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									                                                 Minutes

                                  Professional Standards Committee
                            2007 Midyear Legislative Meetings & Trade Expo
                                       Thursday, May 17, 2007
                                         1:00 p.m. - 5:30 p.m.
                                   Regency Ballroom, Lower Level
                                        Omni Shoreham Hotel
                                          Washington, D.C.

ACTIONS REQUIRING BOARD OF DIRECTORS APPROVAL

   Standard of Practice related to Article 12 dealing with use and display of designations, certifications
    and other credentials.
   Amendments to Sections 42(c) and 45(a) and (d), Code of Ethics and Arbitration Manual

ACTIONS NOT REQUIRING BOARD OF DIRECTORS APPROVAL

   Amendments to Sections 15, 18, 38 and 41, Code of Ethics and Arbitration Manual
   Amendments to Sample Forms #A-1 and #E-12
   Amendments to Section 42 (c), Code of Ethics and Arbitration Manual

FUTURE AGENDA ITEMS

   Article 12
   Standards of Conduct for REALTOR Associations and the Unacceptable Business Practices
   State Association–imposed ethics training requirements

Call to Order

The joint meeting of the Professional Standards Forum and Professional Standards Committee was called
to order at 1:00 p.m. by Committee Chair Judie McConville.

Professional Standards Forum

The Professional Standards Form was conducted by Forum Chair David Godden and Vice Chair Wally
Folks.

Virginia Association of REALTORS President Melanie Thompson and CEO R. Scott Brunner presented
an overview of VAR’s “The Code is Good Business” ethics education program.

A panel composed of Hank Lerner, Director of Member & Legal Services for the Pennsylvania
Association of REALTORS ; Stacie Davis, Director of Member Services for the Washington
Association of REALTORS ; Mary Grant, Executive Officer for the Billings Association of
REALTORS (MT): and Robert Sadler, Chief Administrator Officer, REALTOR Association of Greater
Miami and the Beaches, discussed their experiences in establishing and operating DRS programs.

Approval of minutes of the 2006 REALTORS Conference & Expo meeting

The minutes of the November 11, 2006 meeting were approved as written.
Professional Standards Committee                                                                    Minutes
May 17, 2007                                                                                         Page 2



REALTORS Commercial Alliance – Commercial Membership Recruitment Work Group update

REALTOR Joel Criz updated the Committee on the Work Group’s progress. A summary of his remarks
is attached as Appendix A to these minutes.

Old Business

CCIM Institute proposal for a new Standard of Practice prohibiting REALTORS from
misrepresenting their status as members or designees of NAR’s Institutes, Societies or Councils

It was moved, seconded and carried:

Motion:

That a new Standard of Practice related to Article 12 be adopted reading as follows:

        The obligation to present a true picture in advertising, marketing and representations
        allows REALTORS to use and display only professional designations, certifications and
        other credentials to which they are legitimately entitled.

(NOTE: This recommendation was subsequently approved at the May 19, 2007 meeting of the Board of
Directors.)

Internet-related issues – interim report of the Interpretations and Procedures Subcommittee

Interpretations and Procedures Subcommittee Chair Sharon Steel reported that as part of the Professional
Standard Committee’s ongoing consideration of Internet–related issues, the Interpretations and
Procedures Subcommittee gave further consideration to the Report and Recommendations of the Joint
Work Group of the Interpretations and Procedures Subcommittee and the Multiple Listing Issues and
Policies Committee (December 11-12, 2005).

It was consensus of the Subcommittee:

       That a new case interpretation related to Article 12 illustrating the new Standard of Practice 12-10
        prohibiting use of deceptive metatags, key words and other devices to direct/drive Internet traffic
        to REALTORS’ websites should be developed for consideration at the September, 2007
        meeting.
       That the question of whether Professional Standards policy or MLS Policy (or both) prohibiting
        REALTORS/MLS Participants from creating the mistaken impression in minds of consumers
        that they have direct, unlimited “MLS access” should be discussed further so that possible action
        recommendations can be developed for consideration by the Professional Standards Committee.
       That the Risk Management Committee should be asked to develop sample broker/agent
        agreements spelling out agent responsibilities for their websites, including key ethical obligations.
       That NAR staff work with NAR trade show vendors and affinity partners to make them aware of
        the Code of Ethics and REALTORS obligation to adhere to it.
       That consideration be given to a new Standard of Practice related to Article 12 holding that
        ownership of “someone else’s URL” is unethical where actual use by the current owner would be
        deceptive, and
Professional Standards Committee                                                                     Minutes
May 17, 2007                                                                                          Page 3


       That the Committee and Subcommittee continue to consider how best to use various media (e.g.
        blogs, NAR’s on-line magazines, REALTOR.org, etc.) to educate REALTORS about the Code
        of Ethics.

In considering the new Standards of Practice related to Article 12 that were adopted in 2006, Chairman
Steele noted that the question was asked whether Article 12, as currently worded, is broad enough to
address all forms of REALTORS’ communications (including all communications made electronically),
or whether the existing phrase “advertising and representations to the public” is understood by
REALTORS as applying only to their advertising and marketing activities? It was the consensus of the
Subcommittee that Article 12, as currently worded, may be viewed as relating primarily to advertising
and marketing activities, and that broader, more encompassing ethical direction guiding all forms of
REALTORS’ communication may be desirable. The Subcommittee focused on concepts it felt should
be articulated in the Code, whether in Article 12, or possibly in a new Article. It was felt the fundamental
message to be communicated to both REALTORS and to the public should be “REALTORS shall be
honest and truthful in all real estate communications. To the extent practical, their status as real estate
professionals shall be readily apparent in such communications.”

The Subcommittee initially concluded this principle might most effectively be communicated in a
separate new Article. With that as a starting premise, the discussion turned to the wording of the
proposed new Article; to possible amendments to Article 12; to which existing Standards of Practice
related to Article 12 should continue to be “tied” to Article 12, and how those Standards of Practice might
be clarified; and which concepts established in the existing Standards of Practice related to Article 12
might be recast (and possibly amended) as Standards of Practice related to the proposed new Article.

After reviewing their initial proposed actions the Subcommittee subsequently determined that
REALTORS, the public, and the Code of Ethics might be better served by clarifying and expanding the
scope of existing Article 12, rather than creating a separate, new Article. It was then moved, seconded
and carried that action on the following proposed amendments to Article 12 be delayed until the
September, 2007 meeting so that the substance of these discussions could be shared with the Professional
Standards Committee at the 2007 Midyear meeting, and so that the Committee’s input can be
incorporated into the Subcommittee’s final recommendations (underscoring indicates additions, strikeouts
indicate deletions):

        REALTORS shall be careful at all times to present a true picture in their advertising
        and representations to the public. REALTORS shall also ensure that their professional
        status (e.g., broker, appraiser, property manager, etc.) or status as REALTORS is
        clearly identifiable in any such advertising. (Amended 1/93)

        REALTORS shall be honest and truthful in their real estate communications and shall
        present a true picture in their advertising, marketing and other representations. To the
        extent practical, their status as real estate professionals shall be readily apparent in their
        communications and clearly identifiable in their advertising.

