Questions and Answers
1. Can the Board of Directors direct a Grievance Committee to always (or, conversely, never) solicit responses in ethics and arbitration proceedings?
Yes, but such direction might prove limiting in some instances. For example, given a timely filed arbitration request where the Grievance Committee is able to determine that an arbitrable issue exists of a mandatory nature and that all appropriate parties are enjoined, there would be little cause to solicit a response. But this might not be true in every instance.
2. A respondent in an ethics hearing has notified the Board that she will be represented by legal counsel. Is it appropriate for her counsel to take an active role in the hearing?
Every party to an ethics or arbitration hearing has the right to be represented by legal counsel. Counsel may take an active role in presenting the opening and closing statements, the party's claim/defense, and the cross-examination of the other party and the other party's witnesses. Regardless of how actively counsel participates in a hearing, it is important to remember that no REALTOR® may refuse to answer questions directly put to him or her (though the party may confer with counsel prior to answering), and at no time must a Hearing Panel countenance any attempt by counsel to harass, intimidate, coerce, or confuse the panel or any party to the proceeding.
3. A salesperson is the respondent in an ethics complaint. The respondent asks that his principal broker (who is also a REALTOR®) serve as his counsel during the hearing. Is this permitted?
Yes. As used in the Code of Ethics and Arbitration Manual, the term "counsel" refers to an attorney at law or to a REALTOR® of the parties' choosing (or both) in an ethics proceeding. However, it would be inappropriate for anyone other than a licensed attorney to act as counsel for a party to an arbitration proceeding.
4. What does NAR recommend with respect to an Executive Officer's role in ethics and arbitration hearings?
Whether an Executive Officer attends hearings in an administrative capacity, or participates pursuant to the optional hearing officer policies, is a matter of local discretion. Some Boards and Associations have determined that it is beneficial to have the Executive Officer present to provide technical assistance and expertise, while other Boards and Associations choose to have one of the panelists (or Board counsel) provide procedural guidance. This is a matter to be determined by each Board and Association depending on, for example, staff resources, staff experience in professional standards matters, hearing panelists’ experience relative to procedures and enforcement of the Code of Ethics, the complexity of the issue, and whether or not Board counsel will be present.
5. Our Board is small, and if we are unable to impanel an impartial tribunal of five Directors to consider an appeal, can we refer the appeal to another Board?
No; if a Board is unable to impanel an impartial appeal tribunal, the Board of Directors could refer the matter to the State Association. Refer to Professional Standards Policy Statement #18 in the Code of Ethics and Arbitration Manual.
6. How long should our Board retain professional standards records?
The National Association has no policy governing retention of professional standards records. Boards are encouraged to consult legal counsel when determining how long professional standards records should be kept. NAR recommends that the results of an ethics hearing be retained permanently; records relative to the rest of the ethics file should be retained for one year after any discipline has been complied with absent a threat of litigation. In arbitration cases, records should be retained for one year after the award has been paid absent a threat of litigation. Minimally, all professional standards records should be retained until the appeal or procedural review period has expired and it is recommended that the final decision of arbitration Hearing Panels and the Board of Directors relative to ethics proceedings be retained permanently in the respondent’s membership file. For more information on document retention see the articles on Realtor.org: “Document Retention: What Not to Trash” and “Association Record Retention.” (Revised 11/14)
7. Can an extension be granted for responses to be submitted to the Board of REALTOR®?
Yes; extensions can be granted as a matter of discretion by the appropriate tribunal.
8. Can an individual who is not a named party attend an ethics or arbitration hearing?
No; attendance at any hearing is limited to the parties and the parties' respective counsel and/or witnesses (witnesses are excused except during their testimony); the Hearing Panel members (including alternates); Board staff and/or counsel, as deemed necessary; and the court reporter, if utilized. In any ethics proceeding, the REALTOR® principal, consistent with Part Two, Section 13(d) of the Code of Ethics and Arbitration Manual may attend. In any arbitration proceeding, REALTOR® nonprincipals and REALTOR®-Associates who have a vested financial interest consistent with Part Ten, Section 44(a)(2) of this Manual may also attend.
