2015 Summary of Key Professional Standards Changes

This summary highlights substantive issues and changes, but is not all-inclusive. For complete information detailing all changes see the Current Meeting Agendas/Minutes page (search on "Professional Standards Committee").

Also review the shaded portions of the 2015 Code of Ethics and Arbitration Manual which highlights all changes. You may also view previous years' summaries of changes.


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Changes to the Code of Ethics and Arbitration Manual

(underscoring indicates additions, strikeouts indicate deletions)

• Policy Statement #33, Use of Panels in Place of Committees and the Board of Directors, was amended as follows:

33. Use of panels in place of Committees and the Board of Directors

Any matter brought before the Grievance Committee, Professional Standards Committee, or Board of Directors may be considered by a panel of members or Directors appointed by the President for that purpose (or, alternatively, by the Board’s Executive Committee).  Three (3) or more members shall constitute a panel of the Grievance and Professional Standards Committees that can act on behalf of those committees.  Five (5) Directors or a quorum of the Board of Directors, whichever is less, shall constitute such a panel of the Board of Directors, which shall that can act on behalf of the Board of Directors.  The decision of the panel (or Executive Committee) shall be final and binding and shall not be subject to further review by the full Committee or the full Board of Directors except as otherwise provided in this Manual.

In appointing such a panel, the President should consider the following recommended criteria:

• number of years as a REALTOR®
• number of years in the real estate business
• primary and secondary fields of real estate endeavor/ expertise
• participation in post-licensing real estate education
• training in the Code of Ethics
• position in firm (principal, nonprincipal)
• size of firm
• common sense
• open-mindedness
• familiarity with state(s) laws and regulations
• receptiveness to instruction/training
• other relevant professional or procedural training

Panel members should be mature, experienced, knowledgeable persons of judicial temperament.

When possible, panels should be strongly encouraged to use conference calls or alternative communication technologies for meetings other than hearings and appeals to expedite the decision-making process.  Use of conference calls or alternative communication technologies during the course of a hearing shall be governed by Professional Standards Policy Statement 56, “Remote” Testimony. (Revised 11/14)

• Policy Statement #49, Professional Standards Administration Training, was amended as follows:

Enforcement of the Code of Ethics is a privilege and responsibility of each Board and Association as established in Article IV of the Bylaws of the NATIONAL ASSOCIATION OF REALTORS®.  Effective January 1, 2002 eEvery Board and Association must designate a person or entity responsible for administration of professional standards processes.  Persons primarily responsible for administration of professional standards processes must have successfully completed training every four years on professional standards administration meeting the learning objectives and minimum criteria established by the NATIONAL ASSOCIATION OF REALTORS® from time to time. (Adopted 11/99)

Note:  The National Association will offer training meeting the learning objectives and minimum criteria at the Association Executive Institute (Friday, March 13) and the Annual Convention (likely Wednesday, November 11 but that date has yet to be confirmed). 

• Policy Statement #56, “Remote” Testimony, was amended as follows:

The policies and procedures established in the National Association’s Code of Ethics and Arbitration Manual contemplate that except in extreme circumstances parties and their witnesses will participate in ethics and arbitration hearings in the physical presence of Hearing Panels and the respective parties.  Parties and their witnesses may request permission to participate in such proceedings via teleconference or videoconference. (Revised 11/14)

“Extreme circumstances” in which pParties and witnesses to ethics and arbitration hearings may be permitted to participate in those hearings by teleconference or videoconference at the discretion of the Hearing Panel chair are defined as circumstances where (1) postponement or rescheduling of the hearing to permit their participation is not feasible and (2) failure to accept such testimony or permit such participation would deny a party a fair hearingOnly those parties eligible to attend the entire hearing in person would be entitled to participate “remotely” for the entirety of the hearing. Witnesses may only participate remotely for their own testimony. (Revised 11/14) 

Hearing panels, association staff, or association counsel should employ steps to verify the identity of “remote” participants, to preclude unauthorized individuals from being in the presence of the “remote” participant, and to employ appropriate safeguards to ensure confidentiality of the proceedings. (Adopted 11/04)

The costs of “remote” testimony shall be the responsibility of the party requesting the opportunity to participate or offer testimony by teleconference or videoconference.
(Adopted 11/04) 

Counsel is permitted to participate in ethics or arbitration hearings only in the physical presence of Hearing Panels. (Adopted 11/04)

• New Policy Statement  #59, Associations to Provide Ombudsman Services, was adopted as follows:

Every local and state association of REALTORS® is required to offer, either directly or as part of a cooperative enforcement agreement (consistent with Professional Standards Statement #40, Cooperative Enforcement Agreements), ombudsman services to members, clients, and consumers on or before January 1, 2016. (Adopted 11/14)

• New Policy Statement #60, “Alternate” Hearing Panelists, was adopted as follows:

Associations may, but are not required to, convene hearing panels that include one or more alternate members.  If alternates are present at hearings, they should be seated apart from the hearing panel, may not participate in any way unless called on to replace a panel member, and are bound by the same duties that are applicable to panel members. 

If alternate panel members are not called on to replace a panel member and if the association’s policy allows them to be present at post-hearing executive session deliberations, alternates may not be involved in deliberating or deciding the matter before the hearing panel. (Adopted 11/14)

• Section 1 (r), Definitions Relating to Ethics, was amended as follows:

“Probation” means that a another form of discipline recommended by the Hearing Panel will be held in abeyance for a stipulated period of time which may not 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 findings of a violation during the probationary period, both the probationary status and the suspended discipline shall be considered fulfilled, and the record shall reflect the fulfillment.  The fact that one or more forms of discipline will be held in abeyance during the probationary period does not bar the imposition of other forms of discipline which will not be held in abeyance. (Revised 11/14)

Note:  There is also a new question and answer included in the Manual that explains that if a hearing panel wants a respondent to comply immediately with discipline, the hearing panel should not place the respondent on probation.  Probation should be used only if a hearing panel wants to hold a form of discipline (e.g., a fine) in abeyance during the probationary period.

The Disciplinary Guidelines were also amended to delete the reference to probation being used as a type of discipline and reflect the revised definition.

