Issues Briefing Paper -Professional Standards Committee

October 11, 2007

The following is for study only and has  NOT been approved by the Professional Standards Committee, Executive Committee or the Board of Directors.Background:In October 2005, the Business Practices Task Force recommended that the Professional Standards Committee adopt procedures to expedite ethics hearings and to “put the teeth” into the ethics process.At the January 2006 Professional Standards Committee meeting, a number of proposed changes to the ethics rules were approved in concept.  At that meeting, a Work Group was drafted to work on a step-by-step implementation proposal, to be presented to the full Committee, for comment, at its June 2006 meeting.The following is a list of nine proposals to be discussed by the Work Group during their first meeting:

1. Citation system (fines and ethics school concept);
2. Ethics Advocate;
Mediation before ethics hearing;
3. Circuit Court;
4. Venue for Disciplinary Complaints;
5. Subcommittee of Grievance Committee investigates all anonymouscomplaints;
6. Rent-a-Judge to hear cases all over state;
7. Ethics hotline (similar to state bar); and
8. Failure to file arbitration w/n 180 days.

At the June 2006 meeting, adetailed Implementation Guideline for the nine proposals, along with eighteen model documents to be used in implementation by the local associations were presented to the Committee.  The Committee members were asked to review the Implementation Guidelines and model documents and submit their comments, by no later than July 30, 2006.  Those comments received were considered by the Professional Standards Work Group on Implementation of Business Practices Task Force Recommendations, and three proposals were recommended to and adopted by the Committee at the October 2006 Committee meeting.  The Work Group considered the remaining proposals at their January, June and October 2007 meetings.Discussion:The Work Group, at their meeting in October 2007, made the following decision:

1. To make recommendations on only one of the nine proposals, in October; and

The proposal that the Work Group is recommending atthis time is:    1.    Citation system (fines and ethics training concept).Citation System (fines and ethics training concept).·        AOR may, at the option of the Board of Directors, adopt a citation policy.·        A model schedule of citable offenses for violation of the NAR Code of Ethics will bepublished by C.A.R., with the exact offenses and amount of the fines to be determined by each individual AOR.·        When a complaint is received by AOR it is channeled through one of two possible reviewing bodies: anonymous complaint goes to Anonymous Subcommittee and complaint with identified complainant goes to Grievance Committee.·        The reviewing body will determine whether complaint is subject to citation, full due process hearing or dismissal.·        REALTORS® receiving citations may elect to pay citation, attend ethics training or may request a full due process hearing.·        Model Rules and final implementation documents to be drafted by Staff.·        This policy must be approved by NAR.Issue: Whether C.A.R. should adopt a Citation System, subject to approval by NAR, to establish citations for violations of the NAR Code of Ethics, such Citation System to be adopted by a local AOR at the option of its Board of Directors.

Options:   Approve C.A.R.’s adoption of a Citation System, subject to approval byNAR, to establish citations for violations of the NAR Code of Ethics, such Citation System to be adopted by a local AOR at the option of its Board of Directors.Do not approve C.A.R.’s adoption of  a Citation System.