9. Must our Board grant a postponement each time one is requested? Or, if one party receives a postponement, is the other party automatically entitled to a postponement if requested?
A Board is under no obligation to grant a postponement, much less honor repeated requests for postponement. However, extenuating circumstances should be considered in determining if a requested continuance will be granted. Parties’ requests for continuances shall only be granted when all parties mutually agree to a subsequent specified date, or when the hearing panel chair determines that denying the continuance would deny the requestor a fair hearing. (Revised 11/14)
10. What is an "arbitrable issue?"
An arbitrable issue is defined as a question arising out of a transaction between parties to a contract (and specific non-contractual disputes as defined in Standard of Practice 17-4). To proceed with arbitration, there must be a dispute between the parties that arises out of a real estate transaction and a disagreement between the parties as to entitlement to a sum of money. See Part Ten, Section 43, Arbitrable Issue, of this Manual.
11. Can a mandatory arbitration exist between two cooperating brokers?
Possibly. Refer to Appendices I and II to Part Ten of the Code of Ethics and Arbitration Manual and Standard of Practice 17-4.
12. A Board has scheduled an arbitration hearing, and the respondent advises the Board that he will not attend the hearing. Can the scheduled hearing proceed?
Arbitration in the absence of a respondent may take place where permitted by state statute or case law. The Code of Ethics and Arbitration Manual, in Part Ten, Section 48, provides three (3) options addressing the circumstances under which Boards may conduct arbitration. Boards should consult with Board or State Association legal counsel and determine which of these options the Board should adopt.
Additionally, no arbitration hearing may be held in the absence of the complainant, and no award may be rendered without a hearing on the merits.
13. Can a Board, prior to an arbitration hearing being held, hold the disputed funds in its escrow account if voluntarily submitted by the parties?
Yes, but this is a matter of local option. Under no circumstances may a Board require the parties to deposit the funds prior to an arbitration hearing being held. See Professional Standards Policy Statement #8.
14. Can a client request arbitration with a REALTOR® principal?
15. Can a REALTOR® principal invoke arbitration if the dispute arose prior to the time the requestor became a REALTOR®?
No; refer to the Professional Standards Policy Statement #23, Code of Ethics and Arbitration Manual.
16. Who can amend an ethics complaint, and when can it be amended?
Before an ethics complaint is referred to the Professional Standards Committee for hearing, it may be amended either by the complainant or by the Grievance Committee. If the Grievance Committee dismisses an Article(s) cited by the complainant, the complainant may appeal that dismissal to the Board of Directors.
After referral to the Professional Standards Committee, the complaint may be amended only by the complainant with the agreement of the Hearing Panel. The respondent should then be provided with a copy of the amended complaint and be given an opportunity to file an amended response.
An ethics complaint may also be amended by either the complainant, subject to concurrence of the panel, or upon action of the Hearing Panel during the hearing to add previously uncited Articles or additional respondents. If this occurs, the respondent should be given an opportunity to request a postponement to prepare a response to the amended complaint.
Arbitration requests may be amended to add or delete parties only by the complainant or respondent. During its initial review, however, the Grievance Committee may suggest that such amendments be made in order to ensure that all related claims arising out of the same transaction can be resolved at the same time. Refer to Professional Standards Policy Statement #27, Code of Ethics and Arbitration Manual.
17. Who can withdraw a complaint, and when can this be done?
Complainants may withdraw their complaints at any time prior to the start of an ethics hearing. If a complaint is withdrawn by the complainant after the Grievance Committee determines the complaint requires a hearing, it will be referred back to the Grievance Committee to determine whether a potential violation of the public trust (as defined in Article IV, Section 2 of the National Association’s Bylaws) may have occurred. Only where the Grievance Committee determines a potential violation of the public trust may have occurred may the Grievance Committee proceed as the complainant. A complaint so withdrawn shall not be deemed a final determination on the merits. (Amended 5/04)
18. If the alleged offense is a violation of an MLS rule or regulation and does not involve a charge of unethical conduct or request for arbitration, it may be administratively considered and determined by the Multiple Listing Service Committee, and if a violation is determined, that committee may direct the imposition of a sanction. The recipient of such a sanction, however, may then request a hearing before the Professional Standards Committee within twenty (20) days following receipt of the Multiple Listing Service Committee's decision.
