properly well in advance of the deadline, but this does not appear to induce them to fulfill it earlier.

Draft recommendations for consideration at the November 2010 REALTORS® Conference meeting:

1. “That the Quadrennial Ethics Training Requirement be consistently referred to and marketed as the REALTOR® Code of Ethics Training Requirement.”
   Rationale: Since a goal of the Quadrennial Ethics Training Requirement is to ensure that REALTORS® understand their Code of Ethics obligations, the Code should be included in the program reference.
2. “That NAR leadership communicate the value of the quadrennial ethics training program to local and state volunteer leaders to help increase awareness and understanding of the training requirement.”
   Rationale: Both staff and volunteer leaders need to approach the quadrennial ethics training requirement as a leadership team, as members are influenced by support and encouragement from their volunteer leader peers. Ongoing communication through the NAR Board and State Leadership Forums, Leadership Summit, Broker Involvement Program, online Presidents’ Leadership Guide, etc., are all mediums that can be used to reach volunteer leaders.
3. “That NAR develop a quadrennial ethics training toolkit for associations to help them administer the program.”
   Rationale: A toolkit that includes correspondence templates, calendars, NRDS record-keeping guidance, the role of leadership, the role of state associations, incentive examples to encourage members to complete the training prior to the last year of the quadrennial, promotion examples appropriate for each of the four years of the quadrennial, social media applications, success stories, myth busters, etc., would help associations save time and expenses in administering the program.
4. “That a session be developed for offering at state and national association AE sessions that provides an overview of key aspects of administering the quadrennial ethics training requirement.”
   Rationale: There’s a need to continuously educate members and associations on the course requirements, procedures for completion, NRDS administration, and the reasons why the training requirement exists. Ongoing education reinforces the value of the training and ensures that AEs and members that are new to the association are informed.
5. “That the NAR Organizational Standards for Local Boards and Associations program be expanded to include criteria specifying that local associations administer and enforce the quadrennial ethics training requirement.”
   Rationale: The Organizational Standards for Local Boards and Associations would serve as a centralized mechanism for tracking duties and responsibilities that are expected by NAR in order to maintain the association’s charter as an NAR member board.
6. “That state associations be encouraged to take a proactive role in supporting local association efforts to implement the quadrennial ethics training requirement.”
   Rationale: In most cases, through economies of scale and range of resources, state associations can provide support and assistance that would benefit local associations throughout the state. Providing lists of qualified instructors, offering instructor training, and certifying instructors are all services that state associations could provide to help their local associations in implementing the requirement.
7. “That NAR’s online Quadrennial REALTOR® Ethics Training Course be redeveloped to incorporate interactive online instructional design formats and techniques and that the course include individual modules covering different specialties and concepts of the Code of Ethics.”
   Rationale: According to the recent NAR member survey, NAR’s Quadrennial REALTOR® Ethics Training online course received slightly higher ratings than classroom courses offered by state and local associations. The survey also revealed that those who completed NAR’s online course are most likely to report a perceived benefit than those respondents who completed the course in another format. NAR’s online course is a primary training option that also fills a need for members who don’t have access to many other course offerings, as well as for those who have not planned in advance to attend a live presentation course. Enhancements that present the course in a more engaging and interactive format and that include content from the various specialty areas will bring greater value to the course and the course participants.
8. “That NAR’s Appraisal Committee be asked to provide content applicable to appraisal practice and NAR’s Code of Ethics, and that such content be developed as a separate course or an optional component of the existing Quadrennial Ethics Training Course.”
   Rationale: A separate ethics course, or course component, with content applicable to appraisal practice would make the Quadrennial Ethics Training requirement more meaningful to the appraisal practitioners as they satisfy their ethical duties of REALTOR® membership.
9. “That NAR offer an online quadrennial ethics training course and that NAR seek ARELLO (Association of Real Estate License Law Officials) approval for such a course. That state associations then be encouraged to seek continuing education approval for this course with their respective real estate licensing authorities.”
   Rationale: Some state licensing commissions (Delaware, Indiana, North Dakota, Oklahoma, Tennessee, and Virginia) recognize educational courses approved by ARELLO as qualifying for the state CE requirement. If NAR offers an ARELLO approved online course, then it may be more easily approved for state CE requirements in those jurisdictions. California and Texas licensing agencies currently offer ethics courses that meet the quadrennial ethics training requirement. Staff at both the California and Texas REALTOR® associations worked with their respective licensing commissions to be sure the online licensing courses met the NAR quadrennial ethics training requirement/criteria.
10. “That an additional required learning objective on ‘procuring cause’ be added to the new and continuing member quadrennial ethics training courses.”
    Rationale: While it may not be reasonable to expect that comprehensive training on procuring cause could be covered in quadrennial ethics training, an overview of this fundamental concept should be included.

Work Group Roster

Chair: Laura Benjamin, RCE, Roanoke Valley Association of REALTORS® (VA)

Vice Chair: Pam Krieter, RCE, Mainstreet Organization of REALTORS® (IL)

Members:
Helen Carter, RCE ,CAE, Knoxville Area Association of REALTORS® (TN)
Ginger Downs, RCE, CAE, Chicago Association of REALTORS® (IL)
David Foster, RCE, CAE, Austin Board of REALTORS® (TX)
Steve Francks, RCE, CAE, Washington Association of REALTORS®
Ann Guiberson, CAE, Pinellas Suncoast Association of REALTORS® (FL)
Kevin King, Wisconsin REALTORS® Association
Marc Lebowitz, RCE, CAE, Ada County Association of REALTORS® (ID)
Dianne McMillan, North San Diego County Association of REALTORS® (CA)
Linda Modlinski, Minnesota Association of REALTORS®
Jenny Pakula, RCE, Oregon Association of REALTORS®
Patrick Reilly, RCE, New York State Association
Candy Roberts-Joyce, RCE, CAE, Middle Tennessee Association of REALTORS® (TN)

NAR Staff
Alice Martin, RCE, CAE, Association Leadership Development
Cindy Sampalis, Association Leadership Development
Diane Mosley, RCE, Member Policy
Rodney Gansho, RCE, Member Policy
Katie Raynolds, Legal Affairs
Chris DeRosa, NRDS

2010 NAR Liaison
Marbury Little, GRI