Note: These additional FAQs supplement the full Core Standards FAQs available on nar.realtor and are incorporated into that document.
See also: Core Standards FAQ Supplement - October 2014
3.1. What financial and other resources are or will be available from NAR to facilitate mergers?
Grants at a minimum of $15,000 and a maximum of $25,000 are available to merged associations. Grant amount are calculated at $25 times the number of primary REALTOR® members in the newly-merged association but will not exceed $25,000. The merger grants will be available for two years because it's anticipated that in some cases merger discussions may not commence until after the associations have first attempted to meet the Core Standards; also because merger negotiations can take considerable time to complete.
Special Supplemental Note to FAQ 3.1 - October 29, 2014
In order to provide a greater level of support to the local association community as they consider mergers to better serve members and achieve compliance with the Core Standards, the NAR Finance Committee has expanded eligibility for merger grants as follows:
The initial merger grant process, as outlined above, will continue. Initial mergers will be funded at $25 per member in the resulting merged association, with the minimum grant remaining $15,000 and the maximum grant also remaining $25,000. As initially approved and published, only one grant of not more than $25,000 was available to any merged association; any subsequent additional merger activity involving that association was not eligible for a further merger grant.
Effective immediately, funding for subsequent or "second generation" merger grants are available at the same rate of $25 per member, up to a maximum of $25,000 for an additional merger, but will be computed only on any incremental gain in membership to the final merged organization. The calculation of such grants will not include members who were included in the calculation of another merger grant. These supplemental merger funds will be available through the end of merger grant period, June 30, 2016.
Example: If an association that has 2,000 primary REALTOR® members merges with an association with 500 primary REALTOR® members (the "first merger"), the resulting entity would be eligible for a grant of $25,000. If that newly-merged association is later involved in a subsequent merger under which the previously-merged 2,500 member association now merges with a different 500 member association, an additional grant of $12,500 (500 additional members times $25 = $12,500) will be available. The additional grant (based on the second merger) cannot include the first 2,500 members (the total as a result of the first merger) because they were previously included in an earlier grant calculation. Only the additional incremental primary REALTOR® members added as a result of the second merger can be considered in this next grant calculation.
3.1.1. Our association previously merged with another association, resulting in the newly-merged association having eight hundred primary REALTOR® members. We requested - and received - an NAR merger grant of $20,000 (800 members times $25). We are now considering a merger with another association which, if consummated, will increase our membership to approximately nine hundred fifty primary REALTOR® members. Would we be eligible for a second merger grant, and if we would be, how would it be calculated?
You would be eligible for a second merger grant. It would be based on the one hundred fifty additional primary REALTOR® members gained through the second merger or $3,750. (Revised 10.29.14)
3.1.2. Our association has 250 members. We are in the process of completing a merger with another association that will result in the newly-merged association having 400 primary REALTOR® members. We realize the merger grant available from NAR would be greater than 400 members times $25 since the minimum grant amount is $15,000. Our question is if we later merge with still another association bringing the total of primary REALTOR® members to 500, would we then be eligible for a second merger grant of $15,000? If not, what amount would we be eligible for?
Under these circumstances, a second merger grant would be available. It would be calculated on the number of additional primary REALTOR® members gained through the second merger (100 additional primary REALTOR® members times $25 = $2,500). However, the calculation must exclude any of the 100 additional primary REALTOR® members gained if they were previously included in the calculation of different merger grant. (Revised 10.29.14)
3.1.3. Following up on question 3.1.2, what if we complete a third merger resulting in an association with 750 primary REALTOR® members. Would we then be eligible for another merger grant, and what would it be.
Yes, a second grant would be available. Because the initial grant was the minimum payable ($15,000) which is equivalent to 600 members times $25, the additional funds available as a result of the second merger would be $3,750 (150 members times $25) Members included in a previous merger grant calculation cannot be included in the calculation of the grant. (Revised 10.29.14)
3.1.4. We are a large association involved in merger discussions with several smaller associations. One of the mergers is about to be finalized. It will result in the newly-merged association having eleven hundred members. We realize the grant money from NAR is capped at $25,000. But if the pending merger is consummated and the newly-merged association later merges with still another association - resulting an association with twelve hundred and fifty primary REALTOR® members - are we eligible for another $25,000 merger grant?
