NAR Professional Standards Procedures
Ethics Hearing Procedures
Process

The Code of Ethics contains both Articles and Standards of Practice that support
each Article. However, an ethics hearing may not be held if only Standards of
Practice are alleged to have been violated; discipline may be imposed only if a
violation of an Article(s) is alleged and determined.

While REALTORS® are encouraged to follow the ideals of the Code in all of their
activities, disciplinary action may be taken only for real estate-related activities and
transactions involving a REALTOR® [Professional Standards Policy Statement #29].

A violation of the Code of Ethics is an offense against both the Board and
membership.
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The purposes for holding an ethics hearing are:
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to vindicate the Code
to educate the member
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Because an ethics hearing may result in the imposition of discipline or the denial of
particular membership rights and/or privileges, it is necessary for procedural due
process to be provided at every step [Professional Standards Training Guide, Code
of Ethics and Arbitration Manual].

A hearing panel of the Professional Standards Committee is not a court of law. It is
not charged with the responsibility of enforcing state or federal law, and cannot
determine violations or enforcement of the law [Professional Standards Training
Guide, Code of Ethics and Arbitration Manual].

Ethics complaints must be filed within one hundred eighty (180) days after the facts
constituting the matter complained of could have been known in the exercise of
reasonable diligence.
If the Board’s informal dispute resolution processes (e.g., ombudsman, mediation,
etc.) are invoked or initiated by a complainant (or potential complainant) with respect
to conduct that becomes the subject of a subsequent ethics complaint, the one
hundred eighty (180) day filing deadline shall be suspended beginning with the date
of the complainant’s (or potential complainant’s) request for informal dispute
resolution service or assistance and shall resume when the informal dispute
resolution procedures are concluded or terminated.
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NAR Professional Standards Procedures
Ethics Hearing Procedure

When determining if an ethics hearing should proceed, ask the following questions.
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Is there pending criminal litigation related to the same facts?
Is there pending civil litigation related to the same facts?
Is there a hearing pending before a state or federal regulatory or administrative
agency that is related to the same facts?

If there is pending criminal litigation related to the same facts, the ethics hearing
should not proceed until after the litigation has been concluded [Section 13(e), Code
of Ethics and Arbitration Manual].

If pending civil litigation or a hearing pending before a regulatory or administrative
agency related to the same facts giving rise to an ethics hearing exist, the complaint
may, at the discretion of the Grievance Committee or on appeal and at the direction
of the Board of Directors, proceed to a hearing before an Ethics Hearing Panel.

Board legal counsel should be consulted and five factors should be considered
before a decision to proceed with an ethics hearing is made. These factors are:
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degree of similarity between pending litigation and ethics complaint
degree to which resolution of litigation or other proceeding may affect the
necessity to process ethics complaints
length of time that keeping the ethics hearing "on hold" would delay the final
disposition of complaint
nature of alleged violation and the extent that it would affect cooperation with
other Board Members
assurance that consideration of the ethics complaint at this time would not
deprive the respondent of right to due process
Rights of Parties

There must be an impartial, unbiased Hearing Panel comprised of at least three
(preferably five) members. Any Hearing Panel should have an odd number of
members [Section 21(c), Code of Ethics and Arbitration Manual].

Members are automatically disqualified from serving on a Hearing Panel (or Board of
Directors on appeal) for the following reasons:
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only one person connected with any firm, partnership, or corporation may serve
on a Hearing Panel
a member is related by blood or marriage to the complainant, respondent, or
REALTOR® acting as counsel for either party
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a member is an employer, partner, or employee of the complainant, the
respondent, or a REALTOR® acting as counsel for either party
a member is party to the hearing
a member is party to or a witness for any other pending case involving the
complainant or respondent

Any individual who served on the Grievance Committee that originally reviewed a
complaint may not serve on any subsequent Ethics Hearing Panel or participate in
an appeal to the Board of Directors [Section 1(s), Code of Ethics and Arbitration
Manual].

