May 3, 2012
The following has NOT been approved by the Professional Standards Committee, Executive Committee or the Board of Directors.
On May 5, 2011, the C.A.R. Professional Standards Committee recommended, and the Board of Directors subsequently approved, the following motion:
That C.A.R. advocate a position to NAR that NAR expand it’s policy, so that a suspension or expulsion that is imposed by a local A.O.R. for violation of the Code of Ethics shall be mandatorily reported to the state association to be reviewed by a panel of state directors, and possibly imposed on a state-wide basis.
The NAR Professional Standards Committee will be considering a motion to approve C.A.R.’s position, at NAR’s mid-year meeting, on, Thursday, May 17, 2012.
Issue:
Whether C.A.R. should adopt implementation of a pilot program so that a suspension or expulsion that is imposed by a local A.O.R. for violation of the Code of Ethics shall be reported to the state association to be reviewed by a panel of state directors, and possibly upheld on a state-wide basis, with authority being given to staff to draft all documents and take all steps necessary for implementation, pending approval of the program by NAR.
Options:
Approve adoption of a procedure for implementation of a pilot program so that a suspension or expulsion that is imposed by a local A.O.R. for violation of the Code of Ethics shall be reported to the state association to be reviewed by a panel of state directors, and possibly imposed on a state-wide basis, with authority being given to staff to draft all documents and take all steps necessary for implementation, subject to final approval by NAR.
Do not approve adoption of a procedure for implementation of a pilot program so that a suspension or expulsion that is imposed by a local A.O.R. for violation of the Code of Ethics shall be reported to the state association to be reviewed by a panel of state directors, and possibly imposed on a state-wide basis, with authority being given to staff to draft all documents and take all steps necessary for implementation, subject to final approval by NAR.
Background:
In February 2010, the C.A.R. directors approved the Professional Standards Committee recommendation that C.A.R. advocate a position to NAR that NAR expand its policy, so that a suspension or expulsion that is imposed by one A.O.R. for violation of the Code of Ethics may be permissively imposed by all other A.O.R.s where the REALTOR® concurrently holds membership.
C.A.R. sent a letter to NAR, advocating C.A.R.’s position, prior to NAR’s Rules & Interpretations Subcommittee meeting in March 2010. To date, Subcommittee has made no recommendation on the issue to the NAR Professional Standards Committee. Among the concerns voiced by some is the worry that local associations may end up having inconsistent results.
One way to dispel that concern is to have the state association determine whether the suspension or expulsion, imposed by a local association, should be imposed as to all local associations in the state. This procedure would not disturb the decision made at the local level; C.A.R. would simply determine whether that decision should be implemented throughout the state.
Under NAR policy, a local association shall disseminate a finding that a respondent has violated the Code of Ethics to any other association where the respondent holds membership. All REALTOR® members of local associations in the state of California are also members of C.A.R. Therefore, having a local association provide C.A.R. with notice that a REALTOR® has been suspended or terminated after a hearing at the local level, would not be contrary to NAR policy.
If C.A.R. is notified of a local suspension or termination, C.A.R. can appoint a panel of three (3) state directors to review the findings of the local association, to consider arguments of the respondent against statewide implementation, and to decide whether the suspension or termination should be implemented on a statewide level. Suspending or terminating the respondent’s C.A.R. membership automatically cuts off all California local memberships. At the end of the suspension or termination, C.A.R. could turn the respondent’s membership back on, which would also activate their local memberships.
NAR’s Consideration of C.A.R. Proposal:
In September 2011, the NAR Rules and Interpretations Subcommittee suggested that the leadership of the Professional Standards Committee and the leadership of the Membership Policy and Board Jurisdiction Committee be asked to appoint a joint work group of the two committees to consider the issue. At the 2011 NAR Annual Convention, both committees concurred in the concept of a joint work group being appointed. The joint work group met in Chicago on February 3, 2012.
The relevant Recommendation of the work group follows:
Recommendation:
That the California Association of REALTORS ® (“CAR”) be authorized to conduct a pilot “lateral discipline” program with voluntary participation by CAR member associations to be concluded by December 31, 2014, with comprehensive results, conclusions and recommendations being reported to NAR’s Professional Standards Committee and Membership Policy and Board Jurisdiction Committee at that time. The scope of the pilot program is to be limited to violations of the REALTORS® Code of Ethics resulting in suspension and termination of membership.
The California pilot would allow statewide imposition of suspensions or expulsions after a hearing is held before a panel of its directors, in conjunction with C.A.R. counsel, to determine whether to impose the same discipline (suspension or expulsion for the same period of time) on the respondent state-wide. The decision made by the directors at such a hearing does not disturb the findings or recommended discipline of the local Association who initially imposed the discipline but only determines whether or not there is a state-wide imposition of the same discipline. A decision to impose the suspension or expulsion shall be disseminated to Associations in the state.
The Subcommittee has adopted the recommendations of the work group, and the appropriate motions will be presented to the NAR Professional Standards Committee at their mid-year meeting, in Washington DC.
Conclusion:
The question is whether a member, who has had their membership benefits cut-off by one A.O.R., should continue to be a REALTOR® member in another A.O.R. Having the suspensions and terminations reported to C.A.R. and having a panel of C.A.R. directors make the decision eliminates any concern about inconsistent local results. Furthermore, should the panel of C.A.R. directors decide to impose the suspension or expulsion, the state can cut off REALTOR® membership at all California REALTOR® associations simultaneously. The NAR Professional Standards Committee will consider a motion, at their mid-year meeting, to allow C.A.R. to implement a pilot program for the above-described process.
