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Association Policy Violation Resolution Procedure

Overview

  • Article I, Section 2 (a) of NAR's Bylaws prohibits state and local associations and their MLSs from adopting any rule, regulation, practice, or policy inconsistent with, or contrary to, any policy adopted by the NAR Board of Directors. 
  • Article I, Section 2 (b) of NAR’s Bylaws requires state and local associations and their MLSs to be honest and truthful in their communications; to present a true picture in their advertising, marketing, and other representations; to avoid false, deceptive, or misleading advertising and marketing practices; and to refrain from knowingly or recklessly making false or misleading statements about other associations’ programs, products, or services. 
  • Article III, Section 6 of the NAR Constitution provides that “All Member Boards must comply with the Organizational Standards for Local Boards and Associations established by the Board of Directors. Any Member Board that fails to satisfy the Organizational Standards may, after due notice and opportunity for hearing, be expelled by the Board of Directors from membership in the National Association. Each State Association shall enforce the Organizational Standards for Local Boards and Associations within the state. Any State Association which fails to enforce the Organizational Standards may, after due notice and opportunity for hearing, be expelled by the Board of Directors from membership in the National Association.”
  • Other mandatory policies adopted by the NAR Board of Directors are found in the NAR Constitution, Bylaws, Code of Ethics and Arbitration Manual, Handbook on Multiple Listing Policy, and in other NAR documents. Other NAR mandatory policies require adoption/implementation in local and state association governance and administrative documents including bylaws, MLS rules and regulations, and professional standards enforcement procedures. Enforcement of the Quadrennial Ethics Training and dues formula requirements are mandatory, regardless of whether they are included in an association’s governing documents.
  • Most instances of association noncompliance are commonly identified and remedied in the course of NAR’s review of local and state association governing documents. Issues of noncompliance may also be brought to the attention of NAR by other associations, and NAR may undertake efforts to identify and correct any noncompliance. Associations may also bring complaints against other associations alleging failure or refusal to comply with an NAR-mandated policy. Such complaints must be filed in writing, must include specific detail describing the alleged area of noncompliance, and must include certification that the complaint is being filed at the direction of the association’s board of directors.
  • Associations that have differences with other associations that do not involve an alleged violation of NAR policy must attempt to resolve their differences with one another through mediation before filing a lawsuit.

Policy Violation Resolution Procedure

The following procedure will be followed when an association brings a complaint that another state or local association has failed or refused to comply with or has otherwise violated any NAR-mandated policy, other than the Organizational Standards for Local Boards and Associations, including without limitation the duty imposed by  Article I, Section 2 of the Bylaws to “avoid false, deceptive, or misleading advertising and marketing practices and shall not knowingly or recklessly make false or misleading statements about other Member Boards,  or Member Boards’ programs, products or services.” This procedure, beginning with paragraph 3 below, will also be followed where NAR has identified noncompliance by an association but has been unable to resolve the matter and achieve compliance.

  1. Complaints or allegations that a state or local association has failed or refused to comply with or has otherwise violated any NAR-mandated policy (“violation”) shall be directed, in the first instance, to the NAR Vice President of Board Policy and Programs. If the complaint involves failure to pay dues or any other dues policy violation, the complaint shall be directed to the NAR Finance Committee and will be subject to the NAR Dues Collection Policy
  2. The Vice President of Board Policy and Programs will review the complaint and consult with the NAR General Counsel and NAR Chief Executive Officer. If they determine that no violation appears to have occurred, they will inform the alleged violator and complainant in writing within 30 days of receiving the complaint. The associations involved will also be directed to a listing of available mediators that they may choose to contact to help them resolve their differences. The associations will be reminded that they must attempt to resolve their differences with one another through mediation before filing a lawsuit. The appropriate state association(s) will also be informed at this time of the complaint and of NAR’s determination that a violation did not occur. 
  3. If, in the opinion of the Vice President of Board Policy and Programs, the General Counsel, and the Chief Executive Officer, there appears reason to believe that a violation has occurred or is occurring, those staff will exercise reasonable efforts to cause the association to stop or correct the violation. If it becomes clear to such staff that any continuing efforts are unlikely to succeed in convincing the association to stop or correct the violation, that conclusion, together with the relevant supporting documentation, will be provided to the NAR President.
  4. The NAR President, through NAR AE and Leadership Development Department staff, shall invite the alleged violator association to meet with a panel of 3-5 members of the NAR Executive Committee appointed by the President, to review the facts underlying the alleged violation and any reason(s) offered by the association that it has not committed a violation. The panel shall meet at the next NAR meeting where the Executive Committee is scheduled to meet (during the May Midyear Meetings in DC, or the November REALTORS® Conference and Expo). The alleged violator association and the complainant association, and the appropriate state association(s), will be informed of the scheduled hearing and will be apprised of all subsequent proceedings and decisions.
  5. If the Executive Committee panel concludes that it is likely that a violation has occurred or is occurring, the panel will specify required remedial action and the association will be given a specified time period in which to complete remedial action. 
  6. If, after expiration of the specified time for compliance, the association continues to refuse to remedy the violation, a “show cause” hearing will be scheduled and conducted before a panel of at least 7 and not more than 9 members of the Executive Committee (none of whom may have served on the initial panel) appointed by the President. The state association will be notified of the hearing, be provided with all copies of all relevant documentation, and permitted, at its discretion, to offer its input, including its recommendation for consideration by the hearing panel. All members of the violating association will be notified within 60 to 90 days prior to the show cause hearing that if the association is found to be in violation of an NAR-mandated policy, the association risks losing its charter. The show cause hearing shall take place at the next NAR meeting where the Executive Committee is scheduled to meet, prior to the full Executive Committee meeting (during the May Midyear Meetings in DC, or the November REALTORS® Conference and Expo).
  7. If the show cause hearing panel concludes that the association has committed and/or is committing a violation, the panel will recommend a sanction to be imposed on the association, within the scope of the sanctions provided herein. That recommendation will be reported to the full Executive Committee for action. The Executive Committee, acting on behalf of the Board of Directors, will impose a sanction, which may be that recommended by the panel or may be modified as determined by the Executive Committee. Final results of the Executive Committee’s decision will be communicated to the complainant association and the association committing the violation.

Discipline/Sanctions

  • Letter of reprimand sent to the violating association staff and volunteer leaders
  • Association name and association’s staff and volunteer leadership names, along with the nature of the violation or the NAR policy violated, to be published in REALTOR® Magazine, REALTOR® AE Magazine, on REALTOR.org, and in the Board of Directors minutes
  • Fines issued in the amount recommended by the show cause hearing panel and approved by the Executive Committee; fines shall be assessed in an amount sufficient to deter subsequent violations, taking into account the size of the association, but may in no event be more than $100,000
  • Probation with remedial steps that may include education or information designed to better inform the association about the policy violated and how to avoid subsequent violations
  • Loss of association’s charter; association’s territory reverts to unassigned territory

Cs/Dispute Resolution/ Policy Violation Resolution Procedure 4-9-10