The association would be eligible for a subsequent merger grant, but that grant would be calculated on the number of additional primary REALTOR® members gained (150 additional primary REALTOR® members times $25 = 3,750). But keep in mind that any of the 150 additional primary REALTOR® members gained who were already included in the calculation of another merger grant cannot be included in the calculation of a subsequent merger grant calculation. (Revised 10.29.14)
3.1.5. Our recently merged association (formerly Association A and Association B, now Association AB) is considering merging with Association XY. Until recently, Association XY was two associations - Association X and Association Y. They merged and the resulting association is Association XY.
Following the merger, Association AB had 1,500 members. We applied for and received an NAR merger grant of $25,000.
When Association X (300 members) and Association Y (200 members) merged, the resulting Association XY had a total of 500 primary REALTOR® members.
Our question is when Association AB merges with Association XY to create Association ABXY with 2,000 primary REALTOR® members, will the newly-merged association be eligible for another NAR merger grant? If it is, how will the amount be calculated?
Under these circumstances a third NAR merger grant is not available. While this merger brings an additional 500 primary REALTOR® members to the association now known as ABXY, the two earlier merger grants (to AB and to XY) were based on the size of the membership of the resulting associations (1,500 members of AB and 500 members of XY). Since the number of primary REALTOR® members in the new Association ABXY is not greater than the memberships of AB and XY at the time they each received merger grants, they are not eligible for an additional grant.
If the facts were different, the outcome could be different. If, for example, Association AB gained an additional 100 primary REALTOR® members after A and B merged, and now AB and XY merge, a merger grant could be made based on the 100 members who weren't included in the calculations of either the AB or the XY mergers. So an additional grant of $2,500 would be available (100 additional primary REALTOR® members times $25) (Added 10.29.14)
5.5.8. What does it mean to include RPAC "above the line" or "below the line" in my dues billing statement?
Including RPAC "above the line" means the suggested RPAC investment amount is included in the total amount due, even though the RPAC investment is voluntary and non-payment does not affect the member's membership status. The statement should also indicate that the member may deduct the amount of the contribution from the "Total" due if he or she elects not to contribute. "Below the line" means the suggested RPAC investment amount is NOT included in total amount due to satisfy the member's dues requirements. Sometimes, a second "total" line may be added so the member can see the amount with and without the voluntary RPAC investment.
Don't forget to include an RPAC disclaimer on your dues billing. Below is the disclaimer required by the Federal Election Commission (FEC). Check with your state association as you must also include the required state disclaimer.
RPAC Disclaimer required by FEC
Contributions are not deductible for federal income tax purposes. Contributions to RPAC are voluntary and are used for political purposes. You may contribute more or less than the suggested amount. You may refuse to contribute without reprisal and the National Association of REALTORS or any of its state or local associations will not favor or disfavor any members because of the amount contributed. 70% of each contribution is used by your state PAC to support state and local political candidates. Until your state PAC reaches its RPAC goal, 30% is sent to National RPAC to support federal candidates and is charged against your limits under 2 U.S.C.441a. After the state RPAC reaches its RPAC goal it may elect to retain your entire contribution for use in supporting state and local candidates.
Sample RPAC dues billing statements below:
6.2.1. Must every state and territorial association have a standing Professional Standards Committee?
Not necessarily. While enforcement of the Code of Ethics is commonly accomplished through associations’ Professional Standards Committees and Boards of Directors, the Organizational Alignment recommendations approved by the NAR Board of Directors recognized that most associations are already required to enter into cooperative enforcement agreements (please refer to Professional Standards Policy Statement #40 in the NAR Code of Ethics and Arbitration Manual). Following is taken from the actions of the NAR Board of Directors in May, 2014:
Every association will maintain a viable professional standards process to enforce the Code of Ethics and provide arbitration and mediation as member services. Associations must have a fully functioning professional standards committee with administrative capacity to conduct the program, or must administer professional standards enforcement through a multi-board (or regional) professional standards agreement with other associations or with the state association.
While cooperative enforcement agreements generally delegate some or all of a local association’s Code enforcement responsibility to a multi-board or regional process – or to the state association, there is no prohibition on state associations entering into an agreement under which some or all of the state association’s Code enforcement responsibilities are delegated to another association, or are administered pursuant to a regional or multi-board enforcement process. (Added 10.24.14)
7.2. Activities described as “Community Investment” (e.g. Housing Opportunity Grants, Smart Growth Grants, participation in a Habitat For Humanity Build, community fundraising events, etc.) in the Compliance Tool are organized and conducted by our association’s wholly-owned subsidiary Foundation. Do activities like these satisfy the Core Standards if they’re conducted by our REALTOR® Foundation?
Yes. (Added 10.24.14)