The realtor Code of Ethics Quadrennial Member Education Program Copyright, 2000 National Association of realtors

Page 6 Types of Discipline and Costs

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Page 6

Types of Discipline and Costs
The most important issue in this section is that the authorized disciplinary actions are the only sanctions that may be imposed for violations of the Code. Panels may not impose a sanction not included on this list. You should briefly walk through the list of disciplinary actions. Note that the last item, the administrative processing fee, is not discipline and is used only if the association has a policy which imposes the administrative processing fee in all cases where a violation of the Code is found.

The Arbitration Process
Spend a few minutes discussing arbitration as defined in Article 17 of the Code. Note that arbitration of disputes is limited to circumstances falling within the parameters of Article 17. For example, damages in an automobile accident would not be an arbitrable matter simply because two REALTORS were involved in an accident. This type of claim is not “arising out of their relationship as REALTORS.”
You should note that the Grievance Committee determines arbitrability when it reviews an arbitration request.

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D. Authorized Discipline (and administrative processing fees)

1. Letter of Warning

2. Letter of Reprimand

3. Education

4. Fine not to exceed $5,000

5. Probation for one year or less

6. Suspension for not less than 30 days nor more than one year

7. Expulsion from membership for period of one to three years

8. Suspension or termination of MLS privileges.

9. Administrative processing fee (if found in violation) not to exceed $500 (“Court Costs”)
III. The Arbitration Process
A. Request filed.

1. Arbitration is conducted under Article 17 of the Code of Ethics and the state arbitration statute (if any).

2. Article 17 provides that arbitration occurs under the following circumstances:

a. Contractual disputes or specific non-contractual disputes (see Standard of Practice 17-4);

b. Between REALTORS (principals) associated with different firms;

c. Arising out of their relationship as REALTORS

B. Grievance Committee
1. Committee performs a screening function similar to review of ethics complaints.

2. Key question for the Grievance Committee is: “If the allegations in the request for arbitration were taken as true on their face, is the matter at issue related to a real estate transaction and is it properly arbitrable, i.e. is there some basis on which an award could be based?

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Briefly describe the concept of mediation and review the outline material with the class. You might note that Boards and Associations will be required to provide mediation services as of January 1, 2002. So, even if your association does not currently offer mediation services, you should tell the class that this service will be available to them effective January 1, 2002.

Review the Professional Standards Hearing Panel material as you did with in the Code of Ethics section.
Lastly, note that in the event an arbitration award is not voluntarily paid, the arbitration award can be enforced through judicial processes. Alternatively, associations can adopt procedures requiring that awards be deposited with and held by the association pending procedural review or legal challenges.

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C. Mediation

1. A voluntary process in which disputing parties meet with a mediator appointed by the Association to create a mutually acceptable resolution of the dispute, rather than having a decision imposed by an arbitration hearing panel.

2. Mediation can occur before or after the Grievance Committee reviews requests for arbitration, depending on local Association policy.

3. If a dispute is resolved in mediation, the parties sign an agreement spelling out the terms of the settlement, and no arbitration hearing is held.

D. Professional Standards Hearing Panel

1. Function is to conduct a full “due process” hearing with sworn testimony, counsel, witnesses and documentary evidence.

2. Hearing Panel consists of members of the Professional Standards.

3. After the hearing, the Hearing Panel decides which REALTOR is entitled to the award (typically a disputed commission in a transaction), proven by a preponderance of the evidence.

  1. Payment of the Award - Generally, the award of the Panel in an arbitration case can be judicially enforced if not paid by the non-prevailing party. Some associations have procedures requiring that awards by deposited with the association pending review of the hearing process or during legal challenge.

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