Sections 5 and 30, Witnesses, were amended as follows:

That Sections 5 and 30, Witnesses, Code of Ethics and Arbitration Manual, be amended as follows (underscoring indicates additions):

Every party may have witnesses present at the hearing, and the tribunal may summon its own witnesses. All witnesses, except those who are also parties, will be excused from the hearing after completion of their testimony and cross-examination unless otherwise provided for in the Code of Ethics and Arbitration Manual. (Revised 11/14)

All parties appearing at the hearing may be called as witnesses without advance notice. Any party who intends to call additional witnesses at the hearing must provide the Board and all other parties with the names of these witnesses at least fifteen (15) days prior to the hearing. Failure to provide this information within the time specified will constitute a waiver of the right to call those witnesses at the hearing, unless the other party agrees to allow their testimony. (Revised 11/14)

In any case where all of the names of witnesses a party intends to call at the hearing have not been provided within the time specified, if the Hearing Panel believes that the testimony of that witness(es) is essential to ensure due process, his testimony may be permitted provided the other party has the right to request that the hearing be recessed and continued to a date certain not less than five (5) days later. (Revised 11/88)

Questions as to whether a member who has been called as a witness but who refuses to appear, or asserts that his appearance will result in an unreasonable hardship, shall be determined by the Hearing Panel Chair as soon as practical. Refusal to appear, after the Chair has determined that the member’s appearance is required, may result, at the Chair’s discretion, in charges that Article 14 has been violated being filed against the member. (Adopted 11/93)

• Section 6, Conduct of Hearing; Section 7, Notices; Section 13, Power to Take Disciplinary Action; Section 22, Decision of Hearing Panel; Section 23, Action of the Board of Directors; Section 32, Notices; Appendix V to Part Four, Ethics Hearing Checklist with Administrative Time Frames; Appendix X to Part Four, Before You File an Ethics Complaint; and Part Five, Conduct of an Ethics Hearing, Chairperson’s Procedural Guide were amended to delete the reference to rehearings.

• Sections 7 and 32, Notices, were amended as follows:

(a) Any notice required to be given or paper required to be served or filed may be personally handed to the party to be notified, sent by registered or certified first class mail addressed to the party’s last known mailing address, or sent to the party by email.  When possible, email is the preferred form of service for notices and documents pursuant the procedures specified in this Manual.  Any notice required to be given or paper required to be served or filed shall be deemed given, served, or filed when handed to the party, mailed to the party, or sent to the party by email, unless otherwise specified in this Manual.  Notices sent by email shall include the association’s request that delivery be acknowledged by the intended recipient within twenty-four (24) hours by return email.  If receipt of the notice has not been acknowledged by the intended recipient within twenty-four (24) hours, the recipient will be contacted by telephone to confirm receipt and the recipient’s confirmation will be noted in the file.  If receipt of notices sent by email cannot be confirmed, the notices will be resent via registered or certified first class mail. (Revised 11/14)

(b) Notice of hearing shall include the names of the members of the tribunal and be given not less than twenty-one (21) days beforehand.  Twenty-one (21) days’ notice is not required for postponed hearings (scheduled but extension granted before hearing commences) or for hearings that have commenced and been adjourned (recessed).  Notice of rehearings shall be given not less than twenty-one (21) days before the rehearing. (Revised 11/14)

Sections 12 and 37, Duties of Membership, were amended as follows:

The duties of membership include the following:

(a) to abide by the Code of Ethics of the NATIONAL ASSOCIATION OF REALTORS®
(b) to abide by the bylaws of this Board and its rules and regulations
(c) to submit to arbitration all disputes specified in Part Ten of this Manual by the procedure therein provided, and to abide by the arbitrators’ award* (Revised 11/96)

Subject to any preliminary consideration by any administrative body of the Board or its subsidiary MLS, any allegations or charges that a member has violated any membership duty shall be referred to the Professional Standards Committee for review in conformity with the procedures established in the Code of Ethics and Arbitration Manual of the National Association as from time to time amended. Notwithstanding the foregoing, multiple listing services operated as committees of associations of REALTORS® or as subsidiary corporations wholly-owned by associations of REALTORS® may establish procedures for enforcement of their rules and regulations pursuant to the grant of authority and to the limitations established in Multiple Listing Policy Statement 7.21, Appropriate Procedures for Rules Enforcement, Handbook on Multiple Listing Policy. (Revised 11/14)

• Section 14, Nature of Discipline, and other areas of the Manual, were amended as follows:

That Section 14, Nature of Discipline, Code of Ethics and Arbitration Manual, be amended as follows (underscoring indicates additions):

Disciplinary action may consist only of one or more of the following. Refer to Appendix VII to Part Four of this Manual for sanctioning guidelines.

(a) Letter of Warning with copy to be placed in member’s file;

(b) Letter of Reprimand with copy to be placed in member’s file;

(c) Requirement that member attend the ethics portion of the Board Indoctrination Course or other appropriate course or seminar specified by the Hearing Panel which the respondent could reasonably attend taking into consideration cost, location, and duration;
(d) Appropriate and reasonable fine not to exceed $15,000 (Revised 5/13);

(e) Member placed on probation for a stated period of time not less than thirty (30) days nor more than one (1) year;*

(e)(f) Membership of individual suspended for a stated period not less than thirty (30) days nor more than one (1) year with automatic reinstatement of membership in good standing at the end of the specified period of suspension.  The thirty (30) day minimum and one (1) year maximum do not apply where suspension is imposed for a remediable violation of a membership duty (e.g., failure to pay dues or fees or failure to complete educational requirements).  The Directors may order suspension unconditionally, or they may, at their discretion, give the disciplined member the option of paying to the Board, within such time as the Directors shall designate, an assessment in an amount fixed by the Directors, which may not exceed $15,000 and which can be utilized only once in any three (3) year period, in lieu of accepting suspension.  But, if the conduct for which suspension is ordered consists of failure to submit a dispute to arbitration, the Directors may not permit the disciplined member to avoid suspension without submitting to the arbitration in addition to paying the assessment, unless in the meanwhile the dispute has been submitted to a court of law without any objection by any party that it should be arbitrated; (Revised 11/13)

(f)(g) Expulsion of individual from membership with no reinstatement privilege for a specified period of one (1) to three (3) years, with reinstatement of membership to be by application only after the specified period of expulsion, on the merits of the application at the time received (decision should be written clearly articulating all intended consequences, including denial of MLS participatory or access privileges); (Revised 4/96)

(g)(h) Suspension or termination of MLS rights and privileges may also be utilized. Suspension of MLS services may be no less than thirty (30) days nor more than one (1) year; termination of MLS services shall be for a stated period of one (1) to three (3) years; (Revised 5/02)

(h)(i) REALTORS® who participate in MLS or otherwise access MLS information through any Board or Association in which they do not hold membership are subject to the Code of Ethics in that Board or Association on the same terms and conditions as Board members. Discipline that may be imposed may be the same as but shall not exceed the discipline that may be imposed on members. Boards (i) entering into regional or reciprocal MLS agreements are encouraged to include provisions requiring signatory Boards to respect, to the extent feasible, decisions rendered by other Boards involving suspension or expulsion from membership or from MLS. (Revised 4/96)

(i)(j) Members may also be required to cease or refrain from continued conduct deemed to be in violation of the Code, or to take affirmative steps to ensure compliance with the Code, within a time period to be determined by the hearing panel.  Where discipline is imposed pursuant to this subsection, the decision should also include additional discipline (e.g. suspension or termination of membership) that will be imposed for failure to comply by the date specified, and to continue to comply for a specified period not to exceed three years from the date of required compliance.

