2017 Attorney Seminar 9/13/2018 Welcome to the National Association of REALTORS® Professional Standards Attorney Seminar

Page 4 PS Trivia, Ice Breaker

Professional Standards Due Process Refer for hearing on mandatory or voluntary basis. Staff Grievance Committee Hearing Panel Ethics Complaint Arbitration Request Refer for a hearing with or without amending. Board of Directors After hearing, award final, if no procedural review requested; otherwise, hear procedural review. After hearing, affirm decision if no appeal filed; otherwise, hear appeal. Dismiss – “appealable” to Board of Directors.

Elements of Due Process Page 7 Elements of Due Process Timely notice of specific charges Adequate time to prepare a defense Ability to hear testimony and cross-examine Opportunity to tell your story Right to counsel Impartial hearing panel Appropriate, authorized sanctions Availability of appeal/procedural review

Due Process Case Studies Page 8 Due Process Case Studies

Hearing Panel Decisions Page 16 Findings of Fact and Hearing Panel Decisions

Components of Ethics Hearing Panel Decision Page 16 Components of Ethics Hearing Panel Decision Findings of Fact Conclusion Prior Violations, if Any Discipline Rational for Discipline Consequences for Noncompliance

Ethics Hearing Panel’s Decision Page 16 Ethics Hearing Panel’s Decision Findings of fact should be: comprehensive succinct provide rationale written as if the reader knows nothing about the case written out even if no violation found

Ethics Hearing Panel’s Conclusions Page 16 Ethics Hearing Panel’s Conclusions Which Article(s)? Violation or no violation? Why? What is the standard of proof in ethics?

Ethics: Authorized Discipline Page 16 Ethics: Authorized Discipline No discipline Cease or refrain from conduct in violation of Code Letter of warning Expulsion from membership for a period of 1 to 3 years Letter of reprimand Education Suspension or termination of MLS privileges Fine not to exceed $15,000 Suspension for not less than 30 days nor more than one year Note: Probation is not considered discipline

Ethics: Determining Discipline Page 17 Ethics: Determining Discipline Specify type of education, when and where. Specify time frame for compliance. Include length of suspension/expulsion, when it begins and when it ends. Provide for additional discipline if member does not comply with original discipline. State conditions for reinstatement/readmission.

Ethics: Determining Discipline Page 17 Ethics: Determining Discipline Sanctioning Guidelines Follow “disciplinary theory.” Use Appendix VII to Part Four of the Code of Ethics and Arbitration Manual. Public Trust misappropriation of funds fraud discrimination

Ethics: Executive Session Page 17 Ethics: Executive Session Association option, whether counsel/staff attend Case stands as submitted Clear, strong, and convincing evidence is the standard of proof Cannot amend complaint or ask for more information/documentation Determine findings and discipline A majority sign Dissenting opinions are allowed

Hearing Panel Decision Page 18 Critiquing Hearing Panel Decision

Ethics Hearing Role Play Page 20 Ethics Hearing Role Play

Findings of Fact Additional Information Weeya was found in violation of Article 2 three years ago, misrepresenting the zoning of a property she had listed. timely complied with $1,000 fine and three hour ethics class

Arbitration - An Overview Page 26 Arbitration - An Overview

Bases for Arbitration Arbitrability Page 26 Bases for Arbitration Arbitrability Successful transaction: sale that closes or lease that is executed contractual dispute or specific non-contractual dispute as defined by Standard of Practice 17-4

Arbitration Award There are no findings of fact in arbitration. Page 26 Arbitration Award There are no findings of fact in arbitration. After a hearing, the panel decides which party is entitled to the award, based on a preponderance of evidence.

Arbitration Award Payment Page 26 Arbitration Award Payment An unpaid award typically can be judicially enforced. Associations will require the non-prevailing party to, within ten (10) days, either pay the award to the prevailing party or deposit a like amount with the association.

Procuring Cause Page 27 The proximate cause; the cause originating a series of events which, without break in their continuity, result in the accomplishment of the prime object. – Black’s Law Dictionary, Fifth Edition

Procuring Cause Factors Page 27 Procuring Cause Factors There are no pre-determiners. Writing a successful offer, making the first showing, or the existence of an agency relationship do not, in and of themselves, determine entitlement. Arbitrability and appropriate parties. Relevance and admissibility. Communication and contact – abandonment and estrangement. Conformity with state law. Consider the entire course of events.

Mandatory or Voluntary? Page 32 Arbitrable or Not? Mandatory or Voluntary?

Professional Standards “What-ifs” Page 36 Professional Standards “What-ifs”

Panel Discussion

Alternative Dispute Resolution Mediation of Potentially Unethical Conduct, page 76 of the Code of Ethics and Arbitration Manual Model Citation Policy, page 52 Ombudsman Program, page 59

Ombuds, Mediation, Arbitration No cost Low-cost Moderate cost No delay Little delay Moderate delay Maximum flexibility, may open dialogue Maximum range of solutions Win/lose/split Parties control outcome Arbitrators control outcome Uncertain closure Definite closure Maintain/improve relationship May harm relationships Prospective Retrospective Communicate typically via phone Mediation usually held in person Arbitration in person (unless remote)

Answers to Your Questions and Local Concerns ???