Any alleged violation of an MLS rule or regulation that includes charges of unethical conduct should be forwarded to the Grievance Committee for review and possible referral to the Professional Standards Committee. Refer to Section 7.1, Handbook on Multiple Listing Policy.
19. Is there a policy that would allow ethics complaints that involve several REALTORS® to be consolidated into one ethics hearing?
Professional Standards Policy Statement #34 provides:
Consolidation of Ethics Complaints Arising Out of the Same Transaction. In the interest of maximizing the resources of Boards and Associations, Grievance Committees should use all reasonable efforts to ensure that all ethics complaints arising out of the same transaction or event are consolidated and scheduled for hearing in a single hearing. Respondents to ethics complaints do not have the right to a separate hearing unless they can demonstrate that consolidation of complaints would prevent them from receiving a fair hearing.
20. A principal broker has not been named as a respondent in an ethics complaint but wants to attend the hearing in which his sales associate is a respondent. Can he do so?
A principal who is not joined in an ethics complaint as a respondent may be present during the hearing and may even be required by the Hearing Panel to attend the hearing. Whether the principal attends the hearing or not, the principal should receive copies of the complaint and response and be provided with notice of hearing.
21. Can our Board impose "conditional" discipline? For example, can we stipulate that a respondent be suspended until a fine is paid?
Yes. Although suspension may not be imposed as a sanction for greater than one (1) year (and expulsion for not more than three  years), a Board can stipulate that a respondent be suspended (or expelled) until a fine is paid or an educational course is completed. The respondent would be seen as having the "keys to his own cell," meaning that the length of his suspension or expulsion is dependent on his own actions.
22. Does the complainant's REALTOR® principal, if not a co-complainant, have the right to be present during an ethics hearing?
No; only the respondent's REALTOR® principal has the right to attend the ethics hearing (unless the complainant's REALTOR® principal is acting as counsel). Refer to Part Two, Section 4 and Section 13 of the Code of Ethics and Arbitration Manual.
23. A member found in violation has asked for an extension in order to complete the discipline imposed. Can such an extension be granted?
Yes, at the discretion of the Board of Directors.
24. Our Board is considering publishing the fact that a member has been suspended. What should be contained in such a notice?
The nature, form, content, and extent of this notice should be reviewed by legal counsel prior to dissemination. However, such notice would not be expected to go beyond providing the following: 1) respondent's name; 2) respondent's license number or office address, or both, if necessary for identification purposes to distinguish the respondent from another member with the same or similar name; 3) length of suspension/expulsion, when it becomes effective, and when, if suspension is imposed, the individual will have all withdrawn membership rights, services, and privileges automatically reinstated; and 4) the Article violated (or notification of what other duty of membership was breached).
25. A member who is a respondent in an ethics complaint is demanding that the complainant produce certain documents. Can he do so?
No; only a duly authorized tribunal of the Board may require information to be submitted, consistent with Article 14.
26. Can a Board consolidate an ethics complaint and arbitration request filed by the same complainant against the same respondent?
Such an arbitration request and ethics complaint cannot be consolidated in one proceeding, and the member filing them must be so advised. If the complainant still wished to pursue both the arbitration request and the charge of alleged unethical conduct, the two matters must be handled separately. In such cases, the arbitration should be held first to avoid prejudice to the arbitration by reason of any finding as to violation of the Code of Ethics. When the ethics hearing is held at a later time, it should be before a different Hearing Panel and individuals having served on the arbitration panel may not serve on the ethics Hearing Panel.
27. What does the National Association recommend be included in the "Findings of Fact" section of sample form #E-11?
The purpose of the "Findings of Fact" section of Form #E-11 is to provide a clear and concise statement of the facts that led the Hearing Panel to reach its conclusion. For example, the findings of fact for a violation of Article 12 could read as follows: "REALTOR® B was charged with a violation of Article 12. Evidence provided during the hearing showed that his firm had a listing on 123 Pleasant Drive, and that he ran an ad on October 4 for the property which did not disclose the name of his firm. Consequently, the Hearing Panel finds him in violation of Article 12 as interpreted by Standard of Practice 12-5."
