As a Principal Broker, I regularly monitor state and local disciplinary proceeding to keep abreast of any trends or emerging real estate practice areas that are problems I should be aware of for my own company. Fortunately, my local Association (NVAR) has fairly reasonable folks serving on grievance and disciplinary panels. Unfortunately, that's not true in all jurisdictions.
The North Central Board of Realtors (Association) went out of it's way to either make an absurd example or to excessively punish one of their own for an offense that, by their own procedures, merited a much smaller consequence. The Realtor involved had violated some rules the year before and was fined and given a year's probation. Her Broker was fined also for lack of supervision.
Less than a year later, charges of rules violations were again made against this same Realtor. This time, she was alleged to have improperly input two listings into the Association’s multiple listing service (“MLS”) without the seller’s permission. According to the Realtor, the information was input by mistake by an office employee on Thursday and Friday, and the listings were removed on the following Monday after the mistake was discovered.
The Association conducted a hearing into the new allegations and the hearing panel found the Realtor guilty of violating the Association’s rules. She was fined $1500 and suspended 45 days from the MLS. This Realtor was also expelled from the Association and fined $5,000. Further, her expulsion had the effect of not allowing any other member of the brokerage to access the MLS until either the Association reinstated her membership or she left the brokerage.
After the Association upheld the hearing panel’s decision, the Realtor filed a lawsuit against the Association, alleging a denial of due process in the hearing conducted by the Association.
The trial court ruled in the Association's favor. Reason prevailed on appeal. The Court of Appeals of the State of Mississippi reversed the trial court. Looking at existing Mississippi law, the court found that while private organizations are generally free to discipline members who violate prescribed rules of conduct, private organizations must also describe possible punishments which can be imposed for various rules violations, in order to alert the member as to the possible punishments when he/she joins the organization and also avoid arbitrary disciplinary actions by the organization against its members.
The court ruled that the Association had not followed its own rules in disciplining the Realtor and so had acted arbitrarily, causing the court to vacate the discipline imposed on the Realtor by the Association. The Association’s rules require that the seller’s signature be obtained before a listing can go into the MLS. Since she had not obtained the seller’s signature for the listing that she submitted to the MLS, she was subject to the discipline contained in the Association’s rules. While the court found some conflict in the Association’s rules and procedures, the main focus of the Realtor's challenge was Sections 7 and 9 of the Association’s rules.
Section 7 set forth a potential disciplinary path for repeat offenders. Section 7 states that a warning is appropriate discipline for a first offense, and a second offense warrants a fine as well as an appearance by the participant before the MLS Committee. A third offense can result in a $100 fine and 60-day suspension; a fourth offense in a four month period should result in a 60-day suspension....
I am grateful that the Realtor had the tenacity and resources to challenge the egregious treatment by her Association. I hope this ruling will cause other association disciplinary panels to more equitably consider their rulings and responses to Realtor mistakes. Yes, this Realtor made some mistakes and is responsible and accountable for her actions, but there needs to be fairness in applying remedies to acts of real estate that do not conform to published standards.
- What's your take?
- If you serve on a disciplinary panel, what else might you have proposed?
- Is this a more widespread problem with the skills and attitudes of people who serve on grievance and disciplinary panels?
- Rather than who chooses to volunteer, should there be more measured criteria for people who serve on these very important panels?
- Should standards be developed to assess Realtor performance on disciplinary panels that must be reviewed prior to being reappointed for successive terms?
Sorry for the long post, but this is important and affects all of us.
Dave Rosenmarkle
Broker Owner
Highland Realty
Arlington, VA
(703) 538-2566
davidrose@mris.com
www.HighlandAgents.com
;)
;)
Very interesting. I've served on Grievance Committees for some Associations and found that, at that level, the rules are quite carefully followed. I found the members volunteering to be thoughtful and thorough.
What happened to the member in your post appears to be a "linching" of some sort. Apparently, personality and cronism ruled. Associations should not be used to put members out of business and that was clearly the intent of this procedure.
While I disagree that the member "made a mistake", the penalty was clearly overkill and persecution with the intent to put her out of business. To me, a mistake is dialing the wrong telephone number. What this agent did appears to be a deliberate attempt to enter the listing before it could be signed. Everyone knows that rule. If that were not the intent, the "office employee" wouldn't even have had the listing form to enter. Agents are responsible for processing listings and, without a signature, this wasn't even a listing.
Good for her for fighting and winning. But, to what end? Will she continue to "skirt" the rules? Will the Association member who made the original complaint continue to file charges? Will she continue to give her enemies amunition??
Very interesting.