Probation means that another form of In addition to imposing discipline, the Hearing Panel can also recommend to the Board of Directors that the disciplined member be put on probation.  Probation is not a form of discipline.  When a member is put on probation the discipline recommended by the Hearing Panel will be is held in abeyance for a stipulated period of time which may not exceed longer than 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 findings of a violation during the probationary period, both the probationary status and the suspended discipline shall be are considered fulfilled, and the member’s record shall will reflect the fulfillment. The fact that one or more forms of discipline will be held in abeyance during the probationary period does not bar the imposition of other forms of discipline which will not be held in abeyance. (Revised 05/14)

In addition to any discipline imposed, Boards and Associations may, at their discretion, impose administrative processing fees not to exceed $500 against each respondent found in violation of the Code of Ethics or other membership duties.  Any administrative processing fee will be in addition to, and not part of, any disciplinary sanction imposed. Boards and Associations shall determine in advance when, and under what circumstances, administrative processing fees will be imposed so that imposition is a matter of administrative routine. (Revised 5/14)

• Section 15, Selection and Appointment of the Grievance Committee, was amended to provide that the Grievance Committee will review complaints not later than forty-five (45) days after receipt of the complaint.
 
Note:  The print version of the Code of Ethics and Arbitration Manual states that complaints be reviewed not less than forty-five (45) days after receipt of the complaint; that is incorrect.  Grievance Committees are to review complaints not later than forty-five (45) days after receipt.

• Sections 18 and 41, Function; Section 20 (a), Initiating an Ethics Hearing; and Section 47 (c), Manner of Invoking Arbitration, were amended as follows:

When Grievance Committees refer ethics complaints and arbitration requests for hearing, hearing panel chairs can determine if questions about

(1) whether ethics complaints and arbitration requests are timely filed,

(2) whether arbitrable issues exist,

(3) whether arbitration requests are too legally complex to be fairly arbitrated, and

(4) other administrative issues

will be addressed through a pre-hearing meeting of the hearing panel or at the outset of the hearing prior to testimony relating to the ethics complaint or arbitration request commencing.  If these matters rise during a hearing, the hearing panel will address them at that time. 

Dismissals of ethics complaints and arbitration requests by hearing panels can be appealed to the Board of Directors on the same bases as dismissals by the Grievance Committee. 

Any proceeding convened to resolve such issues must include all of the procedural due process safeguards required for ethics and arbitration hearings. Where such issues are considered at a pre-hearing meeting of the Hearing Panel, the chair will determine whether the parties may be present, and the extent to which their participation will be permitted. (Revised 05/14)

• Sections 18 (c) and 42 (c), Function, were amended to make it clear that any party may appeal the decision of the Grievance Committee within twenty (20) days from transmittal of the dismissal notice (as opposed to twenty (20) days from receipt of the dismissal notice).  There are numerous other areas of the Manual where similar changes are made.

• Section 20 (a) and (c), Initiating an Ethics Hearing, were amended as follows:

(a) In the event the complaint is from a client, customer, or a member of the general public, and the Grievance Committee determines that the complaint is vague, overly general, does not allege violations of specific Articles, or is otherwise insufficient on its face, a member of the Grievance Committee may be assigned by the Chairperson of the Grievance Committee to assist the complainant in preparing the complaint in proper form. The member providing such assistance shall not participate in any consideration or deliberations of the Grievance Committee with respect to the matter, and are not and will not act as the complainant’s advocate or representative. In such cases, the respondent shall receive the revised complaint with the original complaint and all other supporting documentation provided by the complainant incorporated as an appendix. (Revised 11/14)

(b)  Upon its own motion the Grievance Committee may, and upon instruction of the Directors must, review the actions of any member when there is reason to believe that the member's conduct may be subject to disciplinary action, and, if the evidence of unethical conduct warrants a hearing, shall prepare a complaint, refer it to the Secretary, and designate one of its members to present the case at the subsequent hearing on its behalf as complainant. However, no member of the Grievance Committee shall serve as a member of the Hearing Panel. (Revised 4/94)

(c)  Any action by the Grievance Committee dismissing the complaint as unworthy of further consideration may be appealed to the Board of Directors within twenty (20) days from receipt transmittal of the dismissal notice using Form #E-22, Appeal of Grievance Committee Dismissal of Ethics Complaint. The materials and information which were available to the Grievance Committee when the committee made its decision will be presented to the Directors and considered with the appeal. The complainant and respondent do not have the right to appear at the hearing before the Directors. The complaint and any attachments to the complaint may not be revised, modified, or supplemented. The complainant may, however, explain in writing why the complainant disagrees with the Grievance Committee’s conclusion that the complaint should be dismissed. If the Directors determine that the complaint was improperly dismissed by the Grievance Committee, they shall refer it to the Professional Standards Committee for a hearing. If referred for hearing, the Secretary shall at that time provide a copy of the response to the complainant if one had been submitted for review by the Grievance Committee. (Revised 11/14)

• Section 20 (j), Initiating and Ethics Hearing, was amended to increase the possible fine from $5,000 to $15,000.  This change should have appeared in the 2014 Code of Ethics and Arbitration Manual.

• Section 20 (l) through Section (o), Initiating an Ethics Hearing, was amended as follows: 

(l)  If the respondent does not acknowledge the conduct alleged in the complaint or waive the right to a hearing, or does not respond within twenty (20) ten (10) days from receipt transmittal of the complaint, a hearing shall be scheduled in the manner provided for in Section 21, Ethics Hearing, beginning with the twenty (20) day deadline for the Professional Standards Committee chair to select a hearing date. (Revised 11/14)

(m) If the respondent waives the right to a hearing and acknowledges the conduct alleged in the complaint, such elections will be affirmatively indicated on the response form which shall be returned to the Grievance Committee Chairperson (or staff or counsel) within twenty (20) ten (10) days from receipt transmittal of the complaint by to the respondent. The Grievance Committee Chairperson (or staff or counsel) will verify the respondent's assertions as to prior violations in the past three (3) years. In the absence of any prior violation within the past three (3) year period, the complaint will be referred to a panel of the Professional Standards Committee for consideration within thirty (30) days. The panel shall be appointed pursuant to the procedures established elsewhere in this Manual. (Revised 11/14)

(n) The panel of the Professional Standards Committee will meet in executive session. Neither the complainant nor the respondent will be present. Board staff and counsel will be present as deemed necessary by the Chairperson. The initial question to be determined by the panel will be whether the allegations in the complaint, as acknowledged and agreed to by the respondent, support a violation of one or more of the Articles of the Code of Ethics. The panel shall prepare a brief, concise decision which shall include findings of fact, conclusions, and a recommendation for discipline if a violation is found. Discipline that may be imposed, if a violation is determined, may only include one or more of the following: letter of warning or reprimand, mandatory attendance at a relevant educational program, probation, suspension for thirty (30) days, or a fine not in excess of $15,000. In addition to imposing discipline, the Hearing Panel can also recommend to the Board of Directors that the disciplined member be put on probation.  Probation is not a form of discipline. (Revised 11/14)

(o) The decision of the panel will be filed with the Secretary within ten (10) days after the panel's decision is final the day of the hearing, or no later than forty-eight (48) hours following the hearing*. The procedures for dissemination of the decision shall be those in Section 22(b), Decision of a Hearing Panel. Appeals of decisions shall be pursuant to Section 23, Action of the Board of Directors, of this Manual. (Revised 11/14)
 
* The Hearing Panel’s decision shall be considered final only when it is in writing and signed by members of the panel following their personal review and any review by legal counsel which may be required.

