NAR Professional Standards Procedures
Multi- Board and Regional
Grievance and Professional Standards Committee
Background

Each Member Board is obligated to enforce the Code of Ethics among its
membership [NAR's Bylaws, Article IV, Sections 1 and 2]. Member Boards with a
limited number of members sometimes have difficulty providing impartial Hearing
Panels for ethics and arbitration hearings.

Professional Standards Policy Statement #40 provides:
To ensure fair, impartial and knowledgeable enforcement of the Code of
Ethics (including arbitration) there must be adequately large groups of
knowledgeable, trained REALTORS® and REALTOR-ASSOCIATE®s from
which the necessary committees and tribunals can be appointed. To this
end, Boards and Associations are encouraged to immediately begin
efforts to enter into cooperative enforcement agreements to ensure
Boards and/or Associations have an aggregate total of at least two
hundred (200) "primary" REALTOR® and/or REALTOR-ASSOCIATE®
members from which to compose hearing panels. It is recommended but
not required that representation/participation in any multi-board regional
cooperative enforcement agreement be on a pro-rata basis. These
standards shall become mandatory effective January 1, 1997. Effective
January 1, 2001 the minimum aggregate number of primary members is
two hundred seventy-five (275); and effective January 1, 2002 the
minimum aggregate number of primary members is three hundred fifty
(350). This requirement will not apply in instances where, in the opinion of
the state association, unique geographical considerations (e.g., islands,
remote, locale, etc.), logistical difficulties or other impediments make
participation prohibitive. Effective January 1, 2001 all Boards regardless
of size (except Commercial Overlay Boards) must participate with at least
one other Board (which may be the state association) in a cooperative
enforcement agreement.
Note: It is important to understand that the "aggregate total of at least 350 primary
REALTOR® and REALTOR-ASSOCIATE® members" refers to the total number of
"primary" REALTOR® and REALTOR- ASSOCIATE® members of the Board or
Boards, not to the number of members available to participate directly in Code
enforcement activities. In other words, if a Board has 175 primary members, it will
need to enter into an agreement with another Board with at least 175 primary
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NAR Professional Standards Procedures
members of its own (or with two other Boards, one with at least 88 primary members
and the other with at least 87 primary members, and so on) or into an agreement with
the state association so that the aggregate (or total) population of primary members
is at least 350. Again, this does not mean that all 350 of these REALTORS® must be
involved in enforcement activities.
Alternatives (The models described below do not exclude other approaches)
Limited Regionalization - Under this approach, two or more boards retain their
respective Grievance Committees to receive and review ethics complaints and
arbitration requests. Similarly, requests for procedural review (arbitration) and
appeals (ethics) would be considered by the Board of Directors (or a panel thereof) of
the Board that had received and initially processed the complaint or arbitration
request. Only the Professional Standards Committees of the Boards would be
consolidated so that hearing panelists would be drawn from an expanded "pool".
Comprehensive Regionalization - Similar to limited regionalization except that
Grievance Committees and Boards of Directors are consolidated for Code
enforcement activities. Thus, if three Boards were party to a comprehensive
regionalization agreement, they would have only one Grievance Committee and one
Professional Standards Committee among them. For obvious reasons, each Board
would retain its own Board of Directors but Directors would be "pooled", and panels
drawn from the "pool", when engaged in Code enforcement activities other than
imposition of discipline. [See Form #E-19 and #A-19, in the Code of Ethics and
Arbitration Manual for an example of this model]
Regionalization with State Association involvement - If available, Boards may
enter into agreements with their state association of REALTORS® under which the
local Board retains primary responsibility for providing hearing panelists but the state
association agrees to augment these efforts by providing members of the state
association's Professional Standards Committee to serve on hearing panels on an
"as needed" basis.
(Note: Regionalization efforts of the types described above may appropriately
include Boards in different states.)
State-wide Regionalization - Under this approach, ethics complaints and arbitration
requests are initially received and reviewed by the state association's Grievance
Committee; hearings are conducted by panels of the state association's Professional
Standards Committee; and appeals and requests for procedural review are
considered by the state association's Board of Directors. Where appropriate, these
committees may be divided into regions within the state to carry out their
enforcement responsibilities.
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NAR Professional Standards Procedures
Reciprocal enforcement agreements - Under this approach, two or more Boards
agree to "exchange" enforcement responsibilities. For example, a complaint filed
against a member of Board A would be reviewed by the Grievance Committee of
Board B; the hearing would be conducted by a hearing panel of Board B's
Professional Standards Committee; and any appeal or request for procedural review
would be conducted by the Board of Directors of Board B. Imposition of discipline
would remain that of Board A's Board of Directors. Reciprocal agreements may be
between Boards in different states.
While state associations are not required to enter into agreements to support and
assist local boards in their Code enforcement efforts, the National Association's
Professional Standards Committee strongly encourages their active involvement in
these efforts.
Purpose of a Multi-Board or Regional Grievance Committee and Professional
Standards Committee

The purposes for establishing multi-Board or Regional Grievance Committees and
Professional Standards Committees are:
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to ensure that all members receive essential due process in the conduct of ethics
hearings and arbitration hearings
to utilize the most capable and experienced individuals possible in the conduct of
such hearings
to avoid unnecessary delay and expense that might result if such complaints are
referred to the State Association for hearing
to ensure that individuals who serve on a Grievance Committee and on Hearing
Panels are familiar with local customs and practices
to preserve a local Board's autonomy and identity, yet maximize the benefits of
membership
The Need for Multi-Board Agreements

By applying for and maintaining membership in a local Board, each REALTOR® and
REALTOR-ASSOCIATE® of that Board pledges to abide by the Code of Ethics and
to submit to the jurisdiction of that Board. This includes the agreement to be bound
by the Code enforcement procedures of that Board and to submit to arbitration under
the procedures of that Board.