Conversely, if a violation was not found, the "Findings of Fact" could read: "REALTOR® B was charged with a violation of Article 12. Evidence provided during the hearing showed that his firm had a listing on 123 Pleasant Drive, and that the advertisement he ran for that property on October 4 disclosed the name of his firm. Consequently, the Hearing Panel finds him not in violation of Article 12 as interpreted by Standard of Practice 12-5."
28. A REALTOR® belongs to Board A only and is a Participant only in Board B's MLS. Can Board A forward the professional standards records of this individual to Board B if the individual has been found in violation of the Code of Ethics at Board B?
Yes, if a REALTOR® is found in violation of the Code of Ethics at one Board, another Board may share that member's professional standards record for progressive disciplinary purposes.
29. Can a complainant refile an ethics complaint or an arbitration request if the complainant withdraws the complaint/request?
Yes, assuming the Grievance Committee has not previously dismissed the ethics complaint/arbitration request and the Grievance Committee finds the refiled matter timely filed.
30. If either an ethics complaint or arbitration request is dismissed, in whole or in part, what information should be included in the dismissal notice?
A notice of dismissal shall specify the reason(s) for dismissing (e.g., the matter is not timely filed, or the allegations, if taken as true, do not appear to support a possible violation of the Article(s) cited, or there is no contractual dispute [or specific noncontractual dispute consistent with Standard of Practice 17-4] between the parties named in arbitration). Any notice of dismissal shall also inform the complainant of their opportunity to appeal the dismissal, and should inform the complainant that although the complaint/arbitration request and attachments cannot be revised, modified, or supplemented, the complainant may explain in writing why the complainant disagrees with the conclusion that the matter be dismissed. (Revised 5/07)
31. If a REALTOR® principal resigns or otherwise causes his or her REALTOR® membership to terminate and there is a current arbitration request pending against him or her, can a complainant amend an arbitration request to name the new REALTOR® principal?
The new REALTOR® principal may only be required to arbitrate if the new REALTOR® principal was a REALTOR® principal of that firm at the time the dispute arose. The complainant can name any REALTOR® principal of the firm at the time the dispute arose and the arbitration can proceed. If the original respondent simply moved from Company A and re-affiliated as a REALTOR® nonprincipal with Company B, the arbitration could proceed against the original respondent because the duty to arbitrate is personal.
32. Can the sample forms contained in the Code of Ethics and Arbitration Manual be amended/changed?
Yes, however, amended forms should not be used until they are first reviewed by counsel to ensure that they conform to state law and to any special requirements established by the Board.
33. If a party appeals an ethics decision or requests procedural review of an arbitration hearing, do they have the right to counsel?
34. If a party who has appealed an ethics decision or requested procedural review of an arbitration hearing fails to appear, must the board of directors proceed with the appeal hearing (or procedural review) in the absence of the involved party?
No. A board may decline to proceed with an ethics appeal or request for procedural review if the party who instituted the appeal (or request for procedural review) fails to appear.
35. If a procedural review (arbitration) is to be conducted and a Realtor® (non-principal) with a financial interest finds himself or herself unable to attend, must he or she be granted a postponement?
No. While a REALTOR® (non-principal) also has a financial interest in the dispute and who is affiliated with a party to an arbitration hearing has the right to attend the arbitration hearing (and any subsequent procedural review proceeding), he or she is not a party to the proceedings and the proceedings may take place in his or her absence.
36. How should probation be used by a hearing panel that finds a violation of the Code of Ethics?
Probation should be used if a hearing panel wants to hold a form of discipline (e.g., a fine) in abeyance during the probationary period not to exceed one (1) year. Any subsequent finding of a violation of the Code of Ethics during the probationary period may, at the discretion of the Board of Directors, result in the imposition of the suspended discipline. Absent any subsequent finding of a violation during the probationary period, both the probationary status and suspended discipline will be considered fulfilled. Conversely, if the hearing panel wants the respondent to comply with discipline, the hearing panel should not place the respondent on probation. (Adopted 11/14)