NAR Professional Standards Procedures
Interboard Arbitration Procedures
Interboard Arbitration

Interboard arbitration may be invoked when parties are members of two different
Boards and neither party holds membership in the same Board (or participates in the
same MLS). However, the complainant should be advised that should he voluntarily
agree to travel to the Board having jurisdiction over the respondent and submit to
arbitration conducted by that Board, that Board shall provide arbitration as requested
subject to the provisions of the Code of Ethics and Arbitration Manual.

An interboard arbitration can be conducted:
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
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through a multi-Board or regionalized facility pursuant to an advance written
agreement between two or more Boards
by a Hearing Panel of the State Association's Professional Standards Committee
on an "ad hoc" basis between two or more Boards
Authority

The authority of Member Boards to conduct arbitration is established in Article 17 of
the Code of Ethics, and in Article IV, Sections 1 and 2, of the Bylaws of the National
Association.
Selecting an Appropriate Forum

Absent an interboard or cooperative agreement suggesting otherwise, when parties
hold membership in the Board or participate in the same MLS, that Board is
generally the appropriate one to conduct the arbitration. In some instances, parties
each hold membership in several Boards. If all of the parties hold membership in
the same two (or more) Boards, then the location of the property giving rise to the
dispute determines which Board will conduct the arbitration, unless the parties
voluntarily agree to have the matter arbitrated before another Board in which they
both hold membership [Professional Standards Policy Statement #10].

When a complainant is a REALTOR® who does not hold membership in the
respondent's Board or participate in the same MLS as the respondent, the
respondent's Board may be the appropriate forum if the Board finds the matter
subject to mandatory arbitration and the complainant agrees to participate in and
abide by the Board's final determination of the matter. Absent these circumstances,
such a matter is generally resolved through interboard arbitration.
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NAR Professional Standards Procedures
Multi-Board or Regional Procedures

Part Fourteen of the Code of Ethics and Arbitration Manual establishes the State
Association's authority to conduct arbitration when the parties are not members of
the same Board. However, most State Associations give deference to written
agreements between Boards that establish multi-Board or regionalized professional
standards enforcement procedures.

If the complainant and respondent hold membership in Boards that are signatories to
a multi-Board or regionalized Code of Ethics enforcement agreement, then
"interboard" arbitration is conducted through this facility.
Arbitration Before the State Association of REALTORS®

State Associations are defined by the NAR Constitution as "Member Boards." As
such, they share the responsibility for enforcing the Code of Ethics, including the
conduct of arbitration hearings.

When arbitrable issues exist between members of different Boards and neither
Board is capable of conducting arbitration and, when there is no multi-Board or
regional agreement between these Boards, the matter may be referred to the State
Association for resolution by its own Professional Standards Committee
[Professional Standards Policy Statement #18].

The State Association has a right to review the matter through its Grievance
Committee (if it has one) to determine whether an arbitrable issue exists and, if so,
whether arbitration is mandatory or voluntary. If there is no State Association
Grievance Committee, this function may be performed by a panel of members of the
State Association's Professional Standards Committee. However, such individuals
cannot serve on any subsequent Hearing Panel or appellate body involving the
same matter.

An arbitration hearing is conducted by a Hearing Panel drawn from the State
Association's Professional Standards Committee.

Arbitration hearing procedures should be based on the those set forth in the Code of
Ethics and Arbitration Manual, but should be adapted to meet the requirements of
state law and any special geographic considerations. For example, some State
Associations choose to establish panels and conduct hearings on a district-wide
basis throughout the state.
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NAR Professional Standards Procedures

The Board of Directors of a State Association serves the same role as the Board of
Directors of a local Board. The appellate functions of a State Association's Board of
Directors may be delegated to another body such as the Association's Professional
Standards Committee, Executive Committee, or a panel of Directors appointed by
the President to act on behalf of the Association.

Example: When a request for a limited procedural review is initiated after an
arbitration hearing, rather than have the matter considered by the entire Board of
Directors of the State Association, this responsibility could be delegated (according
to the state's procedures for the conduct of an arbitration hearing) to members of the
State Association's Professional Standards Committee who did not serve on the
Hearing Panel. Alternatively, the Executive Committee or a panel of Directors
appointed by the President could serve in this capacity.

Any procedure established by the State Association should be clearly understood by
all parties prior to the commencement of any proceeding.
"Interboard" Arbitration in the Absence of a Prior Agreement Between Boards

If an agreement between Boards does not exist, arbitration involving members of
different Boards can take place pursuant to procedures developed and agreed to by
Boards in which the parties hold membership.

If there is no advance agreement between Boards, each Board has the right, acting
through its Grievance Committee, to review the arbitration request and to determine
(1) if an arbitrable matter exists and (2) if so, whether the matter is subject to
mandatory or voluntary arbitration.

If either Board determines that a matter is not arbitrable, that determination can be
appealed to the Board of Directors of the Board that made the determination. If the
Board of Directors concurs that the matter is not arbitrable, the process is
concluded, the parties are released from their obligation to arbitrate, and the parties
are free to seek any other remedy, including litigation, that may be available to them.
In the absence of a written interboard arbitration agreement, before any hearing can
take place, both Boards of REALTORS® must independently conclude (1) that a
question is arbitrable, and (2) whether arbitration is mandatory or voluntary.

When both Boards' Grievance Committees determine that a matter is arbitrable and
subject to mandatory arbitration, or when both Boards determine that a matter is
subject to voluntary arbitration and the parties agree to participate, the Boards must
agree on the procedures for conducting the arbitration. For example, if Boards have
different professional standards procedures, they may agree to follow either Board's
arbitration hearing procedures to conduct the interboard arbitration.
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NAR Professional Standards Procedures

This type of arbitration often involves members of Boards in the same vicinity. As a
result, the cost of conducting the arbitration should be comparable to the costs
incurred by a single Board when conducting such an arbitration hearing. However,
under certain circumstances, arbitration may require extensive travel and other
expenses. Such expenses usually are borne by the respective Boards or by the
parties. If it is intended that the parties be responsible for these expenses, such
intent should be made clear in advance of the hearing.

Copies of an award rendered through interboard arbitration should be made
available to the complainant and the respondent.

Any request for limited procedural review should be considered by a special "Review
Panel" comprised of an equal number of Directors from each Board. The Directors
are selected by the Board President. If the non-prevailing party fails to abide by the
terms and conditions of the award, the award recipient's Board should encourage
the recipient to have the award judicially enforced. The Board may also join in the
litigation seeking to enforce the award.
Summary

Arbitration can take place even when the parties do not hold membership in the
same Board of REALTORS®.

If a complainant is a REALTOR®, but not a member of the respondent's Board, the
respondent's Board may retain sole jurisdiction if the Board finds the matter subject
to arbitration and the complainant agrees to be bound by the decision.

A written, advance agreement between Boards that establishes a multi-Board or
regional professional standards enforcement facility may also be used to resolve
arbitration requests.

In the absence of a multi-Board or regional enforcement facility, "interboard"
arbitration (arbitration involving members of different Boards) can take place within a
forum provided by the State Association's Professional Standards Committee.

In the absence of a multi-Board or regional procedure, arbitration can be conducted
on an "ad hoc" basis pursuant to procedures agreed to by the Boards where the
respective parties hold membership.

Any procedures followed to provide "interboard" arbitration should ensure that the
parties receive full due process.
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