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What happens when Associations don’t comply with the new Core Standards?

(ASSOCIATIONS) If the real estate board you’re a member of is not in compliance with the Core Standards, what happens then!?

core standards

In May 2014, the National Association of REALTORS® (NAR) approved a set of core standards, which were amended two years later, replacing the previous Organizational Standards. Now each year, REALTOR® associations must prove compliance or risk losing their charters.

Grants were extended through June 30, 2016 for mergers taking place after the adoption of the new standards. Further extensions were offered to the first 25 mergers that occurred after the June compliance cycle, with a third cycle running through December 31 of this year. But what happens if associations still don’t meet the new standards?

Enforcement is up to the local, state, territorial, and National Association. So basically, everyone. According to Sara Wiskerchen, NAR’s Managing Director of Media Communications, there is an appeal hearing process if compliance isn’t reached by the new deadline. If the hearing determines compliance is completely unachievable, the applicable association will lose their charter.

Since the adoption of the new standards, only 16 charters have been revoked. More than one revocation proves this program was necessary in the first place. The new standards are simple enough. Associations must meet or exceed core standards in six categories:

  1. Code of Ethics
  2. Advocacy
  3. Consumer Outreach
  4. Unification Efforts and Support of the REALTOR® Organization
  5. Technology
  6. Financial Solvency

Each category is further outlined on NAR’s site, with more detailed information about compliance. Every association is responsible for maintaining and enforcing a code of ethics, as well as providing mediation services as required, and issue citations. For advocacy, associations are encouraged to contribute to NAR RPAC funds (unless prohibited by state law), and participate in NAR Calls for Action efforts.

Consumer outreach requires at least four “meaningful consumer engagement activities” per year, with at least two demonstrating the association is a “Voice for Real Estate” in their market, and two specifically related to investment in local communities. Repeating the same activity four times will not count, nor will financial contributions to charities without further participation in the charity’s activities.

Unification efforts essentially state that associations must follow all applicable laws, and need to offer professional development opportunities. Leadership is required to complete at least six hours of REALTOR® association professional development annually. Additionally, associations
with paid staff must conduct annual performance reviews of their chief of staff.

The technology standard merely stipulates associations need to exist in this decade, providing an interactive website that includes state-of-the art features. Just kidding, they’re only required to have active links to products, services, standards, filling processes, and member programs. Oh, and the really tough part of this one is that members must have email or some other internet based communication.

Lastly, the financial solvency core specifies associations must ensure their fiscal integrity, report to CPA as necessary based on revenue, and get permission from NAR to file bankruptcy. If an association files for bankruptcy, that’s an automatic charter review.

“While some associations can meet these easily, smaller organizations might struggle with acquiring resources to complete all six segments.”

Fortunately for those that might be struggling, NAR provides Association Merger Procedures to assess if a merger would best fit member’s needs. NAR also suggests utilizing shared services for those anticipating difficulty, which help associations expand services and implement strategic partnerships to meet core standards.

If these steps don’t help, associations not in compliance by the end of the year will be subject to an appeal hearing, which includes a panel of at least five members of the NAR Association Executive Committee. The panel will report their recommendation to the Board of Directors, who will determine if the charter should be revoked.

According to NAR, the new standards are meant to “raise the bar for REALTOR® associations and ensure high-quality service for REALTORS®.” There are plenty of chances for associations to reach compliance before endangering their charters. Although it truly is a wonder that only 16 have been revoked so far, here’s to hoping everyone will be able to meet the new standards by the deadline to improve service across the board.

Written By

Lindsay is an editor for The American Genius with a Communication Studies degree and English minor from Southwestern University. Lindsay is interested in social interactions across and through various media, particularly television, and will gladly hyper-analyze cartoons and comics with anyone, cats included.

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