Year in Review

59 claims were filed on the NAR Insurance Program in 2022, with a stunning 40% of claims arising from employment practices. As we begin a new year, set aside time to brush up on best practices and current trends to get out in front of potential employment claims.

Here are some great places to start:

IN THE SPOTLIGHT: Governance and Board Leadership

As many associations welcome new board members at the turn of the year, now is a good time to review and remind the association directors about their fiduciary duties, association policies (e.g., antitrust compliance, anti-harassment, and conflict of interest), board procedures, and the basics of good sense governance. An excellent way to prepare board members for their role is providing annual orientation which covers matters such as a director’s role in overseeing the association’s operations, the business judgment rule, and their fiduciary duties to the organization. 

As a reminder, coverage under the NAR Insurance Program is dependent on the association or MLS adopting all mandatory NAR policies, as well as adhering to the association’s bylaws and policies. This means the association and its board must act in accordance with the association’s governing documents and applicable state and local laws. Examples of such actions include: 

  • Providing adequate notice. Taking action at an improperly called board meeting, such as failing to provide proper notice or acting without a quorum, can be invalidated by a court if the action is challenged.
  • Acting in the best interests of the association and its members. The board of directors are required to avoid and disclose any conflicts of interest. 
  • Acting with a duty of care. The board is required to act with reasonable diligence and prudence which means staying engaged, being informed and relying on professionals.

Take steps now to empower and enable the board to protect the interests of your association and its members, make good and informed decisions, and avoid liability claims. Check out NAR’s Board of Directors Orientation Toolkit for customizable presentations. 

Best Practices For Productive Board Meetings

  • Follow the procedures set forth in your bylaws and policies and comply with all legal requirements when conducting board meetings.
  • At the beginning of each board meeting review and remind the board about policies such as antitrust compliance and conflicts of interest.
  • Set and follow an agenda for all meetings, take accurate, concise minutes and consider asking counsel to review the minutes before finalizing.
  • Engage a parliamentarian to ensure association board meetings are conducted properly and efficiently, especially when significant business will be decided.
  • Provide annual anti-harassment and diversity, equity and inclusion training for board members.
  • Establish roles and expectations of association leaders and professional staff to ensure efficient and effective management of the organization.
  • Know your state’s weapon laws, and consider adding a weapon policy to association policies. Post signs at all building entrances that weapons are not allowed in the building.
  • If any individual threatens violence against an employee, a director or officer, or another member, contact local law enforcement and local legal counsel for guidance.
  • Consider disciplining or terminating members or employees who threaten violence, in accordance with the association’s bylaws and policies.  

Finding Your Roots

Does your association have a milestone anniversary coming up? The archivists in the NAR Library and Archives can assemble an association history to help you, your board, your members and your community learn more about your association’s history and its impact on the community. Contact Heather McGowan, NAR Archivist and Digital Preservation Librarian, to get started. 


NAR Resources

Good Sense Governance Webinar
March 12, 2021

Learn what you can do to protect your association from challenges to board decisions, address member concerns, and hopefully stay out of court.

Good Sense Governance

Governance resources and "best practices" designed to assist associations in implementing bylaws, policies, and procedures.

NAR Member Code of Conduct
January 28, 2019

NAR General Counsel Katie Johnson reviews the NAR Member Code of Conduct and Anti-Harassment Policy.

Fiduciary Duty

As a Director, you are required to act in the best interests of NAR, rather than in the interests of yourself or another person or entity.

Book Collection: Leadership and Board Service

Quarterly Risk Report Q4 2022 Ebooks Leadership & Board Service

The NAR Library & Archives has compiled a collection of eBooks about leadership, building successful boards, and non-profit board service to help you expand your knowledge and excel in these areas. Share this valuable collection with your board members and reminder them that they have access to these books, and many more.

To access these eBooks and the entire NAR library collection, log in to NAR’s eBooks site using your NAR Member ID. Be sure to select “National Association of REALTORS®” as your primary library in the drop-down menu on the sign-in page. 


How can an association that allows flexibility in its employees’ remote work remain compliant with employment laws?

It’s important to be intentional about remote work and plan how to address compliance obligations before they arise. Employers should have a remote work policy in place and communicate that to employees. For instance, an employer can choose where it will allow remote work, require an employee to tell the employer where they’re going, and restrict an employee from working somewhere until the company is ready. 

Then, have a plan to address labor and employment obligations in the state(s) where employees are authorized to work. Requirements vary by state for unemployment insurance, workers’ compensation, overtime exemptions, wage payment rules, mandatory training, paid leave and taxes. Remember, the employer is liable for compliance with each state’s requirements.  

This employment practices tip, and dozens more, are available to you on the EPL AssistTM website. Be sure to take advantage of this valuable benefit, which provides policy templates, sample documents, risk management resources, and advice and counsel on common employment law issues facing associations.

Coverage Corner

Addressing Common Policy Questions

Q: Does the policy cover board members when they make a decision, even a bad decision, about association governance? 
A: Yes, with a caveat. If the board acts with knowledge that it violates the law, or is fraudulent, criminal, malicious then coverage would be revoked upon adjudication of such conduct.

Have coverage questions? Check out these Professional Liability Policy FAQs

Risk Management Webinar Series

Risk Management Webinar Series

The Risk Management Webinar Series is a quarterly series for REALTOR® AEs & legal counsel; enhance skills while reducing risk for common claim types.