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Contested Application Procedures for New Board Formation and/or Release of Jurisdiction

The following procedures are used by the Membership Policy and Board Jurisdiction Committee to process applications for new board status or applications for change of jurisdiction when the requested territory is presently assigned to another board and the board is unwilling to voluntarily release the territory.

The size of a member board of REALTORS®, geographic considerations, or changing market conditions within the jurisdiction of an existing board may:

  • lead certain individuals to desire the formation of a new member board partially within the currently assigned jurisdiction of an existing board
  • lead an existing board to desire a change of jurisdiction affecting another existing board

Procedure for Processing an Application for the Creation of a New Association of REALTORS® or for Change of Jurisdiction Affecting Jurisdiction of an Existing Association of REALTORS®

1) Request for Assigned Territory

The subject of forming a new association or seeking any territorial jurisdiction currently assigned to an existing association should be thoroughly discussed and considered by or with the existing association's officers, directors, and members.

To make such considerations and the ultimate decision a matter of record, an applicant group or an association interested in acquiring territorial jurisdiction currently assigned to another association must direct the request, in writing, to the board of directors of the affected association (“respondent”) and ask that the association consider the request and respond in writing with a decision. The applicant association (“applicant”) must copy the state association and the NAR Member Experience Team (NARPolicyQuestions@nar.realtor) on their request. Service of any communication in this policy may be by email.

When a request is made to an association for voluntary release of some of its currently assigned territory, the respondent association has thirty (30) days to respond.

Response to Request for Assigned Territory:

Acceptance of Request by Existing Association

When a request to an existing association is made for the release of territorial jurisdiction for the formation of a new association, or for reassignment to another association, and the respondent association agrees to voluntarily relinquish a portion of its currently assigned territorial jurisdiction, the applicant association seeking such reassignment may then proceed with its application pursuant to the Procedure for Changing an Association’s Jurisdiction.

Refusal of Request by Existing Association

If the respondent association responds in the negative, refusing the request and refusing to relinquish any of its territory, or if it does not reply in writing within thirty (30) days from receipt of the request (whichever is later), then the applicant association may proceed as provided below. The applicant association may not proceed with the application process until after the respondent association has responded negatively to the request for release of a portion of the association's territory or has failed to reply within thirty (30) days from date of receipt of the written request.

A contested application, as described above, will not be received or considered if, within a period of four (4) years prior to the date of such application, the National Association had denied an application involving substantially the same territorial jurisdiction after processing such application under this procedure or if the requested territorial jurisdiction was subject to an association merger within the last two (2) years.

2) Application for Assigned Territory

Any application for the establishment of an association of REALTORS® or for a change of jurisdiction affecting the jurisdiction of the respondent association is required to include a written statement setting forth, with reasonable detail, an explanation of the geography of the contested area and its relation to their association, the ultimate facts the applicant association allege to be the basis upon which the application should be granted, together with all documents, affidavits, exhibits, and evidence upon which said applicant association intends to rely.

  • The application and all of the supporting documents shall be furnished simultaneously by the applicant association to the National Association, the state association and to the respondent association.
  • The application must be filed within thirty (30) days after the respondent association has responded negatively to the request for voluntary release of a portion of its present jurisdiction or has failed to reply within thirty (30) days from date of receipt of the written request.
  • Submission of an application indicates the applicant association wishes to request a hearing on its application. The applicant and respondent associations will have the opportunity to appear before a hearing panel of the National Association’s Membership Policy and Board Jurisdiction Committee to present the respective positions. Following receipt of Response by Affected Association, the National Association shall provide the applicant association and respondent association with notice and instructions on NAR sponsored mediation.

3) Response by Affected Association

  • Within thirty (30) days after application is submitted, the respondent association shall answer said application. Said response shall specify, in reasonable detail, an explanation of the geography of the contested area and its relation to their association, the basis or bases for the objection and must include all documents or other evidence upon which the respondent association intends to rely. 
  • The response and all supporting documents shall be furnished simultaneously by the respondent to the state association, the National Association and the applicant association.

Mediation

  • Following receipt of Response by Affected Association, the National Association shall provide the applicant association and respondent association with notice and instructions on NAR sponsored mediation. Mediation is mandatory. A mutually convenient time shall be established for the mediation within two (2) weeks of receipt of Response by Affected Association and mediation will occur within 60 days of receipt of Response by Affected Association. Mediation may be conducted using video conferencing services. If the applicant association is unavailable or refuses to mediate, it will result in the application being withdrawn. If the respondent association is unavailable or refuses to mediate, it will result in the association voluntarily relinquishing the requested territory.

    A mediator shall be selected from a pool of former or current members of the Membership Policy and Board Jurisdiction Committee identified by the Chair who have completed NAR’s Mediator/Mediation Training Seminar or similar mediation training. If the matter is not resolved via mediation, a hearing will be scheduled.

    This does not preclude associations from continuing efforts locally or through their state association to resolve the dispute.

Additional Written Arguments

All parties will have the opportunity to submit only new additional written arguments and documentation approximately fourteen (14) days prior to any scheduled hearing.

Guidelines Regarding Submission of Written Materials

  • The application, response, and additional written arguments should contain only that information relevant to the National Association's consideration of the dispute.
  • The written materials should speak to the criteria established in this procedure, as this is the criteria utilized by the National Association in evaluating jurisdictional disputes.
  • Parties to the dispute should make every effort to avoid submitting information that is extraneous or irrelevant.
  • The National Association will supply all parties and panelists with the membership numbers (primary/secondary) by home address and by office address in the contested area.