The Chair concluded her report by noting that the following issues were also discussed, but not acted on
by the Subcommittee, and may be addressed in later recommendations from the Subcommittee. These
were presented so members of the Professional Standards Committee could provide input and guidance to
the Subcommittee:

       A definition of “communications”
Professional Standards Committee                                                                Minutes
May 17, 2007                                                                                     Page 4


      REALTORS making anonymous comments on other REALTORS’ blogs
      REALTORS’ responsibility for monitoring/editing their own blogs
      REALTORS responsibility for blogs run by licensees affiliated with them
      Disclosure of time lag (hours or days) in posting comments to blogs. Must the fact that a blog is
       not run in “live time” be disclosed?
      Posting unfavorable/unflattering (but truthful) comments to blogs

Any input Committee members would like to provide can be shared via the staff.

Grievance Committee meetings

It was moved, seconded and carried:

Motion:

That Sections 15, 18, 38 and 41 of the Code of Ethics and Arbitration Manual be amended as follows
(underscoring indicates additions):

       Section 15. Selection and Appointment of the Grievance Committee

       There will be a standing committee, known as the Grievance Committee, of at least
       ________________ Board Members, in good standing, of whom at least a majority shall
       be REALTORS . The members of the committee shall be appointed by the President,
       subject to confirmation by the Board of Directors, for staggered three (3) year terms.
       The committee shall annually select its own Chairperson and Vice Chairperson (or,
       alternatively, the President shall annually designate the Chairperson and Vice
       Chairperson of the committee). The Grievance Committee will hold regularly-scheduled
       meetings or, alternatively, will meet often enough to ensure timely review of ethics
       complaints and arbitration requests.

       In selecting members of the Grievance Committee, the President should consider the
       following recommended criteria:

             number of years as a REALTOR
             number of years in the real estate business
             primary and secondary fields of real estate endeavor/ expertise
              participation in post-licensing real estate education
             training in the Code of Ethics position in firm (principal, nonprincipal)
             size of firm
             common sense
             open-mindedness
             familiarity with state(s) law and regulations
             receptiveness to instruction/training
             other relevant professional or procedural training

       The committee should have balanced representation of REALTORS , REALTOR-
       ASSOCIATEs, men, and women, and should include representatives of various racial
       and ethnic groups. Committee members should be mature, experienced, knowledgeable
Professional Standards Committee                                                                   Minutes
May 17, 2007                                                                                        Page 5


       persons of a judicial temperament. It is suggested that, to the extent practical, members
       of the Grievance Committee not serve simultaneously on the Professional Standards
       Committee or on the Board of Directors to avoid conflict with the prohibition on serving
       on more than one (1) tribunal in the same matter. (Revised 11/96)

       Section 18. Function

       The function of the Grievance Committee is clearly distinguishable from the function of
       the Professional Standards Committee. The Professional Standards Committee is similar
       to a court. The court adjudicates matters that come before it. The Professional Standards
       Committee makes decisions on matters involving ethics or arbitration.

       If the function of the Professional Standards Committee is understood as similar to a
       court, the function of the Grievance Committee can then be understood as similar to that
       of the grand jury. A grand jury evaluates potentially criminal conduct to determine
       whether the evidence and testimony presented warrants indictment and trial.

       In a similar manner, the Grievance Committee receives ethics complaints and arbitration
       requests to determine if, taken as true on their face, a hearing is to be warranted. The
       Grievance Committee makes only such preliminary evaluation as is necessary to make
       these decisions. While the Grievance Committee has meetings, it does not hold hearings,
       and it does not decide whether members have violated the Code of Ethics. The Grievance
       Committee does not mediate or arbitrate business disputes. Grievance Committees are
       encouraged to hold regularly-scheduled meetings. Meetings should be called often
       enough to ensure timely review of ethics complaints and arbitration requests.

       In evaluating ethics complaints, the Grievance Committee may require a written response
       from the respondent(s). In such instances the respondent(s) should be provided with a
       copy of the ethics complaint and advised that failure to respond may be the basis for a
       charge of having violated Article 14 of the Code of Ethics. (See Form #E-4, Grievance
       Committee Request for Information [Ethics Complaint] and Form #E-5, Response to
       Grievance Committee Request for Information, Part Six of this Manual). In evaluating
       arbitration requests, the Grievance Committee may request a written response to the
       arbitration request from the respondent(s). (See Form #A-5, Grievance Committee
       Request for Information [Arbitration Request] and Form #A-6, Response to Grievance
       Committee Request for Information, Part Thirteen of this Manual.) If no response is filed
       within the time allotted, the Grievance Committee shall make its determination as to
       whether an arbitration hearing should be scheduled based upon the information set forth
       in the arbitration request.

       Section 38. Selection and Appointment of the Grievance Committee

       There will be a standing committee, known as the Grievance Committee, of at least ____
       Board Members, in good standing, of whom at least a majority shall be REALTORS .
       The members of the committee shall be appointed by the President, subject to
       confirmation by the Board of Directors, for staggered three (3) year terms. The
       committee shall annually select its own Chairperson and Vice Chairperson (or,
       alternatively, the President shall annually designate the Chairperson and Vice
       Chairperson of the committee). The Grievance Committee will hold regularly-scheduled
Professional Standards Committee                                                                   Minutes
May 17, 2007                                                                                        Page 6


       meetings or, alternatively, will meet often enough to ensure timely review of ethics
       complaints and arbitration requests.

       In selecting members of the Grievance Committee, the President should consider the
       following recommended criteria:

              number of years as a REALTOR
              number of years in the real estate business
              primary and secondary fields of real estate endeavor/ expertise
              participation in post-licensing real estate education
              training in the Code of Ethics
              position in firm (principal, nonprincipal)
              size of firm
              common sense
              open-mindedness
              familiarity with state(s) laws and regulations
              receptiveness to instruction/training
              other relevant professional or procedural training

       The committee should have balanced representation of REALTORS , REALTOR-
       ASSOCIATEs, men, and women, and should include representatives of various racial
       and ethnic groups. Committee members should be mature, experienced, knowledgeable
       persons of a judicial temperament. It is suggested that, to the extent practical, members
       of the Grievance Committee not serve simultaneously on the Professional Standards
       Committee or on the Board of Directors to avoid conflict with the prohibition on serving
       on more than one (1) tribunal in the same matter. (Revised 11/96)

       Section 41. Function

       The function of the Grievance Committee is clearly distinguishable from the function of
       the Professional Standards Committee. The Professional Standards Committee is similar
       to a court. The court adjudicates matters that come before it. The Professional
       Standards Committee makes decisions on matters involving ethics or arbitration.