Both the complainant and the respondent have the right to challenge the
qualifications of Hearing Panel Members for cause -- that is, the parties may state
any factor that, in their minds, would prevent a panel member from rendering an
impartial, unbiased, and knowledgeable decision. Challenges for cause are ruled on
by the Professional Standards Committee Chair. If the Committee Chair is
challenged, the Vice Chair rules. If both are challenged, the Board President rules
[Section 21(f), Code of Ethics and Arbitration Manual].

If the complainant or the respondent in an ethics complaint is a REALTOR® (nonprincipal) or a REALTOR-ASSOCIATE®, then at least one member of the Hearing
Panel must be a REALTOR® (non-principal) or a REALTOR-ASSOCIATE® [Section
21(c), Code of Ethics and Arbitration Manual].
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All parties have the right to be notified about the time and place of the hearing in
advance (in accordance with the Board's procedures) [Part Six, Code of Ethics and
Arbitration Manual].
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Each party has a right to be present and to present relevant evidence and testimony.
(The Hearing Panel Chair rules on the admissibility of evidence and testimony.)
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Each party has a right to cross-examine witnesses called by the other side.
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Each party has a right to make an opening and a closing statement.

After an ethics complaint reaches a Hearing Panel (after the Grievance Committee
has determined that a hearing should be held), it may be withdrawn by the
complainant, but only with the Hearing Panel's approval. If a complaint is withdrawn
after it has reached the Hearing Panel, then no determination has been reached on
the merits of the complaint.
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NAR Professional Standards Procedures

The complaint and response, if any, shall be provided to Hearing Panel members
prior to the hearing. Such time period shall be
(as determined by the
Board of Directors) and shall be adhered to for all hearings [Section 21(c), Code of
Ethics and Arbitration Manual].
Amended Complaints

Prior to a hearing, the complainant may file an amended complaint. The respondent
has the right to be notified, to receive a copy of the amended complaint, and to file
an amended response [Section 21(f), Code of Ethics and Arbitration Manual].

A Hearing Panel may, at its discretion, disallow an amended complaint.

During a hearing, a complaint may be amended by the complainant or the Hearing
Panel to add previously uncited Articles and/or additional respondents.
Amendments to include Articles previously dismissed by the Grievance Committee
may be made only upon motion of the Hearing Panel. If the respondent agrees, the
hearing may continue with the record reflecting that the respondent has waived the
right to an adjournment. If the respondent requests a continuance, the hearing is
continued to a date not less than 15 nor more than 30 days later.

If a hearing is adjourned to a later date, the amended complaint must be in writing
and signed by either the complainant (if the complainant made the amendment ) or
by the Chair of the Hearing Panel (if the complaint was amended by the Hearing
Panel). In either event, the amended complaint is served upon the respondent, who
then has an opportunity to prepare an amended response.

If a hearing panel amends an ethics complaint, the respondent is given the choice of
proceeding be for the same panel (either without interruption or when reconvened)
or have the complaint considered in a new hearing be for a new hearing panel.

To prevent the appearance of bias, at no time during or after an ethics hearing may
the Hearing Panel or any appellate body refer concerns regarding potentially
unethical conduct to the Grievance Committee.
Failure of Complainant (Member of Public) to Appear

If a complaint scheduled for a hearing is from a member of the public who refuses or
is unable to attend the hearing, the complaint is referred back to the Grievance
Committee. If the Grievance Committee determines that there is sufficient
information for a Hearing Panel to consider (i.e., there is clear, strong, and
convincing evidence), the complaint is amended to name the Grievance Committee
as complainant, and the hearing is continued to a new date. In such cases, the
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respondent is provided with a copy of the amended complaint [Section 21(f), Code of
Ethics and Arbitration Manual].
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If a Grievance Committee determines that there is insufficient information for a
Hearing Panel to consider, the complaint is dismissed.
Failure of Complainant (Member) to Appear

In the event that a complaint scheduled for hearing is from a REALTOR® or
REALTOR-ASSOCIATE® of a Board who refuses or is unable to attend the hearing,
the complainant shall be advised that the refusal to participate I the hearing without
a satisfactory reason may result in a charge that the complainant has violated Article
14’s obligation to place all pertinent facts before an appropriate tribunal of the Board.

