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Part 4, Appendix VI — Cooperative Enforcement of the Code of Ethics

Part 4, Appendix VI — Cooperative Enforcement of the Code of Ethics

Professional Standards Policy Statement #40 provides:

To ensure fair, impartial and knowledgeable enforcement of the Code of Ethics (including arbitration) there must be adequately large groups of knowledgeable, trained REALTORS® and REALTOR-ASSOCIATES® from which the necessary committees and tribunals can be appointed. To this end, Boards and Associations are required to enter into cooperative enforcement agreements to ensure Boards and/or Associations have an aggregate total of at least three hundred fifty (350) primary REALTOR® and/or REALTOR-ASSOCIATE® members from which to compose Hearing Panels. It is recommended but not required that representation/ participation in any multi-board regional cooperative enforcement agreement be on a pro-rata basis. This requirement does not apply in instances where, in the opinion of the state association, unique geographical considerations (e.g., islands, remote locale, etc.), logistical difficulties or other impediments make participation prohibitive. All Boards regardless of size (except Commercial Overlay Boards) must participate with at least one other Board (which may be the state association) in a cooperative enforcement agreement. (Revised 5/08)

Numerous questions have arisen with respect to what is required by this policy and what approaches/techniques are available to Boards/Associations in meeting these standards. The following is provided by the National Association’s Professional Standards Committee to provide assistance. The models that are described below do not exclude other approaches.

At the outset, it is important to understand that the “aggregate total of at least three hundred fifty (350) primary REALTOR® and REALTOR-ASSOCIATE® members” refers to the total number of primary REALTOR® and REALTOR-ASSOCIATE® members of the Board or Boards, not to the number of members available to participate directly in Code enforcement activities. In other words, if a Board has one hundred (100) primary members, it will need to enter into an agreement with another Board with at least two hundred fifty (250) primary members of its own (or with two other Boards with at least two hundred fifty (250) primary members between them, and so on) or into an agreement with the state association so that the aggregate (or total) population of primary members is at least two hundred fifty (250). Again, this does not mean that all two hundred fifty (250) of these REALTORS® must be involved in enforcement activities. (Revised 5/08)

It is equally important to understand that there are a variety of ways that these aggregate totals can be realized. The following are offered for the consideration of Boards and Associations.

Limited Regionalization. Under this approach, two or more Boards retain their respective Grievance Committees to receive and review ethics complaints and arbitration requests. Similarly, requests for procedural review (arbitration) and appeals (ethics) would be considered by the Board of Directors (or a panel thereof) of the Board that had received and initially processed the complaint or arbitration request. Only the Professional Standards Committees of the Boards would be consolidated so that hearing panelists would be drawn from an expanded “pool.”

Comprehensive Regionalization. Similar to limited regionalization except that Grievance Committees and Boards of Directors are consolidated for Code enforcement activities. Thus, if three Boards were party to a comprehensive regionalization agreement, they would have only one Grievance Committee and one Professional Standards Committee among them. For obvious reasons, each Board would retain its own Board of Directors but Directors would be “pooled,” and panels drawn from the “pool,” when engaged in Code enforcement activities other than imposition of discipline.

Regionalization with State Association involvement. If available, Boards may enter into agreements with their State Association of REALTORS® under which the local Board retains primary responsibility for providing hearing panelists but the State Association agrees to augment these efforts by providing members of the State Association’s Professional Standards Committee to serve on Hearing Panels on an “as needed” basis.

(NOTE: Regionalization efforts of the types described above may appropriately include Boards in different states.)

State-wide Regionalization. Under this approach, ethics complaints and arbitration requests are initially received and reviewed by the State Association’s Grievance Committee; hearings are conducted by panels of the State Association’s Professional Standards Committee; and appeals and requests for procedural review are considered by the State Association’s Board of Directors. Where appropriate, these committees may be divided into regions within the state to carry out their enforcement responsibilities.

Reciprocal enforcement agreements. Under this approach, two or more Boards agree to “exchange” enforcement responsibilities. For example, a complaint filed against a member of Board A would be reviewed by the Grievance Committee of Board B; the hearing would be conducted by a Hearing Panel of Board B’s Professional Standards Committee; and any appeal or request for procedural review would be conducted by the Board of Directors of Board B. Imposition of discipline would remain that of Board A’s Board of Directors. Reciprocal agreements may be between Boards in different states.

While State Associations are not required to enter into agreements to support and assist local Boards in their Code enforcement efforts, the National Association’s Professional Standards Committee strongly encourages their active involvement in these efforts.