Core Standards Work Group - Meeting Summary

NATIONAL ASSOCIATION OF REALTORS®

Association Executives Committee

Core Standards Review Work Group

February 11-12, 2016

Chicago

Report and Recommendations

Work Group Purpose

To review the Organizational Alignment/ Core Standards policy and determine whether enhancements to the policy or to the compliance certification process should be recommended to the Board of Directors beginning with the third Core Standards cycle. 

Background

Local, state, and territorial associations of REALTORS®, as a condition of membership in the National Association of REALTORS®, must meet NAR’s Organizational/Alignment Core Standards.  The purpose of the Core Standards, which were adopted by NAR’s Board of Directors in May 2014, is to raise the bar for REALTOR® associations and ensure high-quality information and services for all REALTORS®. The standards fall into six categories:

  • Code of Ethics
  • Advocacy
  • Consumer Outreach     
  • Unification Efforts and Support of the REALTOR® Organization
  • Technology
  • Financial Solvency

REALTOR® associations must demonstrate compliance with the standards by June 30 each year or be subject to revocation of their charter.

During the first compliance cycle (May 17, 2014-June 30, 2015), NAR  paid out $6.6 million dollars in grants to local and state associations. Grants were made to state associations to support their efforts to assist and support local associations’ efforts to meet the Core Standards and to review and certify local associations’ compliance; to subsidize the costs  incurred by local and state associations in developing strategic and/or business plans, and to  facilitate 85 successful mergers.

During the first compliance cycle the 85 mergers involved 194 associations, with 108 of those associations voluntarily surrendering their NAR-granted charters.   Additionally, 27 other local associations voluntarily surrendered their charters without being involved in a merger.  At the 2015 REALTORS® Conference and Expo the charters of 16 local associations were revoked by the Board of Directors for noncompliance with the Core Standards..

When the Organizational Alignment/Core Standards initiative began there were 1,355 local associations. There are currently 1204 local associations, representing a decrease of 151 local associations, or 11% fewer associations than when the initiative started. 

As the end of the first Core Standards cycle was approaching in mid-2015, Association Executives Committee leadership proposed formation of a work group to review both the successes and challenges of the Core Standards program.  The following issues were addressed by the work group. Also included are recommendations intended to enhance the policy and the compliance certification process.

Annual Deadline Date

The work group recommends transitioning to a calendar year compliance schedule. The third cycle would be a transitional 18 month cycle, beginning July 1, 2016, and ending December 31, 2017. Subsequent cycles would be 12 months, coinciding with the calendar year.  State associations could still establish an earlier submission date by their local associations, but those local associations would still have until the end of the calendar year/compliance cycle to demonstrate their compliance.  State associations would then have until the end of February to complete their review/certification process.  Appeals to the determinations of noncompliance could be filed during March, with the NAR appeal hearings conducted in April.  The NAR Board of Directors would then act on charter revocations during the May Legislative Meetings.

Frequency of Certification

The work group recommends retaining the current policy requiring annual compliance certification.

Financial grants for mergers/consolidations

The work group recommends that the NAR Finance Committee consider extending the availability of grants for mergers and, on a case-by-case basis, for dissolutions that occur without a formal merger occurring.  The work group believes that during the current (second) cycle many associations are finding that a merger is their best option to serve their members and comply with the Core Standards.  Continued merger funding would help ensure stronger and more viable associations providing the best possible information and service to members and the communities they serve.  Merger grants will be available for the first 25 merged associations in the third cycle, which begins July 1, 2016.

Professional Development Requirement for Associations without Staff

The work group recommends that the existing six (6) hour professional development requirement for association chief staff be expanded to extend the requirement to elected and appointed REALTOR® members who perform administrative functions commonly performed by paid staff.

The work group proposed the following implementational wording:

Local and state association chief staff must complete at least six hours of REALTOR® association professional development on an annual basis. In associations without paid staff, this requirement is applicable to the individual primarily responsible for performing the functions ordinarily carried out by paid staff in other associations.

Professional Development Requirement for Elected Leaders

The work group recommends that the Core Standards be expanded through addition of a new requirement requiring all local and state associations to provide resources for or access to leadership development education/ training for elected REALTOR® leaders.  This proposed requirement contemplates that all local and state associations would be required to document the training, tools, programs, and resources they offer or provide access to in a given year. 

Strategic Plan Review Requirement

The work group recommends that all local and state associations, through their respective board of directors, be required to annually certify that they have reviewed and discussed the association’s business or strategic plan, that these plans include an advocacy component and a consumer outreach component, and that they have actionable implementation strategies.

Financial Solvency Requirements 

The work group recommends that the NAR Finance Committee consider amending the authorization for associations with less than $50,000 in gross revenues to meet the Core Standards by obtaining an annual “CPA’s Compilation Report” to expressly include association revenues generated from MLS operations and from other business subsidiaries. CPA letters of engagement are no longer necessary, since the proposed Core Standards compliance deadline is year end.

Performance Reviews for State and Local Chief Paid Staff

The work group recommends that the Core Standards be expanded to include a new requirement requiring all local and state associations to adopt policies governing annual performance reviews for the chief paid staff. 

Increased Advocacy Requirements

The work group recommends that to comply with the Core Standards associations must be required to request voluntary RPAC and/or PAF contributions on dues billings (or write a check for the full amount of any NAR established RPAC goal) and to participate in NAR and state association Calls for Action. Associations must also support REALTOR® Party program goals by completing two initiatives in each of the “Vote, Act, Invest” categories, for a total of eight Advocacy activities.  Below are examples of “Vote, Act, Invest” activities and initiatives that associations would be able to engage in to comply with the Advocacy component of the Core Standards.

Vote

Candidate interviews/endorsements

Campaign services (polling and research, direct mail, phone banks, data analysis, etc.)