Generally, REALTORS® are not obligated to participate in ethics or arbitration
hearings conducted by Member Boards of which they do not hold membership
(unless they participate in a Board's MLS). However, by virtue of an inter-Board
agreement, the responsibility for conducting grievance procedures and ethics and
arbitration hearings can be shared by two or more Boards.
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NAR Professional Standards Procedures

Similarly, by written agreement, the members of two or more Boards can be bound
by the Code enforcement procedures adopted by those Boards. Such an agreement
is in the best interest of the Member Boards and their membership, because it
maximizes the opportunities to ensure procedural due process and impartiality.

Any agreement between two or more Boards should contain provisions related to the
following.

Authority - An agreement should clearly set forth the identity of the participating
Boards. It should state that the authority for establishing a multi-Board
Grievance Committee and a Professional Standards Committee is provided for in
the agreement.

Geographical area - A section describing the jurisdiction of each participating
Board should be included. This section should also indicate that all of the
REALTOR® and REALTOR-ASSOCIATE® Members holding membership in
each signatory Board are bound by this agreement.
Purpose - The purpose of the agreement is to create a multi-Board Grievance
Committee and a multi-Board Professional Standards Committee and, if deemed
appropriate, to provide for one or more mediation officers to provide mediation as
an alternative, preliminary step to arbitration.
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Tribunals - A section concerning tribunals should clearly indicate how Hearing
Panels for the conduct of ethics and arbitration hearings are selected.
Additionally, it indicates how many members serve on the multi-Board Grievance
Committee and how they are selected.
Operations

A regional or multi-Board agreement should be in writing, and should describe the
exact intent of all participating Boards.

An agreement should contain a provision for Member Boards to withdraw from the
agreement at any time, with advance notice to the other Boards. A Sample Format
Agreement is provided as Specimen Form #A-19 and #E-19 in the Code of Ethics
and Arbitration Manual.

An agreement should indicate that the procedures to be followed are set forth in the
Code of Ethics and Arbitration Manual of the National Association, which is
amended, as necessary, to meet the needs of the multi-Board Grievance Committee
and the Professional Standards Committee, and to conform with the requirements of
state law. Any amendments to the procedures set forth in the Code of Ethics and
Arbitration Manual should be reviewed by legal counsel to ensure that they are
consistent with state law and do not substantively vary from the policies and
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NAR Professional Standards Procedures
procedures in the Code of Ethics and Arbitration Manual. Any matters of "local
Board option" should be considered and agreed on in advance.

Appeals of the Grievance Committee's dismissal of an ethics complaint or arbitration
request (or challenges to the classification of arbitration requests) are typically heard
by those members of the Grievance Committee who did not serve on the original
tribunal.

An adequate appeal remedy for ethics determinations rendered by the multi-Board
or regional Professional Standards Committee should also be included. This is
usually an appeal to members of the multi-Board Professional Standards Committee
who do not participate in an initial ethics hearing.

An agreement should also provide that there is no appeal of an arbitration award.
However, a party may request a review concerning allegations that procedural due
process has not been provided. In such a case, consideration of the alleged denial
of due process is considered by members of the multi-Board Professional Standards
Committee who did not participate in the arbitration hearing.

When unethical conduct is determined by an Ethics Hearing Panel of the multi-Board
Professional Standards Committee, and a recommendation for discipline is made,
the respondent's Board is notified and implementation of the recommended
discipline is made by the Board of Directors of the Board where the respondent
holds membership (unless otherwise agreed by the Board's signatory to the
agreement).

Arbitration awards rendered by the multi-Board Professional Standards Committee
are provided to each of the parties' respective Boards for informational purposes.

Failure to satisfy an award rendered in arbitration should be treated in the same
manner as it would be by any local Board (i.e., award recipient should be
encouraged to seek judicial enforcement of the award).

An agreement should also stipulate a procedure that addresses a refusal to
arbitrate.
Rights Retained by Participating Boards

Each Board reserves all of the authority, rights, and privileges assigned to it by the
National Association, except those that have been voluntarily modified as a result of
the cooperative agreement. Any modification in the rights or privileges of the Board
should be clearly established in the written agreement between the Boards.

Each Board expressly reserves the right to withdraw from a multi-Board agreement
by providing advance notice to all of the other participating Boards within 90 days (or
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NAR Professional Standards Procedures
less, if agreed) of the date of withdrawal. An agreement should provide for such
withdrawals.
Summary

Boards with limited numbers of Members may have difficulty providing impartial
Hearing Panels for ethics and arbitration hearings.

Rather than ignore the needs of Board Members and the obligations imposed by the
National Association's Constitution and Bylaws to enforce the Code of Ethics,
Boards have the option of joining together to maximize human and financial
resources. Boards that have less than 200 primary REALTOR® and/or
REALTOR/ASSOCIATE® members from which to compose hearing panels must
enter into a cooperative Code of Ethics agreement. By establishing a multi-Board or
Regional Grievance Committee and Professional Standards Committee, members
are assured that they will receive:
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equitable peer review
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consideration by members familiar with local practices and customs
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minimization of travel costs that would result if the hearing were conducted by the
State Association
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the assurance of due process through procedures developed by the National
Association
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