• Section 21, (a) through (c), Ethics Hearing, was amended as follows: 

(a) After a complaint alleging a violation of membership duty (duties) has been referred to the Secretary by the Grievance Committee with instruction to arrange a hearing, the Secretary shall serve a copy of the complaint on each party complained of (hereafter called the respondent) and notify the respondent that the respondent may file a written reply (Forms #E-2, Notice to Respondent [Ethics], and #E-3, Reply [Ethics], Part Six) with the Secretary within fifteen (15) days of the request for response being transmitted. A Hearing Panel may accept late filing of the reply at its discretion. The Secretary may require the complainant to supply the necessary number of copies of the complaint and the respondent to supply the necessary number of copies of the reply, except that such requirement shall not be made of a complainant who is not a Board Member. (Revised 11/14)

The Secretary will inform the Professional Standards Committee chair of the referral and the chair shall select a hearing date no later than twenty (20) days after the Grievance Committee’s decision to forward for hearing is final. (Adopted 11/14)

(b) After fifteen (15) days, tThe Secretary shall provide a copy of the reply (if any) to the complainant within fifteen (15) days from receipt of the response. The Secretary shall also provide copies of the complaint and reply (if any) to the Board President and Chairperson of the Professional Standards Committee, or notify each that no reply has been filed (unless the President and/or Professional Standards Chairperson indicate that they do not wish to receive copies or be so informed). (Amended 11/14)

(c) The Secretary shall, concurrently with the notification that the ethics complaint has been referred for hearing, mail transmit to each of the parties a list of the names of members of the Professional Standards Committee (See Part One, Section 2, (a) through (f), Qualification for Tribunal, Part Six, Form #E-6, Notice of Right to Challenge Tribunal Members, and Form #E-7, Challenge to Qualification by Parties to Panel Members). Within fifteen (15) days from the date the names are mailed to the parties, If a party challenges one or more members, the challenge form must be returned to the Secretary no later than ten (10) days after the date the challenge forms were transmitted to the party.  No later than five (5) days after the challenge forms are due, the Professional Standards Committee Chairperson shall appoint, from the names not successfully challenged by either party, three (3) or more members for a Hearing Panel, a majority of whom shall be REALTORS®. The Chairperson shall also select one of the panel members to serve as Chairperson of the Hearing Panel. Any Hearing Panel must have an odd number of members. If the complainant or respondent is a REALTOR-ASSOCIATE® or a REALTOR® other than a principal, at least one member of the Hearing Panel shall be a REALTOR-ASSOCIATE® or a REALTOR® other than a principal. It shall be a membership duty of anyone so appointed to serve on the Hearing Panel unless disqualified. A party will be deemed to have waived all objections to any person whose name is not challenged. If challenge to members of the Professional Standards Committee results in an insufficient number of members to constitute a panel, the President may appoint other qualified Board Members to serve as panel members. The Chairperson of the Professional Standards Committee (or the Hearing Panel itself) shall designate the time and place of the hearing, and the Secretary shall notify the complainant and the respondent minimally twenty-one (21) days before the hearing (Form #E-8, Official Notice of Hearing, Part Six).* An appearance at a hearing without objection by a party will constitute a waiver of any defective notice of hearing. 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 request for continuance would deny the requestor a fair hearing. (Revised 11/14)

*Form #E-9, Outline of Procedure for Ethics Hearing, Part Six, should accompany the Official Notice of Hearing or be otherwise provided to the parties prior to the hearing.

(d)  The Chairperson of the panel shall prescribe any procedure for the hearing not inconsistent with these provisions.**

**See Part Five, Conduct of an Ethics Hearing.

(e)  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)

The complaint, and response, if any, shall be provided to Hearing Panel members prior to the hearing. Such time period shall be ____________ (as determined by the Board of Directors) and shall be adhered to for all hearings. (Amended 4/91)

(f)  Amendment of complaint:

(1) At any time prior to the hearing of the complaint, the complainant may file an amended complaint with the Secretary (excluding amendments pertaining to an Article previously dismissed by the Grievance Committee relating to previously charged respondents). If an amended complaint is filed prior to the hearing, the respondent shall be notified, given a copy, and provided the opportunity to file an amended response. The Hearing Panel may disallow the amended complaint. At any time prior to the hearing of the complaint, the Hearing Panel may name the REALTOR® principal as a respondent. Complaints cannot be amended to add, or substitute, other individuals as complainants except as mutually agreed to by the parties. (Revised 11/98)

(2) At any time during the hearing, the complaint may be amended either by the complainant or upon motion of the Hearing Panel to add previously uncited Articles or additional respondents. Amendments to include Articles previously dismissed by the Grievance Committee may be made only on the motion of the Hearing Panel. In such event, the hearing, with the concurrence of the respondent, may proceed uninterrupted or be reconvened on a date certain, not less than fifteen (15) or more than thirty (30) days from adjournment the hearing date, unless a “late” witness is allowed and then not less than five (5) days from the hearing date. If the respondent knowingly waives his right to the adjournment, the record should reflect the fact that the respondent was aware of the right to an adjournment but chose to proceed with the hearing without interruption on the basis of the amended complaint. If the hearing is adjourned to be reconvened at a later time, the amended complaint shall be filed in writing, signed by the complainant or by the Chairperson of the Hearing Panel, and shall be promptly served on the respondent as in all other cases provided herein. To prevent the appearance of bias, at no time during or after an ethics hearing may the Hearing Panel or any appellate body refer concerns regarding potentially unethical conduct to the Grievance Committee. This is based on the premise that the fundamental right and primary responsibility to bring potentially unethical conduct to the attention of the Grievance Committee rests with the parties and others with firsthand knowledge. This prohibition in no way limits or restricts the Hearing Panel from amending pending complaints as otherwise provided for in this section. However, in any instance where a Hearing Panel amends an ethics complaint pending before it, the respondent(s) shall be given the choice of proceeding before the same Hearing Panel either without interruption or when reconvened pursuant to the procedures established elsewhere in this Section) or having the complaint considered in a new hearing before a different Hearing Panel. (Amended 11/14)

• Section 22, (a) through (f), Decision of Hearing Panel, was amended as follows:

(a) The decision of the Hearing Panel shall be by a simple majority vote and in writing (Form #E-11, Decision [Ethics], Part Six and the Professional Standards Training Guide) and shall contain findings of fact and a statement of the disciplinary action recommended, if any. Under no circumstances can the Board award money “damages” in an ethics proceeding. The decision shall include a clear, concise, and objective recitation of the specific facts upon which the Hearing Panel based its conclusion. Such decision shall not be disclosed during the ethics proceeding, or any appeal or rehearing, to any persons except the Directors, the complainant, the respondent, Board legal counsel, and the Secretary. However, failure of confidentiality shall not invalidate the decision.