REALTOR® or REALTOR-ASSOCIATE® complainant continues to refuse a duly
noticed request to appear, or if the complainant is excused from appearing for
reasons deemed valid by the Hearing Panel, the hearing shall not take place.
Rather, the complaint shall be referred back to the Grievance Committee. If the
Grievance Committee determines that there is sufficient information for a Hearing
Panel to consider (i.e., there is clear, strong, and convincing evidence), the
complaint shall be amended to name the Grievance Committee as complainant, and
the hearing shall be continued to a new date. In such a case, the respondent shall
be provided with a copy of the amended complaint [Section 21(f), Code of Ethics
and Arbitration Manual].
Respondent's Failure to Appear at the Hearing
If a respondent fails to appear at a hearing without obtaining a continuance, the Hearing
Panel may proceed in the respondent's absence and make its decision based upon all
available evidence. However, the Hearing Panel Chair should make every reasonable
effort to determine the whereabouts of the respondent [Section 21(g), Code of Ethics
and Arbitration Manual].
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If it appears that a respondent has been unavoidably delayed or detained, serious
consideration should be given to rescheduling the hearing to a future date that is
convenient for all parties.
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An ethics hearing may be postponed based on extenuating circumstances.
Generally, requests for postponement are made in writing and are granted at the
discretion of the Chair [Part Five, Code of Ethics and Arbitration Manual].
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NAR Professional Standards Procedures
Recording the Hearing

The Board must and any party may, at its own expense, have a court reporter
present or arrange to tape record the proceeding. If the Board tape records the
proceeding, it may preclude parties from recording the hearing. If the Board uses a
court reporter in lieu of recording the proceeding, the parties may not be prohibited
from making their own tape recordings. The Board's recording is considered the
official record of the proceeding. If a party has the tape transcribed, then that party
must provide a transcript to the Board, at no cost [Section 6, Code of Ethics and
Arbitration Manual].
Witnesses
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All parties have the right to call witnesses. Any party wishing to call witnesses must
provide the Board and the other party with a list of names at least 15 days prior to
the hearing. Failure to provide this information constitutes a waiver of the right to
call those witnesses at the hearing, unless the other party agrees to allow their
testimony. If all the names of witnesses have not been provided, as required, and if
the Hearing Panel believes the testimony is essential, testimony may be permitted
provided the other party has the right to a continuance.
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The testimony of all parties and their witnesses should be sworn or affirmed.
Witnesses do not have the right to be present, except when giving testimony or
being cross-examined [Section 5, Code of Ethics and Arbitration Manual; exception,
Section 13, Code of Ethics and Arbitration Manual].
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Panel members may question parties and their witnesses at any time during the
proceedings. However, the Hearing Panel Chair may rule that certain questions are
irrelevant or argumentative.
Right to Use Legal Counsel
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All parties have the right to have legal counsel present at any hearing. However, if a
party does not give notice of the intent to have counsel present (in accordance with
the Board's procedures), and if the Hearing Panel determines that the rights of any
other party require representation by legal counsel, the hearing may be rescheduled
[Section 4, Code of Ethics and Arbitration Manual].
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Parties may also be "represented" by a REALTOR® who is not an attorney at law.
That REALTOR® acting as counsel should be careful not to engage in the
unauthorized practice of law. [Section 4, Code of Ethics and Arbitration Manual].
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NAR Professional Standards Procedures

No party may refuse to directly respond to a request for information or to questions
from panel members, except on the grounds of self-incrimination. The Hearing
Panel is not obligated to accept the statements of a party's attorney as being the
statements of the actual party [Part Five, Code of Ethics and Arbitration Manual].
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All parties are personally accountable for the conduct of their attorney. The
respective parties and their attorneys determine how active a role the attorneys play.
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If an attorney attempts to harass, intimidate, coerce, or confuse panel members or
any of the other parties, the Hearing Panel Chair may order that attorney to leave.
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If an attorney is dismissed from the hearing for any reason, the hearing should be
postponed to a specific date not less than 15 or more than 30 days later so that the
party may obtain substitute counsel if so desired.
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Every party is responsible for the expenses of their legal counsel and any expert
witnesses called.
Executive Session

After each party makes a closing statement, the Hearing Panel goes into executive
session to render a decision. If Board legal counsel and/or staff was present at the
hearing, it is at the discretion of the Hearing Panel whether counsel and/or staff will
remain for the executive session.

