NAR: Association Executives: Shared Professional Standards Administration Guide

Program Spotlight: Shared Professional Standards Administration

This month’s Shared Service spotlight focuses on creative ways State and Local REALTOR associations are working together to assure that members have access to competent, efficient, and fair professional standards processes.


"Even associations with good resources can find that the whole process runs smoother when associations band together to consolidate their administrative and hearing processes. Members benefit from a more efficient and consistent process, plus a wider pool of trained hearing panel volunteers." -- Cathy Whatley, NAR President

Listen to NAR president Cathy Whatley speak about Shared Services. Click on the link below:

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Shared Services Partnering Associations: North Shore-Barrington Association of REALTORS® with 8 other Northern Illinois associations; the Minnesota Association of REALTORS® and its local associations; the California Association of REALTORS® and its local assocations.


Shared Professional Standards Services – Successful Models
When it comes to associations sharing services, professional standards is likely the service shared by the most REALTOR® associations. Sharing this professional standards administration or enforcement not only saves associations money, time, and effort, it spotlights that the code of ethics uniformly applies to all REALTORS® regardless of the association to which they belong. Professional standards is a service all associations can share whether it’s simply sharing a pool of hearing board members or sharing the administrative burden through a shared staff person.

In northern Illinois, nine associations have come together to form a multiboard agreement for professional standards hearings and arbitrations to ensure that when a practitioner or a consumer files an ethics complaint against a REALTOR, the issue is aired and resolved efficiently and effectively.

“In the old days it used to take months to even get a hearing,” says Terry Penza, EVP of the North Shore-Barrington Association of REALTORS®, one of the nine in the Northern Illinois agreement. Some delays were caused by confusion over who does the paperwork and who sets up the hearings when a complaint is between members of two different boards. Other delays were caused by difficulties finding enough members to form an impartial hearing board for the complaint. “With ethics complaints, you either have 50 cases on your desk or nothing for months,” says Penza. So there’s often no staff to handle the rush, which also caused delays in the process.

Yet, the Northern Illinois agreement addressed these issues and more in a new streamlined process. Under the agreement, the association of the complainant is responsible for all paperwork and scheduling mediation or hearings. Previously, both associations had to coordinate each side of the complaint. It’s not less work for the associations over all, says Penza, “but it clarifies the duties makes the process run smother. And the member on the complaining side is usually the most motivated to see the process through.”

To ensure the availability of enough REALTORS® to serve on hearing boards, each association in the agreement appoints trained volunteers to a standing pool of members. The Illinois state association offers annual training for all professional standards volunteers and the North Shore association requires that those serving on the hearing boards from their association take the course every other year. Still, says Penza, “we’ve just changed our hearing board requirements from five volunteers to three because it’s difficult to find hearing board participants who can meet on the same day.”

The Northern Illinois multiboard agreement, which Penza drafted several years ago, covers nearly 25,000 members, but not all associations in her area have signed on. “Some associations may not like the idea of their members being judged by other association’s members,” says Penza, “but for our members it’s working wonderfully.”

(The agreement between the nine REALTOR®associations of northern Illinois to establish multiboard professional standards enforcement procedures is posted in the REALTOR®Association Resource Exchange, Click Here.)

In Minnesota, as with many other states, all professional standards is administrated by the state association. Nearly eight years ago, members asked the state association to develop a way of administering professional standards that would be consistent and uniform for everyone, says Linda Modlinski, Minnesota’s director of member services. “We developed a voluntary plan along with NAR’s board policy advisors that allows all local associations to transfer their enforcement authority to the state association, that then handles all the paperwork and procedures,” says Modlinski. All of the associations agreed to the new plan and small associations were particularly happy to be relieved of a duty that took up precious staff time and limited resources, she says.

Today, Minnesota has a staff member whose full-time job is to answer consumer calls, field complaints from REALTORS®, and facilitate the hearing and mediation process. Local associations who receive complaints from members or the public forward them to the state association. This cooperation has lead to a method of professional standards education and enforcement that members feel is unbiased and uniform throughout the state, says Modlinski. In fact, the state’s professional standards program is so respected that it receives more applications to serve on hearing boards and as mediators then there are slots available.

“Professional standards volunteers value the experience as a way to learn how to steer clear of compromising situations in their own practice and resolve conflicts,” says Modlinski. Each volunteer who has been educated by the state, is called on to serve on six to seven hearings a year.

In California, the state association helps local associations share professional standards hearing panels by providing a streamlining bylaw option. If associations decide to share a common pool of professional standards hearing board members, each association’s Directors simply vote on the motion at any meeting. Typically, the process involves associations drafting a bylaws change that then has to be voted on by members, usually at an annual meeting. The California association has also written its own manual for professional standards that not only conforms to everything in the NAR manual, but also conforms to California state law.

Many local California associations do share hearing panels and others share administrative staff, says June Barlow, CAR’s vice president and general counsel. The Pacific West association for example has joined with its neighbors to hire a paralegal to handle their professional standards program and the Marin Association shares an association staff person with neighboring associations.

No matter how you share professional standards, cooperating and pooling resources is a win-win situation for you and your members.