Independent expenditures

Issues mobilization or issues advocacy

Voter registration promotion

Voter influence initiatives (internally to REALTORS®; externally to consumers)

Consumer mobilization for elections

Promotion of public policy positions of the organization

Other

Act

Coalition efforts/projects

Communication, marketing, education examples of association’s advocacy promotion initiatives

Broker Involvement initiatives (local, state, national levels)

Meeting with elected officials

Community based advocacy

Consumer mobilization for advocacy

Testifying on REALTOR® positions

Candidate forums or presentations

Elected official outreach endeavors

Involvement/monitoring engagement for councils, commissions, chambers, government entities, regulatory agencies, etc.)

Other

Invest

Participation in soft dollar fundraising programs (e.g., corporate ally program)

Partnered fundraising programs (collaborative efforts with RPAC, local and state associations)

Major donor events

PAC fundraising activities

Host candidate fundraisers

Hard dollar fundraising initiatives

Soft dollar fundraising initiatives

Fundraising recognition programs

Fundraising specialty programs

Other

Consumer Outreach

The work group recommends that the Section III, Consumer Outreach, Subsection (iii), Advocacy Efforts, #32-35 in the online Core Standards Compliance Tool be deleted  because those activities/initiatives would be addressed  Under Section II, “Advocacy” if the recommendation immediately preceding this one is adopted

The work group also recommends that Subsections ii, “Community Involvement” and Subsection iv, Community Investment be combined, with local and state associations being required to engage annually in two activities/initiatives in each of the  remaining two categories, i.e. “Being the ‘Voice for Real Estate’” and “Community Involvement.

 If adopted, this would require associations to organize, conduct, and/or participate in consumer outreach initiatives to ensure compliance; a financial sponsorship alone would not meet the requirement. Associations could comply by engaging in activities with chambers of commerce, charitable groups, education institutions, regulatory groups, or economic development agencies.

Member Education

The work group recommends that the Organizational Alignment/Core Standards policy be expanded to require associations to offer, promote or provide professional development opportunities for their members. If adopted, the following proposed wording could be added to Section IV, Unification Efforts and Support for the REALTOR® Organization, of the online Compliance Tool:

Associations must offer, promote, or provide access to at least one professional development opportunity for members each year. Acceptable programs, which may be offered by another REALTOR® association, include CE courses, online or classroom sessions, partnered programs, lunch and learn sessions, etc.

REALTOR® Safety

The work group recommends that the Organizational Alignment/Core Standards policy be expanded to require associations to conduct or promote an annual REALTOR® safety activity.

Appeal Hearing Process

The work group recommends that the existing appeal hearing process procedures be amended to incorporate the proposed calendar year compliance cycle.  If adopted, local associations would have until March 30th to appeal state associations’ determinations of noncompliance, with the NAR Association Executives Committee conducting the appeal hearings in April.  Under the proposed calendar year cycle, local associations would need to demonstrate compliance with the Core Standards by December 31 each year, with the hearing panels retaining the authority to grant extensions until April 30, by which time compliance would have to be demonstrated to the hearing panel or its designee. It is recommended that appeal hearing compliance extensions be granted only when associations can show substantial compliance with the Core Standards.

The work group also recommends that the procedure under which the NAR Association Executives Committee chair and vice chair recommend potential panel members for appointment by the NAR president be retained, with panels having at least five members. The process should be revised to make it clear that association executives other than those currently serving on the NAR Association Executives Committee are eligible to serve as appeal hearing panel members. 

Core Standards Compliance Tool

The work group identified several potential enhancements to the online Compliance Tool. These were shared with NAR staff. The work group acknowledges that implementing these changes would require NAR staff and financial resources, with the Compliance Tool being unavailable for a period of time between the second and third Core Standards cycles for programming, testing and implementation. 

Resources

Work group members recommended that the following Core Standards information and resource initiatives be developed and made available to local and state associations:

  • Informational webinars for association chief staff and elected REALTOR® leaders, explaining any changes to the Core Standards for the third cycle.
  •  Presentation(s) at the 2016 Leadership Summit to help elected REALTOR® leaders understand the value and importance of the Core Standards.
  • A Best Practices compilation with examples from state associations and local associations posted on nar.realtor
  • Video and/or PowerPoint presentation materials that state and local associations could use at new member orientations and board of directors meetings to help association members and leaders understand and appreciate the benefits of the Organizational Alignment/Core Standards initiative.
  • Encourage a Core Standards dialogue at the Local and State Leadership Idea Exchange Councils with attendees sharing successes and challenges. 

Next Steps

  • Distribute the AEC Core Standards Work Group report to all AEs, via the INS, prior to the REALTOR® Legislative Meetings in May.
  • Solicit questions on the proposed changes to the Core Standards and distribute an FAQ that can be distributed to AEs in the INS prior to the REALTOR® Legislative Meetings.
  • Present the AEC Core Standards Work Group report and accompanying legislative style amendments to the actual Organizational Alignment policy and to the Organizational Alignment/Core Standards Appeal Hearing process to the AEC during the REALTORS® Legislative Meetings.  If approved by the AEC, the amendments would be recommended to the Executive Committee and Board of Directors.

Work Group Members

Travis Kessler, RCE, CAE, Chair

Gavin Blair, RCE

Andrea Bushnell, RCE

Maranda DeSanto, RCE

Ginger Downs, RCE, CAE

John Dulezewski

John Fridlington, RCE, CAE

Rebecca Grossman, RCE

Lisa Noon, RCE, CAE

Carol Seal, RCE

Ryan Tucholski, RCE, CAE

Marc Lebowitz, RCE, CAE, AEC Chair

Mike Theo, CAE, AEC Chair

Download

Download the proposed revisions (PDF: 72KB)

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