Crafting Disciplines

Prepared January 2014

Code enforcement achieves a number of goals.

Where REALTORS® are wrongly or mistakenly charged with unethical conduct, the hearing process provides personal and professional vindication.

Where violations are determined, the hearing process educates members about their professional obligations and serves as a meaningful deterrent to future violations.

• Given that membership confers valuable rights, Boards need to strictly adhere to their established procedures when considering potential ethics violations.

This caution ensures that the rights of the parties will be observed and that legal exposure of Boards will be minimized.

At the same time, well-founded caution should not be confused with reservation, reluctance, or hesitancy.

• The Code’s duties become aspirations at best, and potentially meaningless, if not enforced, and enforced with vigor and determination.

•Discipline that can be imposed is strictly limited to those forms authorized in the Manual.

Authorized Disciplines

1. Letter of Warning in file up to three years

2. Letter of Reprimand in file up to three years

3. Requirement for Ethics Training

4. Appropriate and reasonable fine

5. Probation

6. Suspension of Membership/MLS

7. Expulsion from Membership/MLS

Letter of Warning

A letter from the Association president to a Respondent advising of a lack of professional conduct or a violation of MLS rules determined by a "due process" hearing by a hearing Panel and warning that future similar conduct could result in further and additional discipline as provided in this Manual.

Letter of Reprimand

A letter from the Association president to a Respondent, advising of a lack of professional conduct or a violation of MLS rules determined by a "due process" hearing by a hearing Panel, and advising that the letter is to be construed as an official reprimand.

Requirement for Ethics TrainingA letter from the Association President or Professional Standards Committee Chairperson to Respondent, advising of a lack of professional conduct or a violation of MLS rules determined by a "due process" hearing by a hearing Panel and directing the person to attend the applicable ethics portion of the Association indoctrination course or other appropriate ethics course, MLS orientation or seminar, or other appropriate course specified by the hearing Panel.

Appropriate and Reasonable Fine

A fine commensurate with the gravity of the determined violation of the N.A.R. Code of Ethics or any other membership duty, not to exceed $15,000 per party, per hearing, for an ethics violation or REALTOR® membership duty, and not to exceed $15,000 per party, per hearing, for violation of an MLS Rule or MLS membership duty, and in each case the fine is payable to the Association.

Probation

The discipline recommended by the hearing Panel will be held in abeyance for a designated period of time not to exceed one (1) year. Any subsequent finding based on a violation of the same Article(s) of the Code of Ethics, membership duty or same MLS rule(s) which occurs during the probationary period may, at the discretion of the Board of Directors, result in the imposition of the suspended discipline.

Suspension of Membership

Suspension of membership rights and privileges and denial of Association services, on terms and conditions expressly stated for a period of time not less than thirty (30) calendar and not more than one (1) year, including, but not limited to, use of the terms REALTOR®, with reinstatement as a member in good standing automatically provided at the end of the specified period.

Suspension from MLSSuspension of all privileges and services of the MLS on terms and conditions expressly stated for a period of time not less than thirty (30) calendar days and not more than one (1) year. Reinstatement as a full Participant or Subscriber shall be automatic at the end of the specified period providing the Participant or Subscriber is current on all amounts owed the MLS and has kept all fees current during the period of suspension

Remedial SuspensionIn the event the suspension is for a remediable violation, the suspension is in effect for the period that the violation remains uncorrected, and the minimum and maximum time limits for suspension do not apply. “Remediable violations” are those that can be corrected by the member, such as completion of mandatory training, nonpayment of fees, or other curable violation.

Expulsion from Membership

Expulsion from membership in the Association for a period of not less than one (1), but not more than three (3) years, with reinstatement to membership only by application as a new member after the end of the period of expulsion, with the application considered on its merits

Expulsion from MLS

Expulsion from all privileges and services of the MLS on terms and conditions expressly stated for a period of time not less than one (1) year, but not more that three (3) years. Reinstatement to MLS services as a full Participant or Subscriber shall be by application as a new MLS participant or Subscriber after the end of the period of expulsion, with the application considered on its merits

Privileges & Services of MLS

Suspension of all privileges and services of the MLS shall include, but is not limited to, the ability to submit listings to the MLS, retain current listings in the MLS data base, use computer terminals, receive MLS Compilations or comparable materials.

Discipline should be commensurate with the offense.

Unintentional or inadvertent violations should result in penalties designed to educate respondents as to the conduct expected of them as REALTORS®.

Conversely, if a REALTOR® intentionally violates the Code, for example to realize an economic gain, a more severe sanction would be appropriate.

Discipline should be progressive.

The disciplinary emphasis on violations by new members or by longstanding members with no history of unethical conduct should be primarily educational.

