Part 8: Board Bylaw Provisions Authorizing a Commercial Information Exchange as a Wholly Owned Subsidiary Corporation of the Board

(Adopted 11/88)

Article ________________

Subsidiary Commercial Information Exchange

Section 1—Authority: The Board of REALTORS® shall maintain for the use of its members a Commercial Information Exchange (CIE) which shall be a lawful corporation of the state of ________________, all the stock of which shall be owned by this Board of REALTORS®. M

Section 2—Purpose: The CIE serves as an information exchange. Participants who have been retained by sellers of commercial or industrial property to market those properties may submit information on those properties to the CIE and Participants who have been retained by buyers of commercial or industrial property may submit information on the type(s) of property sought to the CIE. Any compensation agreements related to property included in the Exchange compilation must be made on an individual basis outside the CIE between the Participants involved.

A Commercial Information Exchange is not a Multiple Listing Service. No offers of cooperation and compensation are communicated by filing information on a property with the CIE. (Amended 4/92) M

Section 3—Governing Documents: The Board of Directors shall cause any Commercial Information Exchange established by it pursuant to this Article to conform its corporate charter, constitution, bylaws, rules, regulations, policies, practices, and procedures at all times to the Constitution, Bylaws, rules, regulations, and policies of the NATIONAL ASSOCIATION OF REALTORS®. M

Section 4—Participation: Any REALTOR® of this or any other Board who is a principal, partner, corporate officer, or branch office manager acting on behalf of a principal, without further qualification, except as stipulated otherwise in these bylaws, shall be eligible to participate in the Commercial Information Exchange upon agreeing in writing to conform to the rules and regulations thereof and to pay the costs incidental thereto.1 However, under no circumstances

is any individual or firm, regardless of membership status, entitled to “membership” or “participation” unless they hold a current, valid real estate broker’s license and offer or accept compensation to and from other Participants or are licensed or certified by an appropriate state regulatory agency to engage in the appraisal of real property.2 Use of information developed by or published by a Commercial Information Exchange is strictly limited to the activities authorized under a Participant’s licensure(s) or certification and unauthorized uses are prohibited. Further, none of the foregoing is intended to convey “participation” or “membership” or any right of access to information developed by or published by a CIE where access to such information is prohibited by law. (Amended 11/08) M

Mere possession of a broker’s license is not sufficient to qualify for CIE participation. Rather, the requirement that an individual or firm offers or accepts cooperation and compensation means that the participant actively endeavors during the operation of its real estate business to list real property of the type listed on the CIE and/or to accept offers of cooperation and compensation made by listing brokers or agents in the CIE. “Actively” means on a continual and ongoing basis during the operation of the participant’s real estate business. The “actively” requirement is not intended to preclude CIE participation by a participant or potential participant that operates a real estate business on a part-time, seasonal, or similarly time-limited basis or that has its business interrupted by periods of relative inactivity occasioned by market conditions. Similarly, the requirement is not intended to deny CIE participation to a participant or potential participant who has not achieved a minimum number of transactions despite good faith efforts. Nor is it intended to permit an CIE to deny participation based on the level of service provided by the participant or potential participant as long as the level of service satisfies state law. (Adopted 11/08)

The key is that the participant or potential participant actively endeavors to make or accept offers of cooperation and compensation with respect to properties of the type that are listed on the CIE in which participation is sought. This requirement does not permit an CIE to deny participation to a participant or potential participant that operates a “Virtual Office Website”

(VOW) (including a VOW that the participant uses to refer customers to other participants) if the participant or potential participant actively endeavors to make or accept offers of cooperation and compensation. A CIE may evaluate whether a participant or potential participant actively endeavors during the operation of its real estate business to offer or accept cooperation and compensation only if the CIE has a reasonable basis to believe that the participant or potential participant is in fact not doing so. The membership requirement shall be applied in a nondiscriminatory manner to all participants and potential participants. (Adopted 11/08)

Optional Provision for Establishing Nonmember Participatory Rights (“Open Exchange”) 3

A nonmember applicant for CIE participation who is a principal, partner, corporate officer, or branch office manager acting on behalf of a principal, shall supply evidence satisfactory to the Membership Committee that he has no record of recent or pending bankruptcy; has no record of official sanctions involving unprofessional conduct; agrees to complete a course of instruction (if any) covering the CIE rules and regulations and computer training related to CIE-generated information entry and retrieval, and shall pass such reasonable and non-discriminatory written examination thereon as may be required by the CIE; and shall agree that if elected as a Participant, he will abide by such rules and regulations and pay the CIE fees and dues, including the nonmember differential (if any), as from time to time established. Under no circumstances is any individual or firm entitled to CIE participation or membership unless they hold a current, valid real estate broker’s license and offer or accept compensation to and from other Participants, or are licensed or certified by an appropriate state regulatory agency to engage in the appraisal of real property. Use of information developed by or published by a Board CIE is strictly limited to the activities authorized under a Participant’s licensure(s) or certification and unauthorized uses are prohibited. Further, none of the foregoing is intended to convey participation or membership or any right of access to information developed by or published by a Board CIE where access to such information is prohibited by law. (Amended 11/08)

