Ethics & Complaints
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Arbitration Request
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Background
By virtue of becoming and remaining a member of an Association and having signed an agreement to abide by Association bylaws, every member agrees to bindt hemselves and the company for whom they act to submit disputes "arising out of a real estate transaction" to arbitration as defined in Article 17 of the National Association of REALTORS® Code of Ethics. Furthermore, membership termination from the Association will not absolve the member of arbitration duty for disputes arising when the person was a member of the Association. Disputes subject to arbitration include disputes with other REALTOR® members arising out of real estate business and their relationship as REALTORS® (usually over the distribution of a commission) and in specified contractual disputes with a member's client arising out of an agency relationship between the member and client (provided the client agrees to submit the dispute to binding arbitration with the association and be bound by the arbitration award). REALTOR® and REALTOR-ASSOCIATE® members filing for arbitration of a dispute involving the responsible broker at the time of the dispute (but not between the member and responsible broker) must have the responsible broker join in the dispute and filing of a complaint. Members and the Association are not bound to arbitrate disputes between members of the same firm unless each party agrees in writing to the arbitration of such disputes under the Association's facilities or a copy of the Independent Contractor's Agreement specifying that the matter be considered at the Association is presented. Similarly, if members enter into separate agreements to arbitrate disputes outside of the Association (e.g. the American Arbitration Association); this separate agreement would supersede the obligation to arbitrate the dispute at the Association. This would not include an attempt to bypass the arbitration process by filing a civil lawsuit against another member. In this case the respondent member can request the court to compel arbitration at the local association in accordance with the arbitration agreement; however, failure by the respondent to make this request of the court would waive the right of the parties to arbitrate at the local association. Associations may also refuse arbitrations that clearly did not arise out of the real estate business, are clearly beyond the time frame for submission of an arbitration complaint, are legally too complex, or the amount involved in the dispute is considered too large or too small. If an arbitratable matter is involved in litigation at the time a complaint is filed, the arbitration will not be heard at the Association unless litigation is withdrawn or the courts refer the matter back to the Association. If a member holds membership in several different associations, another member can file a complaint at any association where the other member holds membership or where both members have common membership. If both an ethics complaint and a request for arbitration are received concerning the same event, the Association will wait until the arbitration has been concluded before proceeding with the ethics complaint. Also, if more than one arbitration complaint is received concerning the same event, the requests will be combined and considered in one arbitration hearing. And under no circumstances are punitive damages awarded or will an award exceed more than the amount specified in the dispute.
Filing an Arbitration
To file an arbitration complaint you must:
· Complete, sign and date the Arbitration Request Form, which you may download and print from this website. Arbitration request forms should be typed or printed and indicate the amount in dispute and should be submitted with a legible narrative explaining why you feel you are entitled to an award, with any pertinent exhibits and attachments clearly marked. Eight (8) legible copies of all documents must accompany the arbitration request.
· The complaint must be filed within one hundred and eighty days (180) from the date the transaction closes or from the time the facts giving rise to the dispute occurred.
· Include an arbitration filing fee of $250 made payable to the Sacramento Association of REALTORS®.
· Obtain the complaining broker's signature on all requests to arbitrate. Arbitration may not proceed with the salesperson as the sole complainant.
· Be sure to determine the necessary and appropriate respondent depending on the circumstances of the dispute—usually the responsible broker in a commission dispute.
Before the Hearing
· The EVP or appropriate staff may determine whether the complaint is properly filed and subject to arbitration by the Association. · If properly filed and determined to be arbitratable, each named respondent will be notified and mailed a copy of the complaint with directions to return the written response with the appropriate filing fee within 15 days of the date of mailing. · Parties will be offered the opportunity to mediate the dispute prior to an arbitration hearing. · All parties will be mailed a list of potential hearing panellists. Parties may challenge the qualifications of any potential member for cause which may include the following reasons: a) is related by blood or marriage to either Complainant(s) or
Respondents(s); b) is an employer, partner, employee or in any way associated in business with either party; c) is a party; or d) knows of any reason which may prevent them from rendering an impartial decision. · Since California Law requires a disclosure statement on arbitrators regarding their previous decisions on arbitrations involving the same parties and REALTOR® Associations' hearing processes are confidential, the parties will receive a panellist arbitration waiver agreement to sign. In the absence of a signed waiver agreement, the parties will receive disclosure statements from the panellists assigned to the hearing panel. · Complainant(s) and Respondent(s) will be notified in writing at least twenty-one
(21) days in advance of the time, date, place of the hearing and any other relevant information necessary to the hearing. · All parties may be represented by legal counsel. The Association and the other parties must receive notice of intent to be represented by legal counsel at least fifteen (15) days prior to the hearing. Failure to give adequate notice may result in the continuance of the hearing and a continuance fee imposed against the party failing to give adequate notice. · It is
the responsibility of each party to arrange for their witnesses to be present at the time and place designated for the hearing. Parties are responsible to bring with them all evidence and written documents pertinent to the arbitration. · Hearings will be conducted in the English language. Interpreters are allowed to assist any party or witness at the hearing. Arrangements for having an interpreter present is the responsibility of the party requiring such service and the cost for the same shall be paid by that party. · The hearing will be videotaped and a DVD copy of the
hearing will available to the complainant(s) or respondent(s) only for the purposes of requesting a review at the cost of $50 per DVD. · Once a hearing date is set, it will not be rescheduled unless the complainant or the respondent (parties to the disciplinary hearing) requesting a new date files a written request for a continuance and can demonstrate good cause for granting the continuance. The fee for the first request for continuance of a hearing is $75 and the fee for a second continuance to the same party will be $200 with the fee continuing to double hereafter of each request by the same party.
