Article VIII, Section 3 of the Constitution of the National Association provides for the establishment of the Professional Standards Committee. Until 1988, the Committee was comprised of 36 members, appointed for staggered, three-year terms, plus a member representing each of the Institutes, Societies, and Councils, totaling 45 members. The representatives of the Institutes, Societies, and Councils are appointed by their respective presidents for one-year terms.
As a part of its overall review of the Association, NAR's Structural Audit Committee recommended that the Professional Standards Committee be enlarged to 87 members, to provide for at least one representative from each State Association. Because enlarging the Committee requires a constitutional amendment, the Structural Audit Committee's recommendation came before the Board of Directors and the Delegate Body during the 1987 Convention, and was approved. As a result, since 1988, the Professional Standards Committee has been comprised of 100 members.
The Professional Standards Committee meets during each of the regularly scheduled meetings of the National Association.
NAR's Constitution specifically provides:
- It shall be the duty of this Committee to interpret the Code of Ethics, to consider and recommend appropriate action on inquiries of Member Boards and Board Members concerning enforcement thereof, and to recommend amendments thereto as it deems necessary or advisable.
An Interpretations and Procedures Subcommittee of the Professional Standards Advisory Board is comprised of approximately 15 members of the full committee. This Advisory Board generally meets twice a year for two consecutive days to intensively consider the issues presented by Board Members and Member Boards. The Advisory Board makes recommendations to be considered by the full Professional Standards Committee.
A recommendation by the Interpretations and Procedures Advisory Board is simply that—a recommendation. The Professional Standards Committee may accept, reject, or modify a recommendation, as appropriate.
One of the Committee's most important responsibilities is to ensure that the Code of Ethics is interpreted and understood in a uniform, consistent fashion nationwide.
Interpretation of the Code
Every member of the National Association has the right to request an interpretation or clarification of the meaning and intent of the Code of Ethics. Many of these requests for information are handled by staff who refer them to existing Standards of Practice, Case Interpretations, Statements of Professional Standards policy, or to the pertinent sections of the Code of Ethics and Arbitration Manual and Professionalism in Real Estate Practice, or to other relevant policies.
If an un-addressed issue arises, or if it appears that existing policy may merit reconsideration, the issue, together with any necessary background information and documentation, is generally placed on the agenda for an Interpretations and Procedures Advisory Board meeting. If the Advisory Board determines that a matter has potentially national implications, it is considered and a recommendation is made for the full Professional Standards Committee to consider the issue during its next meeting.
If a matter is unique and not likely to occur with any degree of frequency, the Advisory Board will provide staff with the necessary guidance to prepare a response to that question.
The ethical obligations of REALTORS® and REALTOR-ASSOCIATE®s are expressed through:
- Articles of the Code of Ethics
- Standards of Practice
- Case Interpretations
Proposed amendments to the Articles of the Code of Ethics must be noticed to all Member Boards and approved by the Board of Directors and the Delegate Body of the National Association during the Annual Convention.
Standards of Practice may be established, amended, or rescinded by the Board of Directors of the National Association during any of the regularly scheduled meetings.
Case Interpretations require the approval of the Professional Standards Committee and do not require the Board of Directors' approval.
Code of Ethics Enforcement
The mediation, grievance, ethics, and arbitration procedures established in the Code of Ethics and Arbitration Manual undergo continuous review and scrutiny.
Many procedural questions directed to the Professional Standards Committee are answered by staff and counsel on the Committee's behalf. Staff responses are based on existing policies previously approved by the Committee and on the advice of NAR legal counsel. However, if staff is unable to respond to a question, or if the Member or Board raising the question does not agree with staff's response, the question is referred to the Professional Standards Committee for consideration.
Similarly, many valuable suggestions and recommendations that refine and improve the procedures in the Code of Ethics and Arbitration Manual are provided by State Professional Standards Chairs, and by other Board members and Executive Officers. Such suggestions and recommendations are received, analyzed by staff and counsel, and with the Chair's approval, placed on the Committee's agenda for consideration. If approved, the recommendations are bulletined to Member Boards and State Associations and incorporated in the Code of Ethics and Arbitration Manual when it is updated.
The Professional Standards Committee also considers the comments and suggestions of Board and State Association legal counsel to ensure that the procedures in the Manual remain consistent with developing law trends.
Professional Standards and Mediation Training Programs and Materials
On a continuing basis, the Professional Standards Committee establishes various programs and provides training materials and assistance to Member Boards and State Associations. Among the materials are:
- The Code of Ethics and Standards of Practice
- The Code of Ethics and Arbitration Manual, which contains the Interpretations of the Code of Ethics
- Professionalism in Real Estate Practice
- The Mediator/Mediation Training Seminar
The NAR Association Leadership Development group offers many learning resources, including:
- Advanced Administrative Concepts—Professional Standards (with a section on the National Association’s Dispute Resolution System)—A self-study course for REALTOR® association management
The National Association staff who support the Professional Standards Committee are also available to participate in training programs sponsored by State Associations, as available resources permit.
The National Association has two online ethics training courses offered through nar.realtor which meet the learning objectives and criteria of Statements of Professional Standards Policy #47 (New Member Code of Ethics Orientation) and #48 (REALTOR® Code of Ethics Training For Existing Members). Access these courses online:
Four brochures are available as four-panel self-mailers designed to be personalized with your board’s or association’s name, address, and telephone number. See below for details on each.
- The Code of Ethics – REALTORS®’ Pledge of Performance and Service: This brochure details the 17 Articles of the REALTORS®’s Code of Ethics with the categories “Duties to Clients and Customers,” “Duties to the Public," and “Duties to REALTORS®.” Excellent for listing presentations or as a handout for new member orientation.
- Code of Ethics Enforcement – An Association Service: Problems with a REALTOR® and not sure where to turn? Ready to take matters into your own hands, but afraid of being buried under paperwork? Let your local board’s/association’s Code of Ethics enforcement program point you in the right direction. Included in this brochure are the history of the NAR Code of Ethics, answers to some commonly asked questions about ethics and arbitration, and an ethics complaint/arbitration request checklist.
- Mediation – The Winning Solution (Two versions are available: "Mediation – The Winning Solution for Brokers" and "Mediation – The Winning Solution for Buyers and Sellers"): Even REALTORS® who are committed to a higher standard of conduct occasionally have honest business disputes with other professionals, clients, or customers. Arbitration is valuable in resolving these disputes, but mediation is simpler and the parties involved agree on their own resolution. This brochure highlights the benefits of mediation and explains the mediation process.
Additional training course materials, agendas, outlines and other resources are available in the Professional Standards Training Guide.
Additional resource: Code of Ethics Bookmarker.
- The authority to enforce the Code is specifically delegated to Member Boards and State Associations acting through their Grievance and Professional Standards Committees.
- The Professional Standards Committee of the National Association interprets the Code and establishes appropriate enforcement procedures.
- Inquiries about the meaning of the Code or its enforcement should be directed to the Committee.
- The Professional Standards Committee continuously reviews the Code, the Standards of Practice, and the Case Interpretations to ensure that they remain meaningful and accurate.
- The Professional Standards Committee provides publications and develops expert instructors to ensure consistent and uniform interpretation and enforcement of the Code of Ethics.