The decision shall be filed with the Secretary within ten (10) days after the Hearing Panel’s decision is final the day of the hearing, or no later than forty-eight (48) hours following the hearing.* (Revised 11/14)

*The Hearing Panel’s decision shall be considered final only when it is in writing and signed by members of the panel following their personal review and any review by legal counsel which may be required.
Any member of the Hearing Panel not voting with the majority may dissent from all or any portion of the findings or decision and may file a dissent in writing with the Secretary for consideration by the Directors at the same time the decision is considered. Copies of the decisions disseminated pursuant to these procedures shall be complete and unedited unless an Association, by affirmative action of its Board of Directors, adopts procedures under which decisions presented to the Board of Directors for ratification will not include the names of the parties. The dissenting opinion should also be provided to the parties. In the event the respondent is found in violation, the Hearing Panel will consider all records of previous violations and sanctions imposed, whether by the current or by any other Board or Association, in the member’s file in determining discipline, and the rationale for the current disciplinary action can be provided to the parties and the Directors as part of the decision. The Hearing Panel’s consideration will include whether prior disciplinary matters involve discipline that was held in abeyance and that will be triggered by a subsequent violation (including the matter currently under consideration by the Hearing Panel). (Amended 11/13)

(b) The Secretary shall transmit a copy of the decision to the complainant and respondent within five (5) business days after the Secretary has received the Hearing Panel’s decision in writing, except that reasonable delay shall not invalidate the Board’s procedures nor the decision (e.g., when it is necessary to obtain association counsel’s review). (Revised 11/14)

(c) Within twenty (20) days after the decision has been transmitted to the respondent by the Secretary, the complainant or the respondent may petition the Hearing Panel for a rehearing, solely on the grounds of newly discovered material evidence which the petitioner could not, with reasonable diligence, have discovered and produced at the original hearing. The petition must be in writing and include:

(1) a summary of the new evidence

(2) a statement of what the new evidence is intended to show and how it might affect the Hearing Panel’s decision

(3) an explanation of why the petitioner could not have discovered and/or produced the evidence at the time of the original hearing (Amended 11/91)

(d) A petition for rehearing not granted by the Hearing Panel within two (2) weeks of its filing shall automatically be deemed denied. When granted or denied, the Secretary shall immediately inform the respondent and the complainant. No more than one (1) petition for rehearing may be filed in the case by each party. Notice of rehearing shall be given not less than twenty-one (21) days before the rehearing. (Revised 11/98)

(e) Immediately upon the decision becoming final, the Secretary shall transmit it to the President, or, if no decision is made within two (2) weeks, the Secretary shall advise the petitioner that the request for rehearing is deemed denied.

(fc) To avoid any appearance of bias, ethics Hearing Panels shall make no referrals of ethical concerns to the Grievance Committee. This is based on the premise that the fundamental right and primary responsibility to bring potentially unethical conduct to the attention of the Grievance Committee rests with the parties and others with firsthand knowledge. (Revised 11/14)

• Section 23, (a) through (f), Action of the Board of Directors, was amended as follows: 

(a) Within twenty (20) days after the Hearing Panel’s final decision has been transmitted, rendered if no petition for rehearing has been filed, or within twenty (20) days after the Hearing Panel’s final decision subsequent to the rehearing, or within ten (10) days after denial of a petition for rehearing, the complainant or the respondent may file an appeal with the President.* (Revised 11/14)

*Appeal is provided only from decisions rendered in hearings of alleged unethical conduct, and not from the decision of an arbitration panel. However, the Board of Directors reserves the right to review procedures of any ethics or arbitration hearing to ensure compliance with the governing documents of the Board and to rule thereon; and in arbitration hearings, a limited form of appeal is provided only in respect of alleged irregularities related to the arbitration as are alleged to have deprived the party of due process.

(b) If no appeal is filed, the Directors will adopt the Hearing Panel’s recommendation and issue its order accordingly (at its next regularly scheduled meeting or a special meeting designated for that purpose, but no later than thirty [30] days after the date the Hearing Panel’s decision was transmitted to the parties), unless:

(1) the Directors, if concerned with a possible procedural deficiency, may refer the decision back to the Professional Standards Committee for a new hearing and recommendation by a different Hearing Panel;  or

(2) if the Directors are concerned with the appropriateness of the recommendation of sanction, in which case the Directors may impose alternative discipline that does not exceed that recommended by the Hearing Panel, or may refer the decision back to the original Hearing Panel for further consideration and recommendation accompanied by the Directors’ concerns regarding the proposed discipline;  or

(3) if the Directors conclude the findings of fact do not support a possible violation of the Code of Ethics, in which case the complaint will be dismissed. In such matters, advice of Board legal counsel should be requested and considered. (Revised 11/14)

(c)  All appeals must be in writing and must be accompanied by a deposit with the President in the sum of $________ (not to exceed $500). In cases where a single appeal is filed jointly by more than one party, only one filing fee may be assessed. The appeal should clearly indicate the bases on which the Hearing Panel’s decision and/or recommendation for discipline is being challenged — (1) misapplication or misinterpretation of an Article(s) of the Code of Ethics; (2) procedural deficiency or any lack of procedural due process; (3) the discipline recommended by the Hearing Panel — and set forth in reasonable detail the facts and evidence to support the bases cited. The complainant may appeal based only on alleged procedural deficiencies or other lack of procedural due process that may have deprived him of the opportunity for a full and fair hearing. The written request for appeal shall be reviewed within ten (10) days after the appeal was transmitted to the association by the Board President or the President’s designee only for the purpose of determining whether the appeal states any legitimate basis for consideration by the Board of Directors. If determined to be insufficient, it shall be returned to the appellant accompanied by an explanation and a request for additional detail to be received by the  Board within ten (10) days of notice. This initial administrative review is not a decision on the merits of the Appeal request but is only intended to ensure compliance with the requirement that an appeal clearly set forth all bases that will be presented to the Board of Directors for their consideration. All requests for appeals received by the Board must be considered by the Board of Directors, and only those bases and issues raised in the written request for appeal may be raised by the appellant in any hearing before the Board of Directors. (Amended 11/14)

(d) When a request for appeal (as originally filed if in proper form, or as originally filed if no amendment is submitted, or as amended even if still deemed to be lacking) is received, the Secretary shall immediately, within one (1) day, as originally filed or as amended, send a copy to the other party, notify all parties at least ten (10) days in advance of the time and place of hearing by the Directors (including challenge Forms #E-6 and #E-7, Part Six of this Manual), and bring the matter before the Directors for hearing at their next regular meeting or at a special meeting called by the Secretary for the purpose but no later than thirty (30) days after the date of receipt of the appeal. The Secretary shall provide to the Directors in advance of the hearing, copies of the complaint, response, the Hearing Panel’s findings of fact and recommendation of discipline, if any, the President's correspondence, if any, and the appeal request or amended appeal request, if any. The Directors shall be advised that the information is confidential and not to be discussed with others at any time. (Revised 11/14)