       If the function of the Professional Standards Committee is understood as similar to a
       court, the function of the Grievance Committee can then be understood as similar to that
       of the grand jury. A grand jury evaluates potentially criminal conduct to determine
       whether the evidence and testimony presented warrants indictment and trial.

       In a similar manner, the Grievance Committee receives ethics complaints and arbitration
       requests to determine if, taken as true on their face, a hearing is to be warranted. The
       Grievance Committee makes only such preliminary evaluation as is necessary to make
       these decisions. While the Grievance Committee has meetings, it does not hold hearings,
       and it does not decide whether members have violated the Code of Ethics. The Grievance
       Committee does not mediate or arbitrate business disputes. Grievance Committees are
       encouraged to hold regularly-scheduled meetings. Meetings should be called often
       enough to ensure timely review of ethics complaints and arbitration requests.
Professional Standards Committee                                                                     Minutes
May 17, 2007                                                                                          Page 7


       In evaluating ethics complaints, the Grievance Committee may require a written response
       from the respondent(s). In such instances the respondent(s) should be provided with a
       copy of the ethics complaint and advised that failure to respond may be the basis for a
       charge of having violated Article 14 of the Code of Ethics. (See Form #E-4, Grievance
       Committee Request for Information [Ethics Complaint] and Form #E-5, Response to
       Grievance Committee Request for Information, Part Six of this Manual). In evaluating
       arbitration requests, the Grievance Committee may request a written response to the
       arbitration request from the respondent(s). (See Form #A-5, Grievance Committee
       Request for Information [Arbitration Request] and Form #A-6, Response to Grievance
       Committee Request for Information, Part Thirteen of this Manual.) If no response is filed
       within the time allotted, the Grievance Committee shall make its determination as to
       whether an arbitration hearing should be scheduled based upon the information set forth
       in the arbitration request.

Sample Form #A-1, Request and Agreement to Arbitrate

It was moved, seconded and carried:

Motion:

That the proposed amendments to Sample Form #A-1 be approved as shown in Appendix B.

Sample Form #E-12 – Action of the Board of Directors (Ethics Hearing)

It was moved, seconded and carried:

Motion:

That the proposed amendments to Sample Form #E-12 be approved as shown in Appendix C.

Appealing dismissed arbitration requests , Section 42 (c), Code of Ethics and Arbitration Manual

It was moved, seconded and carried:

Motion:

That Section 42 (c), Grievance Committee’s Review and Analysis of a Request for Arbitration and
Section 45 (a) and (d), Board’s Right to Decline Arbitration be amended as follows (underscoring
indicates additions, strikeouts indicate deletions):

       Section 42. Grievance Committee’s Review and Analysis of a Request for Arbitration

       C. Appeals from the decision of the Grievance Committee related to a request for
           arbitration

       If the Grievance Committee determines that a matter should not be arbitrated by the
       Board (because of the amount involved or the legal complexity, or for any other valid
       reason specified in the Grievance Committee decision and written report), either of the
       parties the reason(s) for dismissing the request will be stated in the notice of dismissal.
       Any party may appeal the decision to the Board of Directors within twenty (20) days of
Professional Standards Committee                                                                 Minutes
May 17, 2007                                                                                      Page 8


       the date of notice of the committee decision using Form #A-20, Appeal of Grievance
       Committee Dismissal or Classification of Arbitration Request.; however, no additional
       information may be added or attached to the form. The request for arbitration and any
       attachments cannot be revised, modified or supplemented. The party appealing the
       dismissal may, however, explain in writing why they disagree with the Grievance
       Committee’s conclusion that the request for arbitration should be dismissed. The
       Hearing Panel can also dismiss the arbitration request if the Hearing Panel concludes
       the matter is not arbitrable. (Amended 5/97)

       Only those The materials which were presented to the Grievance Committee when the
       Grievance Committee made its decision will be presented to the Board of Directors and
       considered with the appeal., together with any party’s rationale challenging the
       Grievance Committee’s dismissal. The parties to the arbitration (complainant and
       respondent) do not have the right to appear at the appeal hearing before the Directors. In
       the event a request for arbitration is dismissed, any deposit submitted by the complainant
       shall be returned to the complainant. (Revised 11/91)

       Section 45. Board’s Right to Decline Arbitration

       (a) If either the Grievance Committee or the arbitration panel selected in the manner
           hereinafter provided determine that because of the amount involved or the legal
           complexity of the dispute the dispute should not be arbitrated, the arbitration shall
           automatically terminate unless either of the parties to the dispute appeals the
           decision to terminate the proceedings to the Board of Directors in writing within
           twenty (20) days of the date of notice that the Grievance Committee or the arbitration
           panel declined to continue the proceeding using Form #A-20, Appeal of Grievance
           Committee Dismissal or Classification of Arbitration Request.; however, no
           additional information may be added or attached to the form. The request for
           arbitration and any attachments cannot be revised, modified or supplemented. The
           party appealing the dismissal may, however, explain in writing why they disagree
           with the Grievance Committee’s conclusion that the request for arbitration should be
           dismissed. The Hearing Panel can also dismiss the arbitration request if the Hearing
           Panel concludes the matter is not arbitrable. The written appeal and those materials
           and information which were available to the Grievance Committee or the arbitration
           Hearing Panel when the decision to discontinue arbitration was made will be
           presented to the Directors and considered with the appeal. The complainant and
           respondent do not have the right to appear at the hearing before the Directors. In the
           event of such an appeal, the Grievance Committee or the arbitration panel shall
           report its conclusions in writing to the Directors and, if the Directors concur, the
           arbitration shall terminate and the parties shall be relieved of their obligation to
           arbitrate. In this event, or in the case of no appeal, any deposits made by the parties
           shall be returned to them. However, if the Board of Directors decides that the
           arbitration should proceed, the matter shall be remanded to the Grievance
           Committee or the arbitration panel for further proceedings. (Revised 5/97)

       (d) If either party to an arbitration request believes that the Grievance Committee has
           incorrectly classified the issue presented by the request (“mandatory” or
           “voluntary” arbitration situation), the party has twenty (20) days from the date of
           receipt of the Grievance Committee’s decision to file a written appeal of the
           Grievance Committee’s determination using Form #A-20, Appeal of Grievance
Professional Standards Committee                                                                  Minutes
May 17, 2007                                                                                       Page 9


            Committee Dismissal or Classification of Arbitration Request.; however, no
            additional information may be added or attached to the form. Only those The
            materials and information which were available to the Grievance Committee when
            the Committee made its determination will be presented to the Directors and
            considered with the appeal., together with any party’s rationale challenging the
            Grievance Committee’s classification of the request. The complainant and
            respondent do not have the right to appear at the hearing before the Directors. In the
            event of such an appeal, the Grievance Committee must report its written conclusions
            to the Board of Directors. If the Directors determine that the arbitration request was
            incorrectly classified, they shall reclassify the request as either “mandatory” or
            “voluntary” arbitration and refer it to the Secretary for appropriate processing.
            (Revised 5/97)

(NOTE: This recommendation was subsequently approved at the May 19, 2007 meeting of the Board of
Directors.)