The standard of proof that must be met in an ethics hearing is: "Clear, strong, and
convincing." In other words, for the respondent to be found in violation, the evidence
presented must clearly, strongly, and convincingly demonstrate that the conduct
alleged in the complaint did take place and breaches one or more Articles of the
Code of Ethics.
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The Hearing Panel's decision must be in writing, must have findings of fact, must
have conclusions regarding unethical conduct, and should contain the Hearing
Panel's recommendation for discipline, if any [Section 22(a), Code of Ethics and
Arbitration Manual] Note: A sample "Findings of Fact and Conclusions" form is
included in the Professional Standards Training Guide, Code of Ethics and
Arbitration Manual.
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The decision of the Ethics Hearing Panel must be signed by all Hearing Panel
members or by a majority of them.
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Any member of the Hearing Panel not concurring with the decision may write a
dissenting opinion.
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NAR Professional Standards Procedures
Discipline

If a respondent is found in violation, the Hearing Panel may, at its discretion, review
the member's record of previous violations and discipline imposed when determining
what to recommend for discipline.
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Any discipline recommended by the Hearing Panel must be authorized in the
Board's professional standards procedures and may not exceed the forms of
discipline provided for in Section 14, Nature of Discipline, Code of Ethics and
Arbitration Manual, NATIONAL ASSOCIATION OF REALTORS®.
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Discipline has two purposes: to educate and to punish.
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Discipline cannot be used as a "lever" to coerce some other action. For example, a
Board cannot say, "You're suspended until you replace the hot water heater."
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Any discipline imposed must be reasonable. The punishment should fit the offense.
Mitigating circumstances and past violations (if any) should be considered.

Final ethics decisions holding REALTORS® in violation of the Code of Ethics must
be forwarded to the state real estate licensing authority in instances where there is
reason to believe that the public trust may have been violated. The “public trust,” as
used in this context, refers to demonstrated misappropriation of client or customer
funds or property, willful discrimination, or fraud resulting in substantial economic
harm.
Discipline That May be Imposed (Singly or Combined)
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Discipline that may be imposed for a violation of an Article of the Code of Ethics,
includes [Section 14, Code of Ethics and Arbitration Manual ]:
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letter of warning [Section 23(j), Code of Ethics and Arbitration Manual ]
letter of reprimand
requirement to attend the ethics portion of the Board's indoctrination course or
another appropriate course or seminar specified by the Hearing Panel that
respondent could reasonably attend taking into consideration cost, location, and
duration
fine not to exceed $5,000 (regardless of number of Articles violated)
probation for one year or less
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NAR Professional Standards Procedures
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suspension from Board membership for not less than 30 days, or more than one
year (decision should be written clearly articulating all intended consequences,
including denial of MLS participatory or access privileges). Additionally, the
Board of Directors has the option to allow the respondent to pay a fine (not in
excess of $5,000) in lieu of suspension. However, this option may be exercised
only once during any given three-year period with respect to a particular member,
and may not be offered as an option if the conduct giving rise to the suspension
is failure to arbitrate.
expulsion from Board membership for a period of one to three years (decision
should be written clearly articulating all intended consequences, including denial
of MLS participatory or access privileges).
suspension or termination of MLS rights and privileges may also be utilized.
Suspension of MLS services may be no less than thirty (30) days nor more than
one (1) year; termination of MLS services shall be for a stated period of one (1)
to three (3) years.
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Finally, REALTORS® who participate in the MLS or otherwise access MLS
information through a Board or Association in which they do not hold membership
are subject to the Code of Ethics in that Board or Association on the same terms and
conditions as the Board members. Discipline may be the same as but shall not
exceed the discipline that may be imposed on members. Boards entering into
regional or reciprocal MLS agreements are encouraged to include provisions
requiring signatory Boards to respect, to the extent feasible, decisions rendered by
other Boards involving suspension or expulsion from membership or from MLS.
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The Hearing Panel's decision and recommendation for discipline (if any) is provided
to the parties and the parties are advised of their rights to request a rehearing and/or
appeal. The Hearing Panel's decision is not provided to the Board of Directors until
the time specified in the Board's procedures to request a rehearing and an appeal
have lapsed [Specimen Form #E-11, Code of Ethics and Arbitration Manual].
Note: See Appendix VII to Part Four for recommended sanctioning guidelines.
An administrative processing fee not to exceed $500 may be assessed against
respondents found in violation of the Code of Ethics or other membership duties which
may be in addition to, and not part of, any sanction that may be imposed. Boards and
Associations are encouraged to determine in advance when, and under what
circumstances, administrative processing fees will be imposed so that imposition is a
matter of administrative routine.
As an administrative routine, boards may also follow optional procedures to permit
publication of the names of Code of Ethics violators after a second violation occurs
within a three (3) year period. [Section 23(n), Code of Ethics and Arbitration Manual]
Enforcement of the Code of Ethics also prohibits Member Boards from knowingly
granting REALTOR® or REALTOR-ASSOCIATE® memberships to any applicant who
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NAR Professional Standards Procedures
have an unfulfilled sanction pending which was imposed by another Board or
Association of REALTORS® for violation of the Code of Ethics.
Joinder of REALTOR® Principal