(e) At the hearing before the Directors, the Chairperson of the Hearing Panel (or the Chairperson’s designee) shall present a transcript of the case or, if there is no transcript, shall summarize the case. Either party shall be entitled to offer corrections to the summary. Either party may present to the Directors reasons why the Hearing Panel’s recommendation should be followed or not, but no new evidence shall be received (except such new evidence as may bear upon a claim of deprivation of due process), and the appeal shall be determined on the transcript or summary. (Amended 5/09)

(f) The Directors shall render transmit their written decision promptly within five (5) days of the appeal hearing. Their decision may be to adopt or modify the recommendation of the Hearing Panel, including the discipline proposed, or the Directors will dismiss the matter if they conclude the findings of fact do not support the Hearing Panel’s conclusion as to unethical conduct. The Directors, if concerned with a substantial procedural deficiency, may refer the decision back to the Professional Standards Committee for a new hearing and recommendation by a different Hearing Panel. If, however, the Directors are concerned with the appropriateness of the recommendation of sanction, they may impose alternative discipline that does not exceed that recommended by the Hearing Panel, or may refer the decision back to the original Hearing Panel for further consideration and recommendation accompanied by the Directors’ concerns regarding the proposed discipline. In such matters, the advice of Board legal counsel should be requested and considered. (Amended 11/14)

• Appendix V to Part Four, Ethics Hearing Checklist, Appendix V to Part Ten, Arbitration Hearing Checklist; the Summary of Administrative Time Frames – Ethics Proceedings; the Administrative Time Frames – Arbitration Proceedings;  Appendix X to Part Four, and Before you File an Ethics Complaint were amended to reflect the changes to policy noted above.

• Appendix XI to Part Four, Ethics Mediation, was added as follows:

Adoption of ethics mediation procedures
Ethics mediation is a process that may be adopted at the discretion of boards and associations. Ethics mediation will require adoption of these procedures (either verbatim or as amended locally) by action of the local board of directors (or as otherwise provided in the local bylaws).

Appointment of mediators
The chair of the Professional Standards Committee and/or the Board President will select one or more ethics mediators to act on behalf of the committee. Mediators should be thoroughly familiar with the Code of Ethics, state real estate regulations, and current real estate practice.

Complaints that may be mediated
Complaints brought by the public or by other REALTORS® may be mediated under these procedures. Complaints brought by the Grievance Committee and complaints alleging a violation of the public trust (as defined in Article IV, Section 2 of the NAR Bylaws) may not be mediated.

Initiation of ethics mediation procedures
The ethics mediation process can be initiated in two ways. First, through filing a written ethics complaint. Second, through a personal, telephone, or written inquiry or complaint generally alleging potentially unethical conduct but which (a) is not filed on the appropriate form or (b) is not specific as to which Article(s) may have been violated.

Where a written ethics complaint in the appropriate form is received, it will be reviewed by the Grievance Committee so a determination can be made whether a possible violation may have occurred or, alternatively, whether the complaint should be dismissed as not requiring a hearing. Where an informal inquiry or general letter of complaint that does not allege a potential violation of the public trust is received, it will not be reviewed by the Grievance Committee, but will be referred to an ethics mediator.

Participation in ethics mediation is voluntary
Persons inquiring about the process for filing ethics complaints will be advised that ethics mediation is available as an alternative to a formal ethics hearing provided that all parties agree to participate, and also be advised they may decline or withdraw from mediation and have their complaint considered at a formal ethics hearing. Similarly, REALTORS® complained about have the right to decline or withdraw from mediation and to have complaints against them considered at a formal ethics hearing.

Referral of complaints to the mediator
When either a written ethics complaint in the appropriate form is reviewed by the Grievance Committee and the Grievance Committee concludes that a hearing is warranted, or when a general letter of inquiry or complaint is received, and the matter(s) complained of do not involve a possible violation of the “public trust”, the materials received will be referred to the ethics mediator who will contact the parties to schedule a meeting at a mutually agreeable time. “Public trust” refers to misappropriation of client or customer funds or property, willful discrimination, or fraud resulting in substantial economic harm.

During the mediation session the mediator will encourage all parties to openly and candidly discuss all issues and concerns giving rise to the inquiry or complaint, and to develop a resolution acceptable to all of the parties. In the event the mediator concludes that a potential violation of the public trust may have occurred, the mediation process shall be immediately terminated, and the parties shall be advised of their right to pursue a formal ethics complaint; to pursue a complaint with any appropriate governmental or regulatory body; to pursue litigation; or to pursue any other available remedy.

Nature of the mediated resolution
The mediator and the parties have considerable latitude in fashioning a mutually acceptable resolution. Resolutions can include, but are not limited to, payment of disputed funds, repairs or restoration of property, written or oral apology, or acknowledgement of a violation of the Code of Ethics. In cases where a REALTOR® acknowledges that the Code has been violated, that admission may be sufficient to resolve the matter or, alternatively, the parties may agree that discipline should be imposed. The discipline may, at the agreement of all parties, include any of the forms of discipline established in the Code of Ethics and Arbitration Manual and may also include payment of monies to the complainant or to a third party. Also, the parties may agree that the complainant will withdraw a complaint or agree not to file a formal, written ethics complaint in return for the respondent’s action or acknowledgement. Again, any discipline imposed must be agreed to by all of the parties.

Referrals to the Grievance Committee or to state regulatory bodies
Ethics mediators cannot refer concerns they have regarding the conduct of any party to mediation to the Grievance Committee, to the state real estate licensing authority or to any other regulatory body. This prohibition is intended to ensure impartiality and avoid the possible appearance of bias. Mediators are, however, authorized to refer concerns that the public trust may have been violated to the Grievance Committee.

Refusal to comply with agreed upon discipline
Failure or refusal of a respondent to comply with the terms of any mutually agreed on resolution shall entitle the complaining party to resubmit the original complaint or, where a formal complaint in the appropriate form had not been filed, to file an ethics complaint. The time the matter was originally brought to the board or association’s attention shall be considered the filing date for purposes of determining whether an ethics complaint is timely filed.

Confidentiality of mediation process
The allegations, discussions, and decisions rendered in ethics mediation proceedings are confidential and shall not be reported or published by the board, any member of a tribunal, or any party under any circumstances except those established in the Code of Ethics and Arbitration Manual of the National Association as from time to time amended.

• Part Five, Conduct of an Ethics Hearing and Outline of Procedure for Ethics Hearing were amended to clarify when postponements will be granted and that all parties appearing at a hearing may be called as a witness without advance notice. 

The same changes were made to the Outline of Procedure for Ethics Hearing Involving a Complainant and a Counter-Complaint and Part Six, General Instructions and Information for Filing and Replying to Ethics Complaints; Part Twelve, Conduct of an Arbitration Hearing and Outline of Procedure for Arbitration Hearing; and the Outline of Procedure for an Arbitration Hearing Involving a Request and a Counter-Request.