Quadrennial Ethics Training requirement – Arkansas REALTORS Association’s proposal

It was the consensus of the Committee that the Arkansas REALTORS Association’s proposal to change
NAR’s ethics training cycle from every four (4) years to every two (2) years should be referred to the
Interpretations and Procedure Subcommittee, and that the Subcommittee be asked to consider the
possibility of authorizing state associations to impose ethics training obligations on member that exceed
those established in Article IV, Section 1 or in Official Interpretation 37 of Article 1, Section 2 of the
NAR Bylaws.

Standards of Conduct for REALTOR Associations and Unacceptable Business Practices – AEC
Work Group Update

It was moved, seconded and carried:

Motion:

That the recommendations of the Association Executives Committee related to the Standards of Conduct
and Unacceptable Business Practices be supported. (Note: The Association Executives Committee report
and recommendations is attached as Appendix D to these minutes.

Adjournment

There being no further business to come before the Committee, the meeting was adjourned at on
Thursday, May 17, 2007.



Judie McConville, Chair
Professional Standards Committee
National Association of REALTORS
Professional Standards Committee          Minutes
May 17, 2007                              Page 10




Cliff Niersbach                    Date
Staff Executive
Professional Standards Committee                                                     Minutes
May 17, 2007                                                                         Page 11


                                     Attendance Roster

                              Professional Standards Committee
                        2007 Midyear Legislative Meetings & Trade Expo
                                   Thursday, May 17, 2007
                                     1:00 p.m. - 5:30 p.m.
                               Regency Ballroom, Lower Level
                                    Omni Shoreham Hotel
                                      Washington, D.C.



Members Present:

Chris Allen                    Sheryl Grider                    Sue Moore
Jim Amdahl                     John Griess                      Raymond Morris
Jim Asbury                     Doug Hamilton                    Sallye Nordling
Bruce Aydt                     Kaye Hirt Eggleston              Bill Overacre
Dana Bauguss                   Steve Hoover                     Linda Page
Sheila Bell                    Harold Huggins                   Ann Palmateer
Pat Bentley                    Robert Hunt                      Pat Parks
Sandra Blandzinski             Michael Indest                   Jeanette Perez Matta
John Bolduc                    Thomas Johnson                   Larry Perreault
Paul Burns                     Charlotte Jones                  Sam Rader
Dominic Cardone                Judith Kalbrener                 Randy Raynolds
Jane Caskey                    Ted Kelly                        Chris Read
Stephen Casper                 Kevin King                       Patrick Reilly
Patricia Connors               Nancye Kirk                      Linda Rheinberger
Jim Costello                   Brad Knapp                       Debra Rogers
Karen Crowson                  Marc Lebowitz                    Marcie Roggow
John Danyliw                   Darlene Little                   Steve Rosco
Diane Disbrow                  Ted Loring                       Nancy Rothwell Simpers
Sandy Eherenman                Bill Lublin                      Duane Sauke
JP Endres                      Donald MacPherson                Victoria Shuman
Marie Flaherty                 Susanna Madden                   Bonnie Sparks Gray
Wally Folks                    Lynn Madison                     Sharon Steele
Merilynn Foss                  Donald Martin                    Sonja Stevens
Duane Fouts                    Dale Mattison                    Via Surmelis
Gail Fusco                     Judie McConville                 Stephanie Walker
Rosemary Galloway              Tammy McCullar                   Hilea Walker
David Godden                   Monika McGillicuddy              Dale Zahn
Jeri Gray                      Fred Meyer
Professional Standards Committee                                                        Minutes
May 17, 2007                                                                            Page 12



Members Absent:

Nina Amadon                                 Margaret Malherbe   Carolyn Raines-Harbin
Gregory Connors                             Carol Mangan        Edwin Resuello
Debbie Fairfax                              Marty Martinez      Frank Rock
Patricia Feore                              Julie McManaman     Rosemary Sauter
Errol Greene                                Fred Meyer          Harrison Tyson
Donald Harlan                               Anne Miller         Karen Valentine
Elaine Hoff                                 Stan Mullin         Perry Weekes
David Koch                                  Donald Plourde      Robert Weir




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                                                                                        Appendix A


                      2007 REALTORS® LEGISLATIVE MEETINGS & EXPO

                                                     WASHINGTON, DC

      COLMMERCIAL MEMBERSHIP RECRUITMENT FORMAL WORK GROUP

                           TALKING POINTS FOR COMMITTEE UPDATES

Work Group Update:

    The Commercial Membership Recruitment Work Group was created in May 2006 to make
     recommendations on how to attract more commercial members to NAR. The Work Group is
     comprised of representatives from the RCA Committee, Association Executives Committee,
     Professional Standards Committee, and Membership Policy and Board Jurisdiction
     Committee. The formal Work Group was formed at the recommendation of the 2005 RCA
     Committee REALTOR® Recruitment Work Group, which was charged with developing a
     compelling “value proposition” for commercial real estate practitioners, as well as
     identifying obstacles to membership.

    The Work Group held two meetings in Chicago last summer at which it examined the
     differences between the needs of commercial and residential real estate practitioners, and the
     challenges local boards face in trying to recruit commercial members. The level of
     commercial broker membership in NAR varies greatly from market to market and is
     dependent on multiple factors.

    The Work Group agreed that commercial real estate firms operate more independently than
     residential firms. There is little cooperation among commercial brokers and most do not
     participate in an MLS, which is a major benefit for residential members. Because of these
     differences and the limited availability of commercial services in many local boards, the
     Work Group believes modifications to NAR’s membership policies should be considered for
     commercial members and brokerage firms.

    The previous and current Work Group established that the DR dues formula represents the
     most significant policy barrier to commercial member recruitment. Commercial brokers and
     brokerage firms consistently cite this policy as the reason they do not join NAR. In addition
     to the anecdotal evidence, RCA staff is conducting surveys among commercial overlay board
     and commercial structure AE’s to verify this assertion.

    The Work Group has discussed a proposed recommendation to modify the DR dues formula
     ONLY FOR 100% COMMERCIAL FIRMS. In other words, the proposal would allow for
     some individual licensees in a 100% COMMERCIAL FIRM to hold REALTOR®
     membership without requiring all the licensees in the same firm to hold REALTOR®
     membership. The proposal, as discussed, would require the firm’s responsible broker or
     Designated REALTOR® to hold REALTOR® membership, and perhaps the firm’s
     principals and partners, as well.


I:\data\mp\jpinnick\2007mypsc\2007mypscminutes.doc
    This will expose more commercial firms to the benefits of membership in the REALTOR®
     organization, and expand commercial membership. The RCA will continue to develop
     valuable programs, products, and services at the national level to assist local boards in
     developing commercial structures/overlay boards to serve commercial practitioners.