Repeated or subsequent violations should be addressed with more serious forms of discipline including substantial fines, suspension, and termination of membership.

A “gray area” can exist with respect to “first time violations” that are clearly not the result of ignorance or mistake but rather demonstrate flagrant disregard for the Code’s obligations.

While the educational aspect of Code enforcement cannot be disregarded, the fact that the Code exists to protect the public must also be seriously considered in determining commensurate discipline.

Mitigating or extenuating circumstances should be considered in determining appropriate discipline.

The fact that a respondent recognized or acknowledged inappropriate or unethical conduct, or took steps to remediate or minimize harm or injury that may have resulted from the respondent’s conduct, should be considered in determining appropriate discipline.

Respondents’ records of earlier violations (or, conversely, the fact that they have not violated the Code in the past) should be considered in determining appropriate discipline.

Hearing Panels cannot consider past violations in deciding whether the conduct currently complained of violated the Code.

Crafting appropriate, meaningful discipline can challenge panels that have concluded that the Code has been violated.

Factors to Consider

(1) The nature of the violation. (2) Harm caused by the violation. Was the violation

a minor mistake causing little or no harm or, alternatively, was a client, customer, member of the public, or another REALTOR® harmed?

(3) Was the violation inadvertent or unintentional or, conversely, was it the result of knowing disregard for the Code’s obligations?

(4) How much real estate experience did the violator have? Did he, or should he, have known better? (5) Has the violator been found in violation of the Code previously? How often? How recently? Is the current violation related or similar to earlier violations?

(6) Are there mitigating or extenuating circumstances that should be considered in determining appropriate discipline? (7) Did the violator acknowledge the violation? Did the violator express remorse or contrition? (8) Are there other factors that ought to be considered?

With these questions in mind, panels can be guided by (but are not bound by) the following guidelines which may be modified locally at the discretion of each local Board.

First Violation Level 1

First violation (or first violation within three [3] years): violation considered relatively minor, or little or no harm or injury caused to others, or violation resulted from ignorance or misunderstanding

Possible discipline: letter of warning fine of $500 or less attendance at relevant education session any combination of the above

Repeat Violation Level 1Repeat violations (within three [3] years): current violation considered relatively minor, or little or no harm or injury caused to others, or violation resulted from ignorance or misunderstanding

Possible discipline: attendance at relevant education session(s) or course fine of $2,000 or less probation for three (3) months or less*

First Violation Level 2

First violation (or first violation within three [3] years): violation considered relatively serious, or some harm or injury caused to others, or violation resulted from disregard for the Code’s obligations

Possible discipline: letter of reprimand fine of $2,000 or less attendance at relevant education session(s) any combination of the above

Repeat Violation Level 2

Repeat violations (within three [3] years): current violation considered relatively serious, or some harm or injury caused to others, or violation resulted from disregard for the Code’s obligation

Possible discipline: attendance at relevant education session(s) or course fine of $10,000 or less probation for six (6) months or less* suspension for three (3) months or less any combination of the above

First Violation Level 3First violation (or first violation within three [3] years): • violation considered very serious, or• substantial harm or injury caused to others, or• violation resulted from knowing disregard of the

Code’s obligations

Possible discipline: letter of reprimand fine of $10,000 or less attendance at relevant education session(s) probation* suspension for ninety (90) days or less any combination of the above

Repeat Violation Level 3

Repeat violations (within three [3] years): violation considered very serious, or substantial harm or injury caused to others, or violation resulted from knowing disregard for the Code’s obligations

Possible discipline: attendance at relevant education session(s) or course fine of $15,000 or less probation for one (1) year or less* suspension for six (6) months or less any combination of the above

Processing Fees

Any processing fee policy adopted by the Association and any subsequent processing fee assessed will be in addition to any discipline, including fines, and shall not be considered part of any disciplinary sanction imposed.

More serious forms of discipline (including fines of up to $15,000, possible termination of MLS privileges, suspension from membership for up to one [1] year, or termination of membership for up to three [3] years) may be appropriate in cases of very serious violations or in cases of repeated violations.

These are not sentencing rules or requirements, but rather simply suggestions to guide Hearing Panels in determining appropriate discipline based both on the current violation and the violator’s previous record of ethical conduct.

The National Association does not recommend specific discipline for certain offenses, or for violations of particular Articles of the Code.

This is in deference to the wisdom and autonomy of Hearing Panels privy to the details of complaints coming before them-

In recognition of the fact that no two complaints are identical.

The details of each hearing, including the experience of respondents, their history of prior violations, and mitigating or extenuating circumstances, may all come into play in determining an appropriate penalty.