The Hearing
· Each party will be given the opportunity of making an opening statement. If the respondent wishes to wait until the conclusion of the complainant's evidence, that will be permitted.
· All parties may present any documents, evidence, or give such testimony they feel is relevant and applicable to the matter being heard. Any objections regarding relevance or appropriateness will be determined by the Presiding Officer and/or Hearing Panel.
· No testimony will be allowed relating to the character or general reputation of anyone, unless such testimony has a direct bearing on the matter being heard.
· At the conclusion of a party's witness testifying, the other parties will be given an
opportunity to cross-examine the witness.
· Witnesses, except for those with a vested financial interest in the outcome of the matter, may only be present during the hearing while testifying and will be excused from the hearing room after giving testimony.
· Members of the hearing Panel may question the parties and their witnesses at anytime during the hearing.
· Upon completion of the presentation of evidence and testimony, each party will be given an opportunity to make a closing statement. Usually, the complainant will
be first followed by the respondent.
· The hearing will be videotaped by the Association. A DVD copy will be made
available to the parties for purchase at a cost of $50 per DVD, but only for the purpose of filing a review with the Association's Board of Directors. Parties may not tape record the hearing
· The hearing and decision is confidential. All parties to the hearing have an obligation to maintain and protect this confidentiality. Only disclosure required by law and a party disclosing the results of the matter where the party is involved in a civil proceeding involving the same set of facts or circumstances are exceptions to this rule of confidentiality. The Hearing panel is not bound by formal rules of
evidence as may be applied in a court of law. The Panel has broad discretion regarding the evidence and testimony to make a decision that is fair to all parties.
After the Hearing
· All parties will be noticed of the hearing panel's award as soon as practicable. The decision is binding on all parties and there are no findings of fact. It is a breach of confidentiality to discuss the matter of how the award was fashioned
with the panellists.
· A party has the right to request a procedural review of the arbitration award by the Board of Directors only on the basis that there were alleged procedural deficiencies in the processing or hearing of the arbitration. The parties may have legal counsel present at the review.
· The Directors at a review will only consider those issues raised by the parties in their request for review. They will not re-hear all the facts and no new evidence will be permitted. And the Directors only have to the power to confirm the award or send it back for a new hearing; they cannot modify the award.
· The Association cannot enforce an arbitration award. If a party refuses to abide
by an award, the award recipient will need to seek judicial enforcement.
Role of Association Staff
The Association's paid professional staff members are not licensed REALTORS® or lawyers. The Professional Standards Coordinator is responsible for ensuring
that the professional standards process of paperwork administration, notifications,
correspondence, and maintenance of the confidential case files is done in a timely and efficient manner according to the policies and procedures set forth in the California and National Association of REALTORS® Professional Standards manuals. The staff is not allowed to dispense legal advice or counsel you on your case. The entire arbitration complaint process usually takes a minimum of 75 days but may take longer. It is the ultimate duty of staff to ensure due process to all parties. You can assist staff by making sure that additional requests for information and any pertinent deadlines in the process are responded to in a timely manner.
Citation System
In an ongoing effort to increase professionalism in the marketplace for our
Membership, streamline the ethics hearing process and protect the interests of the general public, SAR adopted the C.A.R. Citation System for Code of Ethics violations SAR's Professional Standards and Grievance Committees are charged with upholding the highest principles of the Association and ensuring that Members adhere to the REALTOR® Code of Ethics. Over the years, Members have sought ways to avoid time consuming ethics complaint filings and hearings. In response to a similar complaint by Associations throughout the state, C.A.R. introduced a new citation system. SAR and its regional partners, the El Dorado, Placer and Yolo County Associations of REALTORS®, all adopted this Citation System effective
January 1, 2009.