    The Work Group believes this proposal is consistent with the goals of NAR’s Strategic Plan,
     in that it will increase the number of commercial members in NAR, support efforts to deliver
     a wide range of real estate transaction services, recognize and promote the increasingly
     diversified business of REALTORS® and ensure that the REALTOR® organization is truly
     the “Voice for Real Estate.”

    We want to emphasize that the Work Group is not seeking an endorsement of the
     recommendation today, nor will it be formally proposed during the 2007 NAR Midyear
     Legislative Meetings & Expo. This is simply a Work Group update for your information
     only. The NAR Leadership Team has asked for additional research, discussion, and
     input before any final recommendation is brought to them for consideration. The
     additional research on the proposal is ongoing, and depending upon the results the Work
     Group will decide whether to bring a formal proposal to the RCA Committee and any other
     committees as deemed necessary. Formal approval by the Executive Committee and Board
     of Directors will not be requested until all research is completed and a formal
     recommendation has been made and approved by the RCA Committee. This will not happen
     sooner than the 2007 NAR Conference and Expo in November.

    Evidence suggests that the brokers and principles of large, national commercial real estate
     firms would join NAR if this proposed recommendation is adopted. Preliminary research has
     revealed the potential for increased membership for NAR. The Work Group is conducting
     more in depth research to gain a thorough understanding of the proposal’s effect on NAR
     membership and revenue.

    Attracting the national commercial real estate firms to NAR would lend a level of prestige
     and influence to the local, state, and national association, and when one national firm joins,
     others would follow. NAR would reap the benefit of increased dues revenue, enhanced
     RPAC donations, and intellectual contributions from these commercial real estate
     “influencers”. Included in Work Group research will be a solicitation of interest from
     national firms indicating their willingness to join NAR if the “value proposition” is delivered
     which includes the proposed dues formula change for 100% commercial real estate firms.

    The Work Group Chairman Joel Criz is here to answer any questions you might have.




I:\data\mp\jpinnick\2007mypsc\2007mypscminutes.doc
                                                                                                         Appendix B


Form #A-1



                                             Board or State Association




         Address                                      City                              State              Zip

                                       Request and Agreement to Arbitrate

(1)     The undersigned, by becoming and remaining a member of the ______ Board of REALTORS® (or Participant
        in its MLS), has previously consented to arbitration through the Board under its rules and regulations.

(2)     I am informed that each person named below is a member in good standing of the Board (or Participant in
        its MLS), or was a member of said Board of REALTORS® at the time the dispute arose.

(3)     A dispute arising out of the real estate business as defined by Article 17 of the Code of Ethics exists
        between me (or my firm) and (list all persons and/or firms you wish to name as respondents to this
        arbitration):

                                                 REALTOR principal
                    Name                                                                   Address
                                                 REALTOR principal
                    Name                                                                   Address


                      Firm                                                                 Address

(Note: Arbitration is generally conducted between REALTORS  (principals) or between firms comprised of
REALTOR principals.)

(4)     There is due, unpaid and owing to me (or I retain) from the above-named persons the sum of $_____. My
        claim is predicated upon the statement attached, marked Exhibit I and incorporated by reference into this
        application. The disputed funds are currently being held by                            .

(5)     I request and consent to arbitration through the Board in accordance with its Code of Ethics and Arbitration
        Manual (alternatively, “in accordance with the professional standards procedures set forth in the bylaws of
        the Board”), and I agree to abide by the arbitration award and to comply with it promptly.

        In the event I do not comply with the arbitration award and it is necessary for any party to this arbitration to
        obtain judicial confirmation and enforcement of the arbitration award against me, I agree to pay the party
        obtaining such confirmation the costs and reasonable attorney’s fees incurred in obtaining such
        confirmation and enforcement.

(6)     I enclose my check in the sum of $_____ for the arbitration filing deposit.*

(7)     I understand that I may be represented by legal counsel, and that I should give written notice no less than
        fifteen (15) days before the hearing of the name, address, and phone number of my attorney to all parties
        and the Board. Failure to provide this notice may result in a continuance of the hearing, if the Hearing
        Panel determines that the rights of the other party(ies) require representation.


*Not to exceed $500
            Each party must provide a list of the names of witnesses he intends to call at the hearing to the Board and to
            all other parties not less than fifteen (15) days prior to the hearing. Each party shall arrange for his
            witnesses to be present at the time and place designated for the hearing. The following REALTOR®
            nonprincipal (or REALTOR-ASSOCIATE® nonprincipal) affiliated with my firm has a financial interest in the
            outcome of the proceeding and has the right to be present throughout the hearing:

(8)         I declare that this application and the allegations contained herein are true and correct to the best of my
            knowledge and belief and this request for arbitration is filed within one hundred eighty (180) days after the
            closing of the transaction, if any, or within one hundred eighty (180) days after the facts constituting the
            arbitrable matter could have been known in the exercise of reasonable diligence, whichever is later.

(9)         If either party to an arbitration request believes that the Grievance Committee has incorrectly classified the
            issue presented in the request (i.e., mandatory or voluntary), the party has twenty (20) days from the date of
            receipt of the Grievance Committee’s decision to file a written appeal of the decision. Only those materials
            that the Grievance Committee had at the time of its determination may be considered with the appeal by the
            Board of Directors.

(10)        Are the circumstances giving rise to this arbitration request the subject of civil litigation? Yes          No

(11)        Important note related to arbitration conducted pursuant to Standard of Practice 17-4 (1) or (2): Where
            arbitration is conducted between two (or more) cooperating brokers pursuant to Standard of Practice 17-4
            (1) or (2), the amount in dispute and the amount of any potential resulting award is limited to the amount
            paid to the respondent by the listing broker and any amount credited or paid to a party to the transaction at
            the direction of the respondent.

(12)        Address of the property in the transaction giving rise to this arbitration request:
                                                          .

(13)        The sale/lease closed on                                            .

                                                        Complainant(s):



    Name of REALTOR Principal                    Signature of REALTOR Principal                       Date


    Address                                                                                             Telephone


    Name of REALTOR Principal                    Signature of REALTOR Principal                       Date


    Address                                                                                             Telephone


    Name of Firm*                                 Address


*     In cases where arbitration is requested in the name of a firm comprised of REALTORS  (principals), the request must be
      signed by at least one of the REALTOR principals of the firm as a cocomplainant.

(Revised 11/06)
                                                                                                       Appendix C


Form #E-12


                                           Board or State Association



               Address                                 City                       State                 Zip

                                Action of the Board of Directors (Ethics Hearing)

For use by the Board of Directors if no appeal has been filed to the Hearing Panel’s decision:

The decision of the Hearing Panel in the matter of ____________________vs. ___________________________
                                                      Complainant               Respondent

dated_______, 20____ (copy attached), came before the Board of Directors on__________, 20____, and was
considered by the Directors.