Mere possession of a broker’s license is not sufficient to qualify for CIE participation. Rather, the requirement that an individual or firm offers or accepts cooperation and compensation means that the participant actively endeavors during the operation of its real estate business to list real property of the type listed on the CIE and/or to accept offers of cooperation and compensation made by listing brokers or agents in the CIE. “Actively” means on a continual and ongoing basis during the operation of the participant’s real estate business. The “actively” requirement is not intended to preclude CIE participation by a participant or potential participant that operates a real estate business on a part-time, seasonal, or similarly time-limited basis or that has its business interrupted by periods of relative inactivity occasioned by market conditions. Similarly, the requirement is not intended to deny CIE participation to a participant or potential participant who has not achieved a minimum number of transactions despite good faith efforts. Nor is it intended to permit an CIE to deny participation based on the level of service provided by the participant or potential participant as long as the level of service satisfies state law. (Adopted 11/08)

The key is that the participant or potential participant actively endeavors to make or accept offers of cooperation and compensation with respect to properties of the type that are listed on the CIE in which participation is sought. This requirement does not permit an CIE to deny participation to a participant or potential participant that operates a “Virtual Office Website”

(VOW) (including a VOW that the participant uses to refer customers to other participants) if the participant or potential participant actively endeavors to make or accept offers of cooperation and compensation. An CIE may evaluate whether a participant or potential participant actively endeavors during the operation of its real estate business to offer or accept cooperation and compensation only if the CIE has a reasonable basis to believe that the participant or potential participant is in fact not doing so. The membership requirement shall be applied in a nondiscriminatory manner to all participants and potential participants. (Adopted 11/08)

Note 1: The requirements of (1) no record of recent or pending bankruptcy; (2) no record of official sanctions involving unprofessional conduct; and (3) completion of a course of instruction on the CIE rules and regulations and computer training related to CIE information entry and retrieval may be deleted from this Section at the option of each Board/Association. In states where law requires non-Board members be admitted to the CIE of a Board of REALTORS®, any limitations or restrictions imposed on participation or membership shall be no more stringent than permissible under the National Association’s Membership Qualification Criteria. However, in states where non-Board member access to the CIE is not a requirement of state law, Boards may, at their discretion, establish additional qualifications for non-Board member participation and membership in the CIE. (Amended 11/96)

Note 2: A Board may also choose to have the Membership Committee consider the following in determining a nonmember applicant’s qualifications for CIE participation or membership:

  • all final findings of Code of Ethics violations and violations of other membership duties in any other Association within the past three (3) years
  • pending ethics complaints (or hearings)
  • unsatisfied discipline pending
  • pending arbitration requests (or hearings)
  • unpaid arbitration awards or unpaid financial obligations to this or any other Association or Association CIE M

Section 5—Subscribers: Subscribers (or users) of the CIE include non-principal brokers, sales associates, and licensed and certified appraisers affiliated with Participants. (Optional provision: Subscribers also include affiliated unlicensed administrative and clerical staff, personal assistants, and individuals seeking licensure or certification as real estate appraisers who are under the direct supervision of an CIE Participant or the Participant’s licensed designee.) (Adopted 4/92) M

Section 6—Removal of Officers and Directors: In the event that an Officer or Director of the Commercial Information Exchange is deemed to be incapable of fulfilling the duties for which elected, but will not resign from office voluntarily, the Officer or Director may be removed from office under the following procedure:

  1. A petition requiring the removal of an Officer or Director and signed by not less than one-third of the Participants or a majority of all Directors of the CIE shall be filed with the President of the CIE, or if the President is the subject of the petition, with the next-ranking officer, and shall specifically set forth the reasons the individual is deemed to be disqualified from further service.
  2. Upon receipt of the petition, and not less than twenty (20) days or more than forty-five (45) days thereafter, a special meeting of the Participants of the CIE shall be held, and the sole business of the meeting shall be to consider the charge against the Officer or Director, and to render a decision on such petition.
  3. The special meeting shall be noticed to all Participants at least ten (10) days prior to the meeting, and shall be conducted by the President of the CIE unless the President’s continued service in office is being considered at the meeting. In such case, the next-ranking officer will conduct the meeting or the hearing by the Participants. Provided a quorum is present, a three-fourths vote of Participants present and voting shall be required for removal from office.
  4. Any vote taken by the Participants to remove an Officer or Director must ultimately be confirmed by a majority vote of the Directors of the shareholder(s). Notwithstanding the foregoing, the shareholder(s) may remove an Officer or Director by a majority vote of the Directors of the shareholder(s). (Adopted 11/96) R

1Optional qualifications which may be adopted at the local Board’s discretion: Any applicant for CIE participation and any licensee (including licensed or certified appraisers) affiliated with a CIE Participant who has access to and use of the CIE-generated information shall complete an orientation program of no more than twelve (12) classroom hours devoted to the CIE rules and regulations and computer training related to CIE information entry and retrieval. (Amended 11/96)

Boards are not required to establish prerequisites for CIE participation beyond holding REALTOR (principal) membership in a Board. However, if the Board wishes to establish prerequisites for CIE participation or access to CIE-generated information, the requirement of attendance at an orientation program is the most rigorous prerequisite that may be required. (Amended 2/94)

2Generally, Boards of REALTORS®, when there is more than one principal in a real estate firm, define the chief principal officer of the firm as the CIE “Participant.” Brokers or salespersons other than principals are not considered “Participants” in the Exchange, but have access to and use of the CIE-generated information through the principal(s) with whom they are affiliated.

3 Only adopt this provision is the board’s CIE is open to nonmember participants (otherwise qualified individuals who do not hold REALTOR® membership anywhere).

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