There were numerous ethics and arbitration forms amended to incorporate the changes to policy.  Please see the shaded language in the Manual for details for the following forms:

Form #E-1, Ethics Complaint
Note: The last sentence of this form in the hard copy of the Code of Ethics and Arbitration Manual should be amended to reflect that the complainant has twenty (20) days from transmittal (as opposed to receipt) of the dismissal notice to appeal.
Form #E-2, Notice to Respondent (Ethics)
Form #E-4, Grievance Committee Request for Information (Ethics Complaint)
Form #E-5.1, Grievance Committee Report Form
Form #E-6, Notice of Right to Challenge Tribunal Members
Form #E-8, Official Notice of Hearing (Ethics)
Form #E-9, Outline of Procedure for Ethics Hearing
Form #E-9a, Outline of Procedure for Ethics Hearing Involving a Complainant and Counter-Complaint
Form #E-11, Decision of Ethics Hearing Panel of the Professional Standards Committee
Form #E-14, Official Notice of Appeal Hearing (Ethics)
Note: #(5) in the hard copy of the Code of Ethics and Arbitration Manual should reflect that challenge forms be filed no later than ten (10) days after the date challenge forms were transmitted (as opposed to “are due.”).
Form #E-20, Notice to Respondent (Ethics) and Optional Waiver of Right to Hearing

Form #A-1, Request and Agreement to Arbitrate
Form #A-2, Request and Agreement to Arbitrate (Nonmember)
Form #A-3, Notice to Respondent (Arbitration)
Form #A-4, Response and Agreement to Arbitrate
Form #A-5, Grievance Committee Request for Information (Arbitration Request)
Form #A-7, Notice of Right to Challenge Tribunal Members
Form #A-9, Official Notice of Hearing (Arbitration)
Form #A-10 Outline of Procedure for Arbitration Hearing
Form #A-10a, Outline of Procedure for Arbitration Hearing Involving a Request and a Counter-Request
Form #A-12, Award of Arbitrators

• Section 47 (c), Manner of Invoking Arbitration, was amended as follows: 

If the Grievance Committee finds the matter properly subject to arbitration, the Chairperson shall refer it back to the Secretary with instructions to arrange a hearing, notifying the parties of the Grievance Committee’s decision, informing the parties as to whether the arbitration is  mandatory  or  voluntary  (and,  if voluntary, of the date certain by which the respondent is requested to inform the Board of his decision) and informing the parties of their ability to challenge the classification (see Section 45[d], Board’s Right to Decline Arbitration). The Secretary shall notify the respondent within five (5) days of receipt of the Grievance Committee’s instructions by mailing transmitting a copy of the request for arbitration, the Notice to Respondent (Arbitration) (Form #A-3), and two (2) forms for response (Form #A-4, Response and Agreement to Arbitrate, Part Thirteen), with directions to complete and return the written response and deposit amount of $_____* within fifteen (15) days from the date of mailing transmitting to respondent. The Secretary shall concurrently mail transmit to each of the parties a list of names of members of the Professional Standards Committee (see Part Seven, Section 27, (a) through (f), Qualification for Tribunal; Part Thirteen, Form #A-7, Notice of Right to Challenge Tribunal Members; and Form #A-8, Challenge to Qualifications by Parties to Panel Members). Within fifteen (15) days from the date the names are mailed transmitted to the parties, the Professional Standards Committee Chairperson shall appoint from the names not successfully challenged by either party three (3) or more arbitrators who will hear the dispute. The Chairperson shall also select one of the panel members to serve as Chairperson of the Hearing Panel. Any Hearing Panel must have an odd number of members. At least two (2) shall be REALTORS®, and in the event a REALTOR-ASSOCIATE® or REALTOR® other than a principal has invoked the arbitration through the REALTOR® principal, or is affiliated with the respondent, and has a vested interest in the outcome of the proceeding, one (1) of the arbitrators must be a REALTOR-ASSOCIATE® or REALTOR® other than a principal. It shall be a membership duty of anyone so appointed to serve as an arbitrator unless disqualified. The Professional Standards Committee Chairperson shall select the Chairperson of the Hearing Panel, who shall possess the powers of the neutral arbitrator within the meaning of the ______ arbitration statutes.** A party will be deemed to have waived all objections to any person whose name he does not challenge. If challenge to members of the Professional Standards Committee results in an insufficient number of members to constitute a panel, the President may appoint other qualified Board Members to serve as panel members. No arbitration may proceed without three (3) or more arbitrators not disqualified pursuant to Part Seven, Section 27, Qualification for Tribunal. (Revised 11/14)

• Section 51 (a) and (b), Arbitration Hearing, were amended as follows: 

(a) Not sooner than fifteen (15) days nor later than twenty-one (21) days after mailing transmitting notice to the respondent of the request for arbitration, the Secretary shall mail transmit to the complainant a copy of the response and respondent’s affirmative claim, if any. (Revised 11/14)

In the case of an arbitration request involving issues related to areas of the real estate business such as commercial, investment, industrial, etc., where there is an insufficient number of qualified practitioners on the Board’s Professional Standards Committee to  provide a representative peer panel, the Board President shall appoint other Board Members qualified in that field to serve as panel members. If the Board President is unable to identify a sufficient number of qualified members to serve on a panel, the President shall report that fact to the Directors at their next regularly scheduled meeting. If the Board of Directors concurs, the request shall be referred to the State Association pursuant to Part Fourteen of this Manual. If the State Association is unable to provide a representative peer panel, the parties shall be released from their obligation to arbitrate. (Revised 11/98)

(b) The Secretary shall inform the parties of the date, time, and place of the hearing established by the arbitrators (or the Chairperson of the Professional Standards Committee) (Form #A-9, Official Notice of Hearing, Part Thirteen).* The arbitration request and response, if any, shall be provided to Hearing Panel members prior to the hearing. Such time period shall be ___ (as determined by the Board of Directors) and shall be adhered to for all hearings. Board’s conducting arbitration must also provide all parties and panel members with the Arbitration Guidelines prior to commencement of any arbitration hearing (including the Arbitration Worksheet). The parties shall be given at least twenty-one (21) days’ prior notice of the hearing, but appearance at a hearing without objection by a party will constitute a waiver of any defective notice of the hearing. The arbitrators may recess the hearing from time to time as necessary and, on request of a party or upon the arbitrator’s own motion, may postpone the hearing for not more than thirty (30) days, unless otherwise agreed to by the parties 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 request for continuance would deny the requestor a fair hearing. (Revised 11/14)

• Section 53 (a), (b), (c) and (d), The Award, were amended as follows:
 
(a) The award of the arbitrators (Form #A-12, Award of Arbitrators, Part Thirteen) shall be made as soon as possible after the evidence is presented. The award shall be in writing and signed by the arbitrators or a majority of them, shall state only the amount of the award, and, when so signed and served on transmitted to each of the parties, shall be valid and binding and shall not be subject to review or appeal. Any award rendered may not be greater than the amount in dispute, may not include punitive damages, may not include attorney’s fees unless expressly provided for in the agreement giving rise to the dispute, and may not include interest unless called for in the arbitration agreement and permitted by state law. Notwithstanding the foregoing, a party to an arbitration proceeding may appeal to the Board of Directors only with respect to such alleged irregularities occurring in the conduct of the proceeding as may have deprived the party of fundamental “due process.” (Revised 11/14)

(b) After the award has been served upon transmitted to each of the parties, they have twenty (20) days to request procedural review of the arbitration hearing procedure by the Board of Directors. (Revised 11/14)

If no such review is requested, the award becomes final and binding following the twenty (20) day period. However, if procedural review is requested, the award is not considered final and binding until after the Board of Directors has concluded that the hearing was conducted in a manner consistent with the Board’s procedures and the parties had been afforded due process.