The decision of the Hearing Panel and its recommendation for disciplinary action, if any, in the above-referenced
case is hereby (check one):

   adopted verbatim                 adopted, but the recommendation for discipline is modified as follows:

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

    remanded to the Hearing Panel for further consideration of the discipline recommended

    remanded to the Professional Standards Committee for a new hearing by a different Hearing Panel based on
    perceived procedural deficiency(ies)

    reversed and the complaint is dismissed because the findings of fact do not support a possible violation of the
    Code of Ethics

Reason(s) for rejection/Directors’ concerns with Hearing Panel’s decision and/or recommendation(s):

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________


The action of the Board of Directors was adopted on__________________________, 20_______, by resolution.
For the Board of Directors:

                                                                                                    , Secretary
Type/Print                                 Signature

For use by the Board of Directors if appeal is held:

The decision of the Hearing Panel in the matter of ________________________ vs. ______________________
                                                      Complainant                    Respondent
dated ___________________, 20 ______ (copy of the Hearing Panel’s decision attached), was appealed by

____________________________ and was considered by the Board of Directors on _______________, 20 ___.

A copy of _____________________’s appeal alleging _____________________________________ is attached.
             Appellant                               Indicate Basis(es) for Appeal

The Hearing Panel’s decision and recommendation for disciplinary action, if any, in the above-referenced case is
hereby (check one):

   adopted verbatim                  adopted, but the recommendation for discipline is modified as follows:

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

    remanded to the Hearing Panel for further consideration of the discipline recommended

    remanded to the Professional Standards Committee for a new hearing by a different Hearing Panel based on
    perceived procedural deficiency(ies)

    rejected reversed and the matter complaint is dismissed

Reason(s) for modification/remand/rejection of the Hearing Panel’s decision:

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

Disposition of Appeal Deposit (if any):

   to be returned to Appellant

   to be retained by the Board
The action of the Board of Directors was adopted on__________________, 20________, by resolution.


For the Board of Directors:

                                                                                              , Secretary
Type/Print                              Signature
                                                                               Appendix D


                        Association Executives Committee
                     ASSOCIATION MEDIATION WORK GROUP
                                    May 2007

                                      Final Report


Work Group Objective
To review and modify the Standards of Conduct, and the Unacceptable Business
Practices (UBPs) for REALTOR associations; to establish new procedures for
submitting to mediation; and to identify consequences for failure to participate in NAR's
mandatory "Mediation Procedures to Resolve Alleged Violations of the Unacceptable
Business Practices," as well as consequences for violating the UBPs.

Background
When the REALTOR association environment became increasingly competitive
following adoption of the Board of Choice policy, the level of trust, support, and
communication among some staff and volunteer leaders diminished. To address this,
during the 1999 Midwinter Meetings the AEC approved a recommendation to form a
work group charged as follows: “To identify models of cooperation and develop
standards of conduct for REALTOR associations as they face competitive challenges
that have diminished cooperation among associations and created adversarial
relationships in common service areas. To recommend parameters that identify and
eliminate unacceptable and unethical actions and create opportunities to enhance
cooperative working relationships in our board of choice environment.”
        The work group adopted 14 aspirational “Standards of Conduct for REALTOR 
Associations” that describe high standards of professional service and conduct among
REALTOR association volunteer and staff leadership. Each year the chief elected
officer and chief staff executive of each local and state association are
expected/encouraged to sign the standards as a joint pledge to assure member and
public confidence in the integrity and service of REALTOR association leadership.
(Attachment A)
        The work group identified five Unacceptable Business Practices (UBPs) –
behaviors and business practices to be avoided by REALTOR associations. The
UBPs are intended to encourage awareness of behaviors that REALTOR associations
should avoid, and to eliminate such practices from the industry. (Attachment A)
        During the 2000 Midyear Meeting the AEC approved the following work group
recommendation, which was subsequently approved by the Board of Directors:
“Encourage adherence to the Standards of Conduct for REALTOR Associations;
adopt the Unacceptable Business Practices; adopt the Mediation Procedures for
REALTOR Associations for use by those REALTOR associations who are unable to
resolve differences with other REALTOR associations who have allegedly engaged in
one or more Unacceptable Business Practices. “ (Attachment B)
        During the 2000 REALTORS Conference, the Board of Directors approved a
motion to amend Article IV of the NAR Bylaws to obligate associations to mediate
disputes with other member associations arising out of the UBPs. (Attachment C)


                                            1
                                                                                 Appendix D


        Since the Mediation Procedures were approved in May 2000, there have been
nine inquiries into the process. Two of the requests for mediation were denied because
the associations were engaged in lawsuits involving alleged violations of the UBPs, and
the Mediation Procedures provide that NAR will not process a mediation request if the
alleged violations arise out of the same course of conduct or series of events that are at
issue in pending litigation. Other requests did not proceed to mediation because the
alleged violations did not fall under any of the five UBPs. Another was withdrawn, and
another was resolved through discussions between one of the AEs and the NAR
EVP/CEO.
        Only one request was determined to have met the criteria for mediation. Upon
notification, the respondent association initially refused to participate in mediation until
NAR informed the association that mediation was mandatory under the NAR Bylaws.
Mediation occurred shortly thereafter and the results were reported to have been
encouraging.
        AEC leadership and staff felt it was time to reevaluate the mediation procedures
to ensure that they provide a fair and valuable service to REALTOR associations, staff
and volunteer leaders. As a result, the Executive Committee approved an AEC
recommendation during the 2006 REALTORS Conference that a work group be
formed to reexamine the current Standards of Conduct, UBPs, and Mediation
Procedures.

Work Group Discussion and Recommendations
The AEC Association Mediation Work Group, which met April 3-4, 2007, in Chicago,
included REALTORS and AEs of the Membership Policy and Board Jurisdiction and
Professional Standards committees, and other AE representatives.

Dispute Resolution Options
Work group members agreed that associations should attempt to resolve differences
with one another through some means within the REALTOR organization, and that
NAR should provide a sequenced set of dispute resolution tools, use of which would be
completely voluntary. The proposed options include an ombuds program, voluntary
(though binding should agreement result) mediation, and voluntary (though binding)
arbitration. The following MOTION was made, seconded, and carried:

       “That NAR make ombuds services available to resolve disputes between
       REALTOR associations. Participation in an ombuds process is
       discretionary on the part of any association. In instances where disputes
       between associations are not resolved through an ombuds or where
       parties choose not to avail themselves of ombuds services, that NAR make
       mediation services available to the parties. Mediation, under these
       circumstances, will occur only if all parties voluntarily participate. In
       instances where mediation is unsuccessful, or where parties choose not to
       mediate, NAR will make arbitration services available to the parties.
       Arbitration, under these circumstances, will occur only if all parties
       voluntarily agree to participate and be bound by the decision/award of the
       arbitrator(s).”