How the Citation System Works
Business conduct violating some articles in the REALTOR® Code of Ethics could
be subject to a citation or fine. The Association's Grievance Committee or a
subcommittee of the Grievance Committee will decide whether the conduct in any ethics complaint received by the Association is subject to a citation/fine. If the Grievance Committee decides the conduct is a citable offense, the following will occur:
- The violator will be notified (as will the violator's broker) and he/she will have10 days to pay the cited fine or request an ethics hearing.
- If no response is received after ten (10) days, a warning letter will be issued. If there is no response to the warning letter within another ten (10) days, the matter will be forwarded for a full ethics hearing, with possible amendments by the Grievance Committee.
- Only three (3) citations may be issued to a violator within a three (3) year period; subsequent potential violations would be sent directly to an ethics hearing.
- The fee structure is: $250 for the first citation, $500 for the second citation and $1,000 for the third citation. On the first citation only, the violator may attend live Code of Ethics training to be completed within 90 days, after which the violator would receive a refund of $200 of the $250 fine paid.
Articles and Behavior Which are Citable
Article 3:
· Attempt to change offer of compensation after being made aware of signed offer to purchase · Failure to disclose existence of dual or variable rate commission · Failure to disclose existence of accepted offers to cooperating brokers
Article 4:
· Failure to disclose REALTOR® interest in property being bought or sold
Article 5:
· Providing professional service without disclosing interest in property
Article 6:
· Accepting any commission, rebate or profit on expenditures without client's
knowledge or consent
Article 12:
· Failure to present a true picture in real estate communications and advertising · Failure to disclose professional status in advertising and other representations · Failure to disclose compensation from 3rd party for services provided free to a client · Advertisement offering to sell/lease property without authority of owner or listing broker · Failure to disclose name of firm in advertisement for listed property · Failure to disclose status as both owner/landlord and REALTOR® or licensee when advertising property in which REALTOR® has ownership interest · Falsely
claiming to have “sold” property · Registration or use of deceptive URL or domain name
Article 14:
· Failure to cooperate in any professional standards proceeding or investigation
Article 16:
· Use of terms of an offer to modify listing broker's offer of compensation · Placement of for sale/lease sign on property without permission of seller/landlord
File A Complaint
General Pro Standards Resources
How to file an Ethics Complaint
Complete, sign and date the Ethics Complaint Form, which you may download and print from this website.
How to file an Ethics Complaint:
Background
The National Association of REALTORS® adopted its Code of Ethics in 1913, imposing duties above and in addition to those imposed by law and regulation. Not all real estate agents are REALTORS®; only those agents who belong to their local Association of REALTORS® may claim this designation. With the REALTOR® designation comes the obligation to abide by the professional
behaviour to clients, customers, other members of the public and fellow real
estate professionals detailed in the Code of Ethics. It is because of this obligation to the Code of Ethics that you may file a complaint with the Association. To determine whether an agent is a REALTOR®, please call the
Association for verification or check the Association Directory. Many difficulties between real estate professionals may result from misunderstandings or miscommunications. Therefore, before filing a complaint, it is recommended that you speak with your real estate professional
and/or with the principal broker of the firm prior to filing a complaint. Differences may often be resolved by such communication.
Associations of REALTORS® only determine whether the Code of Ethics or association membership duties have been violated, not whether the law or real estate regulations have been broken. When broken laws or regulations are suspected or when the real estate professional is not a REALTOR®, you may need to contact the California Department of Real Estate (916-227-0864) or
the courts. And if litigation is being pursued by the complainant, the Association will usually not proceed with the ethics complaint until the litigation has concluded.
For violations of the Code of Ethics, the association may discipline its REALTOR® members. Such discipline may involve letters of warning or reprimand, require appropriate education relevant to the violation, impose fines and/or suspend or terminate association membership for serious or repeated violations. The Association may not require REALTORS® to pay the complainant(s) monetary or punitive damages and cannot revoke a real estate license.
Filing An Ethics Complaint
To file a complaint you must:
- Complete, sign and date the Ethics Complaint Form, which you may download and print from this website. (Ethics complaints must be filed with the Association within 180 days of the time the complainant knew-- or reasonably should have known—that potentially unethical conduct took place).
- Check the Article(s) of the Code of Ethics believed violated. The articles are illustrated through Standards of Practice, but the Standard of Practice may only be used as support for the Article(s) being charged. The Article number(s) must be cited.
- Include a narrative description of the circumstances and facts surrounding the complaint, being as specific as possible.
- Attach copies of all relevant documents such as listing and sales contracts, letters etc. labelling these as Exhibit 1, etc.
- Make 12 copies of the complaint package and forward it to the Professional Standards Coordinator of the Association which has jurisdiction over the complainant.