Hearings Before the Membership Policy and Board Jurisdiction Committee

  • The duration, nature, scope, and conduct of any hearing is within the sole discretion of the committee.
  • Hearings are held in conjunction with the regularly scheduled business meetings of the National Association. Hearings may also be scheduled outside of the regularly scheduled NAR business meetings using video conferencing services. NAR’s Member Experience team will advise the parties of the date, time, location and procedures for the hearing.
  • All parties have the right to be represented by legal counsel. In the event parties do not give fifteen days’ notice prior to the hearing of their intention to have counsel at the hearing to the National Association and all other parties, including counsel’s name, the hearing will be rescheduled within 45 days of the original hearing date unless the other party agrees to move forward with the original hearing date. Speakers shall be limited to current association members, association staff and legal counsel.
  • All filings or other documents required under this procedure which are not filed within the time limits prescribed herein will constitute a waiver of the right to use those filings or other documents at the hearing, unless the other party agrees to allow the filing or other documents.
  • Hearings are not “legal” proceedings or “trials” and are not subject to the customary rules applicable to judicial proceedings such as rules of evidence or cross examination of the other associations’ presenters.

The Hearing Panel's Decision

The decision of the hearing panel regarding reassignment of territory from one existing association to another existing association is final, except that the Board of Directors may require a new hearing before a different panel of the committee if it determines the procedures failed to provide due process. See the process for parties to request a procedural review.

The decision of the hearing panel regarding a new association application must be submitted to the Board of Directors where the final decision is made.

Criteria for Evaluating a Contested Application for Charter Status as a Member Association or for Change of Jurisdiction Affecting Jurisdiction of an Existing Association

(As applicable, these criteria also are to be used when evaluating any jurisdictional dispute among existing member associations of REALTORS®.)

The burden of proof is upon the applicant association to establish its right to some portion of the jurisdiction presently assigned to the respondent association. Therefore, the criteria should be a list of items by which to measure the performance of the respondent association and by which to measure the abilities of the applicant association to fulfill the obligations of its application.

Included in each of the following sections is a list of questions that are typical, but not all-inclusive of what a hearing panel considers during deliberations.

Ability to serve the public

  • What is the association's level of participation in civic and real estate projects throughout its jurisdiction?
  • How does the association represent real estate interests throughout its jurisdiction?
  • To what extent does the association provide comprehensive services to the public?

Ability to serve members

  • What is the association's geographic size (in miles)?
  • What is the geographic size (in miles) of the requested territory?
  • What is the membership size of the association (REALTORS® and REALTOR-ASSOCIATE®s)?
  • How many nonmember licensees (brokers, salespersons and non-principal licensed or certified appraisers) are affiliated with the designated REALTOR® members of the association?
  • Does the association have an executive officer?
  • Does the association conduct regularly scheduled membership meetings?
  • Does the association have an indoctrination program?
  • Does the association maintain a association-owned multiple listing service or participate in a regional multiple listing service?
  • Does the association conduct educational programs?
  • Does the association have a communication process in place (e.g., monthly newsletter, magazine, etc.)?
  • What are other services the association offers to its members?

Ability to enforce the Code of Ethics

  • Does the association have a properly constituted grievance committee and professional standards committee or does the association participate in an interboard or regional professional standards agreement? Does the association carefully adhere to the procedures set forth in the association's Code of Ethics and Arbitration Manual?
  • Does the association provide education and training on the subject of the Code of Ethics?
  • What is the typical processing time for ethics complaints and requests for arbitration?

Ability to safeguard the term REALTOR®

  • Does the association disseminate guidelines for proper use of the term?
  • What is the nature and extent of the program that identifies instances of improper use of the term?
  • What action is taken to prevent misuse of the term?

Compliance with National Association of REALTORS® policy

  • Does the association adhere to NAR policy?
  • Has the association met Core Standards?

Response to changing market area

  • Is the association fragmented into different market areas? Please describe these areas.
  • Are there natural boundaries separating two associations or separating the contested area from either association (e.g., rivers, lakes, mountain range, etc.)?
  • Is the contested area viewed as being more closely aligned with one association than the other because of boundaries such as political districts, school districts, area codes, etc.?
  • What type of real estate comprises the contested area?
  • Does this differ from the basic make up of the remaining association territory?

Advocacy

  • What Vote, Act and Invest activities (as defined in NAR’s Core Standards) have been conducted by the association?
  • Does the association meet the RPAC Fundraising Goals set annually by the National Association?
  • Does the association have a Governmental Affairs Director, other association staff or a REALTOR® volunteer member who fulfills this function?
  • Does the association participate in State and National Calls for Action?
  • Does the association communicate to members the value of RPAC (provide examples)?
  • Does the association use REALTOR® Party Grant Programs?
  • Does the association sponsor RPAC Fundraising Events?
  • Does the association participate in local fair housing initiatives?
  • Provide other examples of advocacy initiatives.

In addition to the criteria established above, the committee also considers the following criteria, to the extent they are applicable.

  • Do a majority of the REALTORS® (principals) in the requested area support the petition of the applicant group or association?
  • Do a majority of the REALTORS® and REALTOR-ASSOCIATE®s (other than principals) in the requested area support the petition of the applicant group or association?
  • Do the petitioners have sufficient members and financial resources to conduct the activities and programs required of a member association of the National Association of REALTORS®?
  • What effect will the release of the contested territory have on the existing association?

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