                                             2
                                                                                  Appendix D


The proposed ombuds program is intended to be a voluntary, informal, and confidential
process that facilitates fair and equitable resolutions of concerns/issues between
REALTOR associations. Ombuds might be selected from the ranks of NAR’s William
R. Magel Award recipients, retired Almon R. Smith AE Leadership Society recipients,
other retired AEs, Distinguished Service Award recipients, or retired NAR staff. The
services of three ombuds would be made available to all REALTOR associations; and
to ensure confidentiality, association staff and volunteer leaders will have a direct line to
the ombuds they choose to consult with. The ombuds would serve as an information
and communications resource, advisor, dispute resolution expert, and change agent,
and would be compensated per case. NAR would cover all costs associated with the
ombuds service.

Mediation services should be available to all disputing associations upon request, even
if the parties are engaged in a lawsuit. The parties would choose from a pool of 10
mediators selected from among the mediators who participated in NAR’s mediation
training. Mediation would be conducted in Chicago, and NAR would cover all costs
associated with mediation, except for disputants’ travel expenses. If associations
choose to use non-REALTOR association mediators who have not participated in
NAR’s mediation training, mediation would be at their own expense. The president of
each association involved in the dispute could identify up to five participants, who must
have authority to bind their association to any resulting agreement, to attend the
mediation.

Arbitration services would be available to disputing associations upon request, even if
the parties are engaged in a lawsuit, provided the parties first terminate the litigation.
Each party would choose one arbitrator from among the individuals who have
participated in NAR’s mediation training and who have made their availability known via
the mediation database. The arbitrators so chosen would then choose a neutral
arbitrator to chair the proceeding. Arbitration would be conducted in Chicago, and NAR
would cover all costs associated with arbitration, except for travel expenses of the
disputants,. All parties would be required to agree in advance to accept the arbitration
decision, which would be binding and enforceable.

Upon acceptance of the proposed three-tiered voluntary dispute resolution process, the
NAR Board of Directors will be asked to rescind the article of the NAR Bylaws that
obligates associations to mediate disputes with other member associations arising out
of the UBPs. The following Work Group MOTION was made, seconded, and carried:

       “That the NAR Bylaws, Article IV, Section 3, be rescinded subject to
       approval of the new proposed three-tiered voluntary process for resolving
       disputes between REALTOR associations.”

Standards of Conduct and Unacceptable Business Practices
The work group reviewed the current Standards of Conduct and UBPs to determine
whether they should remain as written or whether they should be refocused. The work
group determined that a separate review of the aspirational Standards of Conduct is
necessary; but that the standards not be part of the new proposed dispute resolution

                                              3
                                                                                 Appendix D


process. Further, since the work group recommends a completely voluntary process,
the UBPs will also be eliminated, to minimize barriers and to encourage a more open
process and environment for resolving differences. The following MOTION was made,
seconded, and carried:

       “That the aspirational Standards of Conduct and the Unacceptable
       Business Practices not be part of the proposed three-tiered REALTOR
       association dispute resolution system, and that a work group be formed to
       consider whether the Standards of Conduct should be incorporated into
       the on-line President’s Leadership Guide or in other leadership materials
       for staff and volunteer leaders.”

Education
The work group acknowledged that both staff and volunteer leaders need to be fully
informed of the proposed dispute resolution process. Greater awareness will give
associations more ready access to the resources available to help them address
concerns and resolve conflict with other associations. Greater awareness may also
encourage more ethical behavior and help associations distinguish between competitive
business practices and unethical or unacceptable business practices.

Unlike the current mediation program, promotion and education efforts for the new
proposed dispute resolution process need to be directed toward both staff and volunteer
leaders. To ensure effective resolution, all association leaders need to be involved in
the process, not just the chief staff executive. Education opportunities include the
following:

- Information on REALTOR.org
- Articles in REALTOR Magazine and REALTOR Association Executive Magazine
- Webcast for AEs and presidents
- Coverage in on-line President’s Leadership Guide
- Mention at New AE Orientation
- Sessions at AE Institute that include topics on working with difficult people, negotiation
skills, resolving conflict, and “how to” sessions that explain the available resources for
conflict resolution
- Outreach presentations during state and regional meetings
- Periodic announcements at NAR meetings (AEC/Forum, President and AE roundtable
sessions, State and Board Leadership forums)

Next Steps
1. Work group report is presented during the 2007 Midyear AEC/Forum, and AEC
members are asked to approve a recommendation to support the proposed dispute
resolution process.

2. Pending AEC approval, during the 2007 Midyear Meeting the Membership Policy
and Board Jurisdiction and Professional Standards committees would each be asked to
support the proposed dispute resolution process.


                                             4
                                                                         Appendix D


3. With support from the Membership Policy and Board Jurisdiction Committee and the
Professional Standards Committee, during the 2007 Midyear Meeting the AEC submits
a recommendation to the Executive Committee to approve the proposed dispute
resolution process. At the 2007 REALTORS Conference and Expo meeting the Board
of Directors will be asked to rescind the article of the NAR Bylaws that obligates
associations to mediate disputes with other member associations.

4. Form a work group to review the Standards of Conduct for REALTOR  Associations
and determine where these standards should be incorporated to ensure awareness and
understanding among staff and volunteer leaders.

Work Group Members
Diane Ruggiero, MO – CHAIR
Walt Baczkowski, MI
Allyson Bernard, CT
Bob Brown, CO
Steve Casper, OH
Wally Folks, TX
John Fridlington, FL
Steve Hoover, VA
Alice Martin, AZ
Jenny Pakula, OR
Kathy Roberts, FL
Mark Milligan, FL
Frank Pietranton, DC
Randy Raynolds, IL
Pat Reilly, NY
Stan Sieron, IL

NAR Staff
Gar Anderson
Kevin Milligan
Cliff Niersbach
Cindy Sampalis




                                         5
                                                                                      Attachment A


              Standards of Conduct for REALTOR Associations
                   and Unacceptable Business Practices

Preamble
Strong, cooperative working relationships among REALTOR associations (local and state
associations, MLSs, foundations, etc.) (herein referred to as REALTOR associations) have
long been a strength of the REALTOR organization. To ensure that competitive challenges do
not create adversarial relationships through diminished cooperation, Standards of Conduct for
REALTOR Associations have been established.

Through comprehensive awareness of Unacceptable Business Practices and thorough
adherence to the Standards of Conduct for REALTOR Associations, a cooperative spirit
among REALTOR association organizations can be preserved and enhanced.

Standards of Conduct for REALTOR Associations
The Standards of Conduct describe high standards of professional conduct and service among
REALTOR association volunteer and staff leadership. Though aspirational, these standards,
which instill member and public confidence in the integrity service of REALTOR association
leadership, are intended to be signed each year by the volunteer leadership and association
staff to demonstrate their commitment to these principles.

1. Maintain the highest standards of personal conduct.

2. Actively promote and encourage the highest degree of ethics at all levels within the real
estate industry.

3. Maintain loyalty to the REALTOR association, and pursue its objectives in ways that are
consistent with member and public interest.