NOTE: Adoption of Section 53(c)-(f) is at the option of each Member Board.

(c) If an award has been rendered, the nonprevailing party must, within ten (10) days following receipt transmittal of the award, either (1) pay the award to the party(ies) named in the award or (2) deposit the funds with the Board Secretary or Board Executive Officer to be held in a special Board escrow account maintained for this purpose. Failure to satisfy the award or to deposit the funds with the Board within this time period may be considered a violation of a membership duty and may subject the member to disciplinary action at the discretion of the Board of Directors. (Revised 11/14)

The nonprevailing party shall have twenty (20) days following service transmittal of the award to request procedural review of the arbitration hearing procedure or to have legal counsel notify the Board Secretary or Executive Officer that a legal challenge to the validity of the award has been initiated. (Revised 11/14)

(d) If a request for procedural review of the arbitration procedure is received within twenty (20) days, the funds deposited with the Board shall be retained in the Board’s escrow account until the review is completed. If the arbitration award is confirmed by the Board of Directors following the conduct of the limited procedural review, the nonprevailing party shall have an additional fifteen (15) days to institute an appropriate legal challenge to the validity of the arbitration award. In such case, the nonprevailing party shall also cause legal counsel to advise the Board in writing that a suit challenging the validity of the arbitration award has been filed during this additional fifteen (15) day period. After fifteen (15) days, if written notice of a suit challenging the validity of the arbitration award has not been received by the Board, the funds shall be released from escrow and paid to the prevailing party. If written notification is received during the fifteen (15) day period, the funds will be held in escrow pending the determination of the matter by a court of competent jurisdiction. (Adopted 11/87)

If the nonprevailing party does not request the Board to conduct a procedural review of the arbitration hearing process during the twenty (20) day period following service transmittal of the award, then written notification that a legal challenge has been instituted must be received within the twenty (20) days following service transmittal of the award. Failure to provide written notification that a suit challenging the validity of the award has been filed within twenty (20) days following service transmittal of the award will result in the award being paid from the Board’s escrow to the prevailing party. (Revised 11/14)

• Section 55 (a), Request for Procedural Review by Directors, was amended as follows:

(a)  A written request for procedural review of the arbitration hearing procedures must be filed with the President within twenty (20) days after the award has been served on transmitted to the parties and be accompanied by a deposit in the sum of $_______ (not to exceed $500). The request for procedural review should cite the alleged procedural deficiencies or other irregularities the party believes constitute a deprivation of due process (e.g., fraud, coercion, bias, prejudice, evident partiality, etc.) on the part of Hearing Panel members or others acting on behalf of the Board. The request for procedural review shall be reviewed by the Board President or the President’s designee only for the purpose of determining whether the request states any legitimate basis for consideration by the Board of Directors. If determined to be insufficient, it shall be returned to the requester accompanied by an explanation and a request for additional detail to be received by the Board within ten (10) days of notice. This initial administrative review is not a decision on the merits of the request for procedural review but is intended only to ensure compliance with the requirement that the request cite the alleged procedural deficiency or irregularity on which the request is based and which will be presented to the Board of Directors for its consideration. All requests for procedural review received by the Board must be considered by the Board of Directors, and only the bases raised in the written request for procedural review may be raised during the review before the Directors. (Amended 11/14)

• Section 56, Enforcement, was amended as follows:

The judgment of any competent court of record in __________ (state), state or federal, may be rendered upon the award. If a member fails to comply with an award or the terms of a mediated settlement agreement, the recipient to whom the award has been rendered by the arbitration panel or the beneficiary of a settlement agreement reached by the parties in mediation shall be advised by the Board to seek judicial enforcement and to request reimbursement of legal fees incurred in seeking enforcement. At the discretion of the Board of Directors, the Board may support the request for judicial enforcement in the court, and at its further discretion, the Board may reimburse the individual for costs incurred in seeking such judicial enforcement if the court does not grant reimbursement of legal costs to the plaintiff. (Revised 11/14)

Note:  Similar changes were made to Appendix VI to Part Ten, Arbitration Hearing Checklist, #37; and Part Eleven, Interboard Arbitration Procedures, Enforcement.


Additional Points of Interest

1. There were no changes to the Code of Ethics and Standards of Practice or any Case Interpretations.

2. The National Association’s Professional Standards Education Seminar will be held in Chicago August 27 and 28, 2015.  For more information in mid-January, please click here.

3. The National Association’s Mediation Training Seminar will be held in Chicago April 29 and 30 and May 1.  For more information in mid-January, please click here.

4. At the recent Convention in New Orleans, the Board of Directors of the National Association of REALTORS® amended the four year time frame for Code of Ethics training to a two year time frame. The change goes into effect following conclusion of the current four year cycle on December 31, 2016. Consequently, beginning January 1, 2017 all REALTORS® will be required to complete Code of Ethics training every two years. The National Association’s Model Board Bylaws and Professional Standard Policy Statement #48, REALTORS® Code of Ethics Training, will eventually be amended to incorporate a two year time frame but not until completion of the current four year cycle.

5. Staff primarily responsible for administration of professional standards processes must successfully complete training consistent with Professional Standards Policy Statement #49.  If staff has not successfully completed such training, they must do so before becoming primarily responsible for the administration of professional standards processes.  If staff has previously completed such training, they have until December 31, 2018 to complete another training.  Once staff completes their training, they have four years from that specific date to complete their next training. 

6. The complete listing, in chronological order, of all Statements of Professional Standards Policy is available on-line at nar.realtor.  Policy Statements applicable to ethics and arbitration remain in the Code of Ethics and Arbitration Manual in their respective sections, but the complete listing now appears online here.

7. The Professional Standards Training Guide is also online here.

8. Pathways to Professionalism has moved from the back of the Code of Ethics and Arbitration Manual to the front of the Manual, just before the Preface. Pathways to Professionalism is online here.

9. Associations interested in adopting a citation policy, a citation schedule of potential violations, and specific fines that apply to those violations may view the National Associations Model Citation Policy here.

10. Associations interested in adopting an optional “fast track” process for receipt, consideration, and resolution of ethics complaints may view an online supplement to the 2015 Code of Ethics and Arbitration Manual.”

11. Enhanced ombudsman resources are also available online here.

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