A local Board may not require the automatic joinder of the REALTOR® principal in
all ethics complaints against a non-principal REALTOR® or REALTORASSOCIATE®.
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However, the REALTOR® principal may still be named in such complaints by action
of the complainant, the Grievance Committee, or the Hearing Panel prior to the
hearing. If the complaint is amended during the hearing, the provisions for
amending a complaint apply Policy Statement II and the REALTOR® principal has
the right to have the hearing reheard by the same Panel, or may waive this right.
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If the REALTOR® principal is not named as a co-respondent in a complaint against
another broker or sales associate in the firm, the REALTOR® principal still:
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has the right to be present at the hearing or may be required by the Hearing
Panel to attend the hearing
may consult with or testify on behalf of the respondent in the hearing, if
requested by the respondent
receives copies of the complaint and response, notice of the hearing, and may be
called on by the parties or the Hearing Panel as a witness
receives copies of the Hearing Panel's findings of fact, conclusions, and any
recommendation for discipline
receives copies of requests for rehearing or appeal and notices of such
proceedings, has the right to be present at the hearing, and receives a copy of
the final action by the Directors
These rights accrue to both the former REALTOR® principal and the current
REALTOR® principal, if the respondent non-principal REALTOR® or REALTORASSOCIATE® changes firm affiliation either before or after a complaint is filed, but
before the Hearing Panel reaches a decision.
Resignation or Termination of Membership While Ethics Complaint Is Pending
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If the respondent in an ethics complaint resigns or otherwise causes membership to
terminate after a complaint is filed, but before final action is taken by the Board of
Directors, the hearing process suspends and the Board secretary (or executive
officer) forwards the complaint to any other Board in which the respondent holds
membership.
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
If the respondent does not currently hold membership in another Board, or if the
secretary (or executive officer) is unable to determine if such membership is held,
the complaint is held in abeyance until such time as the respondent rejoins the
Board, or it can be determined that the respondent holds membership in another
Board.
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In any instance when a complaint is transferred to another Board, the complainant is
notified [Section 20(e), Code of Ethics and Arbitration Manual].
Note: There are expedited ethics administrative procedures which may be adopted by
local Boards [Section 20, (f) - (q), Code 0of Ethics and Arbitration Manual].
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