4. Abide by association policies, procedures, and laws impacting REALTOR associations.

5. Strive for excellence in all aspects of leading and managing the association.

6. Serve all association members fairly and impartially.

7. Refuse to engage in a decision-making capacity or to accept personal benefit from business-
related activities, which might create a conflict of interest, without full disclosure and knowledge
of the association's governing board.

8. Maintain confidentiality of privileged information entrusted or known by virtue of an office or
position, unless disclosure is necessary to protect the interests of the association.

9. Refuse to engage in, or countenance, activities for personal gain at the expense of the
association or the real estate industry.

10. Refuse to engage in, or countenance, unlawful discrimination.

11. Ensure that communicated data and information is accurate and truthful.

12. Cooperate in every reasonable and appropriate way with other association executives and
officers, and work with them in the advancement of the association and the real estate industry.

13. Create and promote a positive public image and role for the REALTOR association and the
real estate industry.

14. Ensure that the objective of all association actions and pursuits is to provide the best
possible services for the REALTOR member.


Unacceptable Business Practices
The Unacceptable Business Practices, outline behaviors and business practices to be avoided
by REALTOR associations. The Unacceptable Business Practices are intended to encourage
awareness of behaviors that REALTOR associations should avoid, and to eliminate such
practices from the industry.

1. Knowing or reckless false or misleading representations about other REALTOR
associations or the association's programs, products, or services

2. False, deceptive, or misleading advertising or marketing practices

3. Illegal business practices

4. Knowing violation of state or national policies or mandated local policies

5. Undisclosed conflict of interest




I, ___________________________, (Association chief elected officer)
have read the Standards of Conduct for REALTOR Associations and am committed to these
principles.



I, ___________________________, (Association chief staff executive)
 have read the Standards of Conduct for REALTOR Associations and am committed to these
principles.
                                                                                    Attachment B


           Mediation Procedures to Resolve Alleged Violations of the
                      Unacceptable Business Practices


A REALTOR association (local or state association, MLS, foundation, etc.) (herein referred to
as REALTOR association) that cannot resolve its differences with another REALTOR
association may invoke the mandatory mediation procedure outlined below. Respondent
associations are obligated to submit to mediation when invoked by another association and
both/all parties are strongly encouraged to work toward a fair and equitable resolution. If an
association is engaged in a lawsuit involving alleged violations of the Unacceptable Business
Practices, the NATIONAL ASSOCIATION OF REALTORS cannot process a mediation
request from either of the parties if the alleged violations arise out of the same course of
conduct or series of events that are at issue in the pending litigation. Once the litigation has
concluded, mediation may be pursued.


1. The governing body of the REALTOR association who believes a potential violation of one
of the Unacceptable Business Practices (UBP) may have occurred initiates the mediation
procedure through a letter to NAR's AE and Leadership Development Department,
accompanied by a $300 administrative filing fee that is not refundable once the mediation
process has started. A copy of the letter should also be sent to the complainant’s state
association.

2. NAR staff makes a preliminary determination as to which, if any, UBP has been violated, and
sends a copy of the correspondence detailing the complaint to the respondent REALTOR
association, requiring a timely written response to the complaint. A copy of the correspondence
will also be sent to the respondent’s state association.

3. Upon receipt of the respondent's written response to the complaint, NAR may attempt to
resolve the issue through informal means.

4. In the event a response is not received, or if staff is unable to resolve the issue to the
satisfaction of the disputing parties, the matter will be referred to a mediation officer with the
complainant and respondent correspondence and any additional background information
available. Mediation officers are chosen from a pool, identified by the NAR president, which may
be comprised of members of the NAR Leadership Team, REALTOR members, and
REALTOR association staff who are highly regarded for fairness, impartiality, diplomacy, and
experience.

5. The parties may choose a mediator from the pool identified by the NAR president. If the
parties are unable to reach agreement on a mediator, then each party will identify one mediator
and the two mediators will select one mediator to proceed with the mediation procedure. Parties
may also identify mediators outside the pool, and if NAR agrees that the individual is an
acceptable mediator, he or she may be added to the pool.

6. The mediation officer contacts the chief elected officer of the complainant and respondent
organizations, and establishes a mutually convenient time and location for the mediation. Both
organizations are allowed to select up to three individuals to represent them in the mediation
process, at least one of whom will be an elected officer.
7. Mediation officers travel to the arranged meeting location, and will be reimbursed for direct
expenses only. With all parties present the mediation officer attempts to facilitate an amicable
and fair resolution.

8. Costs incurred by mediation will be shared equally by the disputing parties.

9. If for any reason any of the parties or the mediation officer are unable to participate in the
mediation procedure on the date agreed, mediation should be rescheduled to the earliest
mutually acceptable date. Mediation cannot be successfully conducted without all of the parties
present and participating.

10. Recognizing that a dispute exists between the parties, the mediation officer should make
every effort to encourage a conciliatory atmosphere while ensuring a full discussion of all
pertinent facts. If, following a thorough discussion of all pertinent issues, the parties reach a
mutually agreeable resolution, the matter will be deemed resolved and the mediation process
concluded. The agreement will be reduced to writing and signed by both parties.

11. If the parties are unable to reach a mutually acceptable resolution, the mediation officer, at
his or her discretion and at the conclusion of the mediation conference, can suggest a proposed
resolution. The mediator’s recommendation must be in writing and will be shared with all of the
disputing parties. The parties can accept the mediator’s suggestion or reject it at that time. If the
parties want additional time to consider the proposal, they will be given a specified period of
time, not to exceed 72 hours, to accept or reject it. Any party not responding to the mediator
within the specified time will be deemed to have rejected the proposal.

12. If the parties are unable to reach a mutually agreeable resolution by the conclusion of the
mediation conference, or accept the mediation officer’s proposed resolution within the time
specified, the mediation process will conclude and the parties will be free to pursue any other
remedies or recourse available to them.




May 2000
October 2005 (revised)
                                                          Attachment C




                       2006 NAR Bylaws
                             ARTICLE IV

                          CODE OF ETHICS


Section 3. Each Member Board shall mediate in good faith any
dispute with another Member Board arising out of the National
Association’s Statement of Unacceptable Business Practices
which dispute can not be resolved by the affected Member
Boards. Such mediation shall be conducted in accordance with
the mediation procedures approved by the Board of Directors of
the National Association. The failure of any Member Board to
mediate in good faith shall be treated as a violation of the
membership duties of that Member Board under Article I, Section
2 of these Bylaws.

                             ARTICLE I

                            MEMBERSHIP

Section 2. No Member Board, nor any Institute, Society or
Council, shall apply any arbitrary numerical or other inequitable
limitation on its membership nor adopt any rule, regulation,
practice or policy inconsistent with or contrary to any policy
adopted by the Board of Directors.

								
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