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Contested Application Procedures for New Board Formation and/or Release of Jurisdication

May 30, 2012

The following procedures are used by the Membership Policy and Board Jurisdiction Committee to process applications for new board status or applications for change of jurisdiction when the requested territory is presently assigned to another board and the board is unwilling to voluntarily release the territory.

The size of a member board of REALTORS®, geographic considerations, or changing market conditions within the jurisdiction of an existing board may:

  • lead certain individuals to desire the formation of a new member board partially within the currently assigned jurisdiction of an existing board
  • lead an existing board to desire a change of jurisdiction affecting another existing board

Taking the First Step . . .

The subject of forming a new board or seeking any territorial jurisdiction currently assigned to an existing board should be thoroughly discussed and considered by or with the existing board's officers, directors, and members.

To make such considerations and the ultimate decision a matter of record, an applicant group or a board interested in acquiring territorial jurisdiction currently assigned to another board must direct the request, in writing, to the board of directors of the affected member board and ask that the board consider the request and respond in writing with a decision.

When such a request is made to a member board for voluntary release of some of its currently assigned territory, the affected board has sixty (60) days to respond. If a written response is not made within 60 days as described, it shall be deemed a negative response and the petitioning group or board of REALTORS® may invoke the 'Procedure for Processing Contested Application for Creation of a New board of REALTORS® or Change of Jurisdiction of an existing board of REALTORS®.

A copy of the letter requesting voluntary release of territorial jurisdiction to form a new board or for reassignment to another board, and a copy of the affected board's response (if any) must be furnished simultaneously to the state association and the NATIONAL ASSOCIATION OF REALTORS®.

Request for Release of Territory to Proposed Board

When a request to an existing board is made for the release of territorial jurisdiction for the formation of a new board, or for reassignment to another board, and the existing board agrees to voluntarily relinquish a portion of its currently assigned territorial jurisdiction, the applicant group or board seeking such reassignment may then proceed with its application.

Refusal of Request by Existing Board

If the existing board responds in the negative, refusing the request and refusing to relinquish any of its territory, or if it does not reply in writing within sixty days from receipt of the request, then the applicant group may proceed only by invoking the contested application procedure explained below. Further, any application/petition and supporting documentation invoking the dispute procedure will not be accepted until after the affected board has responded negatively to the request for release of a portion of the board's territory or has failed to reply within sixty days from date of receipt of the written request.

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Procedure for Processing a Contested Application for the Creation of a New Board of REALTORS® or for Change of Jurisdiction Affecting Jurisdiction of an Existing Board of REALTORS®

Part A - Creation of a New Board of REALTORS®

  • An application/petition submitted by an applicant group seeking recognition by the NATIONAL ASSOCIATION OF REALTORS® as a board of REALTORS®, and requesting reassignment of territorial jurisdiction presently assigned to an existing member board(s) of the National Association shall be accepted and considered only if the applicant group has first petitioned the affected member board for the board's permission and concurrence to seek separate member board status and assignment of a part of the board's existing territorial jurisdiction, and the affected member board has replied in the negative within sixty days of the date of such petition, or has failed to reply within sixty days of the date of such petition.

Part B - Change of Jurisdiction Affecting Jurisdiction of an Existing Board of REALTORS®

  • An application/petition submitted by an existing member board of REALTORS® seeking reassignment of territorial jurisdiction presently assigned to another member board of REALTORS® shall be accepted and considered only when an applicant member board has made earlier petition to the affected member board for voluntary release of the requested territory with such petition having been denied in writing by the affected member board within sixty days from date of the request from the petitioning member board or no reply has been made by the affected member board within the said sixty days.
  • Under this procedure, any request for a change of jurisdiction must be initiated by the member board requesting the reassignment of territory.
  • Such a contested application, in either case as described above, will not be received or considered if, within a period of four years prior to the date of such application, the National Association had denied an application involving substantially the same territorial jurisdiction after processing such application under this procedure, providing, however, that the National Association may, at any time on its own motion, initiate a proceeding to implement its policies governing the assignment and reassignment of board jurisdiction.


Note: The following procedures are applicable to Parts A and B above.

Petition

  • Any petition for the establishment of a board of REALTORS® or for a change of jurisdiction affecting the jurisdiction of an existing member board of REALTORS® is required to include a written statement setting forth, with reasonable detail, the ultimate facts said petitioners allege to be the basis upon which the petition shall be granted, together with all documents, affidavits, exhibits, and evidence upon which said petitioners intend to rely.
  • The petition and all of the supporting documents shall be furnished simultaneously by the petitioner to the National Association and to the affected board.
  • Service of said petition and documents shall be made by registered or certified mail, return receipt requested.
  • Petition must be filed within one year after the affected board has responded negatively to the request for voluntary release of a portion of its present jurisdiction or has failed to reply within sixty days from date of receipt of the written request.

Response

  • Within sixty days after service of said petition, the affected board may answer said petition. Said answer shall contain denials of those allegations of the petition the board wishes to contest, together with any affirmative allegations of fact the board wishes to be considered in connection with the petition.
  • All documents, affidavits, exhibits, or other evidence upon which the board in any way intends to rely must be annexed to and made part of said answer.
  • The answer and all supporting documents shall be furnished simultaneously by the respondent to the National Association and the petitioner.
  • Service of said response shall be by registered or certified mail, return receipt requested.

Reply to the Response

  • Within fifteen days after completion of service of the board's response, the petitioner may submit a reply to the information contained in the response, together with any additional documents, affidavits, exhibits, or other evidence the petitioner deems necessary to reply to the statements contained in the affected board's response.
  • Such information must be furnished simultaneously to the National Association and the affected board.
  • Service of said reply is by registered or certified mail, return receipt requested.