Before a Hearing
- Your complaint will be referred to the Association's Grievance Committee. This committee is similar to a Grand Jury. It does not determine innocence or guilt. The committee's job is to review ethics complaints to determine if the allegations made and taken as true, might support a violation of the Article(s) cited in the complaint. The Committee may: 1) refer the complaint to a Professional Standards disciplinary hearing, 2) dismiss the complaint 3) amend the complaint by deleting or adding Article(s) of the Code of Ethics 4) postpone its decision to await more information from the complainant of 5) determine that the offense is a citable offense for which a citation/fine will be issued (see information under "Citation System").
- In the event the Grievance Committee dismisses the entire complaint or deletes Articles(s), the Complainant may request that the Directors of the Association review the Committee's decision. The Directors may either uphold or overturn the Grievance Committee's decision.The Complainant does not have the right to be present at the Directors' review. There is no other type of review of the Grievance Committee's decision.
- If the complaint is referred to a disciplinary hearing, the Respondent(s) will be mailed a copy of the Complaint. A response is due within fifteen (15) days of the date the complaint is mailed. Complainant(s) will be mailed a copy of the response. Complainant(s) and Respondent(s) are given a list of potential panellists and may challenge the qualifications of any potential member for cause.
- Panel members may be excused for any of the following reasons: a) is related by blood or marriage to either Complainant(s) or Respondent(s); b) is an employer, partner, employee or in any way associated in business with either party; c) is a party; or d) knows of any reason which may prevent them from rendering an impartial decision.
- Complainant(s) and Respondent(s) will be notified in writing at least twenty- one (21) days in advance of the time, date and place of the hearing. Once a hearing date is set, it will not be rescheduled unless the complainant or the respondent (parties to the disciplinary hearing) requesting a new date files a written request for a continuance and can demonstrate good cause for granting the continuance. The fee for the first request for continuance of a hearing is $75 and the fee for a second continuance to the same party will be $200.
The Hearing
It is the ultimate responsibility of the complainant to provide "clear, strong and
convincing" proof of a violation of the Code of Ethics in a hearing. Be sure that you have all the documents and other evidence that you need to present your case. Organize your presentation in advance and be prepared to demonstrate what happened (or didn't happen but should have happened) as it relates to how you believe the Article(s) of the Code of Ethics were violated. And appreciate that panel members are trained, unpaid volunteers with active real estate careers giving their time to determine in a fair, unbiased and impartial manner whether the evidence and testimony presented support a finding of a violation. They, as well as the parties involved, are sworn to confidentiality
regarding the facts surrounding this complaint and hearing.
After the Hearing
- You will receive a "Recommendations of Hearing Panel" and "Findings of Fact", the conclusions of the panel members based on the evidence and testimony presented during the hearing. Findings of fact may not be appealed
- If you feel that the hearing process did not afford you a full and fair hearing, there are appellate procedures available. The finding of no violation is not a basis for appeal.
- The Association will send you information regarding the bases and time limits for appealing decisions or requesting a rehearing.
- Petitions for rehearing’s must be based solely on newly discovered evidence that a party could not, with reasonable diligence, have discovered or presented at the hearing.
- Requests for review brought by ethics respondents must be based on (1) misapplication or misinterpretation of one or more Articles of the Code of Ethics or membership duties (2) procedural deficiency or failure of due process and (3) unwarranted discipline by the hearing panel. Ethics complainants may only appeal based on procedural deficiencies or failures of due process.
Role of Association Staff
The Association's paid professional staff members are not licensed REALTORS® or lawyers. The Professional Standards Coordinator is responsible for ensuring
that the professional standards process of paperwork administration, notifications,
correspondence, and maintenance of the confidential case files is done in a timely
and efficient manner according to the policies and procedures set forth in the California and National Association of REALTORS® Professional Standards manuals. The staff is not allowed to dispense legal advice or counsel you on your case.
The entire ethics process usually takes a minimum of 3 months but may take longer. It is the ultimate duty of staff to ensure due process to all parties. You can assist staff by making sure that additional requests for information and any pertinent deadlines in the process are responded to in a timely manner.
Meditation Services
Car Meditation: The CALIFORNIA ASSOCIATION OF REALTORS® Real Estate
Mediation Center for Consumers provides home buyers and sellers, as well as other parties to real estate transactions, with a highly qualified pool of specially trained, objective and reliable mediation professionals to assist them in resolving their real estate related disputes. Some difficult transactions just need a little help getting back on track. C.A.R.’s Real Estate Mediation Center for Consumers is available to help you and your clients quickly settle their disputes without the time, cost, and uncertainty of litigation.
Why mediate with us? Our mission is to provide consumers with a supportive and
confidential process that, working with the mediator of their choosing, will assist
them to reach a mutually agreeable settlement and to avoid the time, expense and uncertainty of litigation. Our mediators are experienced in mediation and the
issues that commonly arise in real estate disputes. They receive ongoing real estate focused training and support to ensure that they are prepared to efficiently and knowledgeable guide your through the mediation process. To learn more, please visit www.consumermediation.org
