Sharpen Your Governance IQ

NAR answers your questions on policy, bylaws, and procedures.

Q. I'm not sure what should be in my bylaws and what should be in policy. What is the difference between bylaws and policies?

An association's bylaws are a legal document. They are a set of basic operating rules adopted and maintained by an association to define and direct its internal structure, serve as a guide in conducting meetings, and enable the association to function and fulfill its mission. An association's bylaws should contain only what is required by state law and NAR policy. State law may require provisions on purpose, directors (number, election, term, qualifications, and removal), meetings (how often the directors will meet, special meetings, notice, and quorum), ­officers (titles, elections, terms, removal), and dissolution. It is important to review your state laws to verify that all provisions comply and that all components required by state law are included. NAR policy requires local association bylaws to contain provisions on membership, the Code of Ethics professional standards and training, the REALTOR® trademark, state and national membership, and dues. 

Association policies, on the other hand, supplement the bylaws and are the operational guidelines for an association. The purpose of policies is to guide and protect the board of directors and the staff in fulfilling the mission of the association and allowing for consistent transaction of association business. Policies generally include financial guidelines such as budgeting; dues collection; financial information disclosure; travel; reserve levels; payment; compliance reporting; compensation; revenue recognition; asset capitalization; financial reporting; document retention and investing; board of directors policies including harassment, conflict of interest, social media, and fiduciary duties; and employment policies. Association policies must never conflict with the bylaws, as the bylaws take precedence.

Q. A neighboring association is offering continuing education classes for free to its members but charging members who do not hold primary or secondary membership. Is this consistent with NAR policy? 

Yes, this is consistent with the universal access to services component of the Board of Choice policy. Local and state associations determine what benefits to offer their members. Offering services for free or a reduced cost to members to compete for members with other associations is consistent with NAR policies. The universal access to services component of the Board of Choice policy requires only that REALTORS® be entitled to purchase services from boards other than their primary board without the necessity of holding membership in those boards. The fees charged for services to REALTORS® who do not hold membership locally are set by the individual association. 

Q. What does "all REALTOR® association" mean? 

"An all REALTOR® association" is an association of REALTORS® that provides brokers and agents with only one class of active membership: REALTOR®. In other words, it does not offer a REALTOR Associate® class of membership for agents. Although some associations still have REALTOR Associate® members— a class of membership available to agents and salespersons affiliated with a REALTOR®—most associations are "All REALTOR® associations." 

Being an "All REALTOR® association" does not mean your association can require all agents affiliated with a Designated REALTOR® to join your association. If an agent chooses not to hold REALTOR® membership, their Designated REALTOR®'s dues are increased to reflect a nonmember assessment. The Designated REALTOR® could then adopt a company policy that requires everyone affiliated with him or her to join NAR. 

Agents who choose not to hold REALTOR® membership can still practice real estate with the Designated REALTOR®, but they cannot call themselves a REALTOR® or use the REALTOR® marks. The nonmember agent can still access MLSs if their Designated REALTOR® is an MLS participant. Additionally, the Designated REALTOR® is liable under the NAR Code of Ethics for all actions of the nonmember. Therefore, if a nonmember affiliated with a Designated REALTOR® refuses to cooperate in violation of Article 3 of the Code of Ethics, for example, the Designated REALTOR® could be disciplined for the agent's actions. 

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