Guidelines Regarding Submission of Written Materials

  • The petition, response, and reply to the response should contain only that information relevant to the National Association's consideration of the dispute.
  • The written materials should speak to the criteria established in this procedure, as this is the criteria utilized by the National Association in evaluating jurisdictional disputes.
  • Parties to the dispute should make every effort to avoid submitting information that is extraneous or irrelevant.

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Hearings Before the Membership Policy and Board Jurisdiction Committee

  • The duration, nature, scope, and conduct of any hearing is within the sole discretion of the committee.
  • Hearings generally are held in conjunction with the regularly scheduled business meetings of the National Association. At least thirty days' notice, advising of the date, time, location and procedures for the hearing, is provided by registered or certified mail.
  • The parties will be requested to provide the National Association with a large map, in contrasting colors, showing the requested jurisdiction and the jurisdiction of all boards adjoining the requested jurisdiction. This map is displayed at the hearing.
  • No new evidence in the form or documents, affidavits, or otherwise shall be considered by the Membership Policy and Board Jurisdiction Committee, unless at least twenty (20) days prior to the hearing, the party submitting such evidence serves written notice by registered or certified mail to the chair of the hearing panel. Such notice shall contain copies of all documents, affidavits, exhibits, or other evidence to be newly offered and a factual showing, satisfactory to the chair of the hearing panel, that such evidence could not be submitted or was not available to the party by the exercise of due diligence at the time of the party's earlier petition, answer, or reply, as the case may be. The burden of proving the propriety of the new evidence shall be upon the party attempting to introduce the same. In the event a party is permitted to present new evidence, the opposing party shall have a reasonable opportunity for rebuttal.
  • All parties have the right to be represented by counsel.
  • All filings or other documents required under this procedure which are not filed within the time limits prescribed herein may be accepted at the discretion of the chair of the hearing panel.

The Hearing Panel's Decision

The decision of the hearing panel regarding reassignment of territory from one existing association to another existing association is final, except that the Board of Directors may require a new hearing before a different panel of the committee if it determines the procedures failed to provide due process. See the process for parties to request a procedural review.

The decision of the hearing panel regarding a new board application must be submitted to the Board of Directors where the final decision is made.

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Criteria for Evaluating a Contested Application for Charter Status As a Member Board or for Change of Jurisdiction Affecting Jurisdiction of an Existing Board


(As applicable, these criteria also are to be used when evaluating any jurisdictional dispute among existing member boards of REALTORS®.)

The burden of proof is upon a petitioning applicant group or upon a board to establish its right to some portion of the jurisdiction presently assigned to an existing board. Therefore, the criteria should be a list of items by which to measure the performance of the affected board and by which to measure the abilities of the applicant group or board to fulfill the obligations of its application.

Included in each of the following sections is a list of questions that are typical, but not all-inclusive of what a hearing panel considers during deliberations.

Ability to serve the public

  • What is the board's level of participation in civic and real estate projects throughout its jurisdiction?
  • How does the board represent real estate interests throughout its jurisdiction?
  • To what extent does the board provide comprehensive services to the public?

Ability to serve members

  • What is the board's geographic size (in miles)?
  • What is the geographic size (in miles) of the requested territory?
  • What is the membership size of the board (REALTORS® and REALTOR-ASSOCIATE®s)?
  • How many nonmember licensees (brokers, salespersons and non-principal licensed or certified appraisers) are affiliated with the designated REALTOR® members of the board?
  • Does the board have an executive officer?
  • Does the board conduct regularly scheduled membership meetings?
  • Does the board have an indoctrination program?
  • Does the board maintain a board-owned multiple listing service or participate in a regional multiple listing service?
  • Does the board conduct educational programs?
  • Does the board have a communication process in place (e.g., monthly newsletter, magazine, etc.)?
  • What are other services the board offers to its members?

Ability to enforce the Code of Ethics

  • Does the board have a properly constituted grievance committee and professional standards committee or does the board participate in an interboard or regional professional standards agreement? Does the board carefully adhere to the procedures set forth in the board's Code of Ethics and Arbitration Manual?
  • Does the board provide education and training on the subject of the Code of Ethics?
  • What is the typical processing time for ethics complaints and requests for arbitration?

Ability to safeguard the term REALTOR®

  • Does the board disseminate guidelines for proper use of the term?
  • What is the nature and extent of the program that identifies instances of improper use of the term?
  • What action is taken to prevent misuse of the term?

Compliance with NATIONAL ASSOCIATION OF REALTORS® policy

  • Does the board adhere to NAR policy?
  • Does the board periodically submit its governing documents to the National Association for review?

Response to changing market area

  • Is the board fragmented into different market areas? Please describe these areas.
  • Are there natural boundaries separating two boards or separating the contested area from either board (e.g., rivers, lakes, mountain range, etc.)?
  • Is the contested area viewed as being more closely aligned with one board than the other because of boundaries such as political districts, school districts, area codes, etc.?
  • What type of real estate comprises the contested area?
  • Does this differ from the basic make up of the remaining board territory?


In addition to the criteria established above, the committee also considers the following criteria, to the extent they are applicable.

  • Do a majority of the REALTORS® (principals) in the requested area support the petition of the applicant group or board?
  • Do a majority of the REALTORS® and REALTOR-ASSOCIATE®s (other than principals) in the requested area support the petition of the applicant group or board?
  • Do the petitioners have sufficient members and financial resources to conduct the activities and programs required of a member board of the NATIONAL ASSOCIATION OF REALTORS®?
  • What effect will the release of the contested territory have on the existing board?

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