California Code of Ethics and Arbitration Manual - January 1, 2021
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California Code of Ethics and
Arbitration Manual
January 1, 2021
Prepared by the
CALIFORNIA ASSOCIATION OF REALTORS®
Corporate Legal Department
525 South Virgil Avenue
Los Angeles, CA 90020Introduction
The California Code of Ethics and Arbitration Manual (“Manual”) is designed and intended for use by
Member Associations of the California Association of REALTORS ® (“C.A.R.”) for administration of professional
standards matters. The Manual is drafted to be in compliance with the applicable policies of the National Association
of REALTORS® and California state law. If a Member Association desires to adopt a different set of rules for
administration of professional standards or desires to change the model provisions contained herein, it is recommended
that the Member Association have such rules and procedures reviewed by legal counsel and approved by NAR prior
to actual use.
Changes to this Manual
From time to time C.A.R. updates this Manual to comply with changes in NAR policies or California law.
All substantive changes to the Manual from the last edition have been made and shown in red underlined typeface.
Some of the major changes to the Manual for 2021 are as follows:
1. To conform with NAR Policy, the definition of a “public trust” violation has been changed in Sections 1(n)
and 39(i).
2. The following sentence has been added to Section 3(c) to reference the new Guidelines for Disciplining
Designated REALTORS® and Brokers, which is incorporated into the Manual pursuant to a motion passed
by the C.A.R. Board of Directors in October 2020: “Panels should refer to Form D-15 for guidance on
when it is appropriate to discipline a Designated REALTOR® based on the actions of a member employed
by or affiliated with the Designated REALTOR®.
3. Extensive additions have been made to Section 8 to incorporate the new citation reconsideration procedure
for MLS Citations. This policy is being incorporated into the Manual pursuant to a motion passed by the
C.A.R. Board of Directors in October 2020.
4. The following sentence has been added to Sections 19(f) and 55(f) to clarify inappropriate bases for
challenging potential panel members: “A party shall not have the right to request disqualification of a
member of a hearing Panel solely on the basis of the panelist’s race, color, religion, sex, handicap, familial
status, national origin, sexual orientation, or gender identity.”
5. To conform with NAR Policy, Section 21(c) has been added to explain the role of the complainant’s
Designated REALTOR® in a disciplinary hearing.
6. To conform with NAR Policy, the following sentence has been added to Section 24(f): “If the Grievance
Committee determines that a membership or MLS duty should be added to the complaint, the Grievance
Committee must provide a description of the facts upon which the additional allegations are based.”
7. To conform with NAR Policy, the following sentence has been added to Sections 28(i) and 56(n):“Absent a
compelling reason, the Association Executive may require that the hearing be conducted virtually using a
virtual meeting platform such as Zoom or any other similar service.
8. Language was added in several places to clarify that C.A.R. does not review and cannot overturn the
decisions of local association directors in professional standards proceedings.
9. In Section 54(a), language was added to clarify that a REALTOR ® representative substituting for the
broker at an arbitration must be affiliated with the broker’s firm.
10. In Section 56(a), the following sentence was added to clarify already-existing policy: “In order to file for
mediation, a complainant must also fill out and file the PA-1 or A-1 Form.”
Questions
C.A.R. provides this Manual as a member service to Member Associations. In addition, the C.A.R. provides
advice to Member Associations regarding the interpretation and application of the Manual. Any questions from
Member Associations regarding this Manual can be directed to the C.A.R. Corporate Legal Department at (213) 739-
8381.C O N T E N T S
PART ONE – ASSOCIATION DISCIPLINARY PROCEEDINGS ........................................ 1
Section 1. Definitions..................................................................................................... 1
Section 2. Duties of Membership................................................................................... 3
Section 3. Power to Take Disciplinary Action Against an Association Member .......... 3
Section 4. Duties of MLS Participants and Subscribers ................................................ 4
Section 5. Power to Take Disciplinary Action Against an MLS Participant or
Subscriber ................................................................................................... 4
Section 6. Nature of Discipline Against an Association Member ................................. 4
Section 7. Nature of Discipline Against an MLS Participant or Subscriber .................. 5
Section 8. Citations ........................................................................................................ 6
Section 9. Grievance Committee ................................................................................... 8
Section 10. Professional Standards Committee ............................................................. 8
Section 11. Multi-Association Professional Standards Hearings and Shared Panelists 8
Section 12. Interpretation of Bylaws ............................................................................. 8
Section 13. Notices ........................................................................................................ 9
Section 14. Waiver; Copyright Representation and Indemnification Agreement for
Photos.......................................................................................................... 9
Section 15. Communication and Clerical ...................................................................... 9
Section 16. Attempts to Influence Panel ...................................................................... 10
Section 17. Confidentiality of Proceedings ................................................................. 10
Section 18. Right to Counsel/Other Representation .................................................... 11
Section 19. Qualification for Panel .............................................................................. 12
Section 20. Filing a Complaint .................................................................................... 13
Section 21. Role of Designated REALTOR® in an Ethics Hearing ............................ 13
Section 22. MLS Participant as a Respondent in an MLS Rules Hearing ................... 14
Section 23. Joinder of Multiple Parties or Complaints ................................................ 14
Section 24. Action of the Grievance Committee ......................................................... 14
Section 25. Review of Grievance Committee Decision............................................... 16
Section 26. Withdrawal of Complaint ......................................................................... 16
Section 27. Amendment of Complaint......................................................................... 17
Section 28. Initiating a Disciplinary Hearing .............................................................. 17
Section 29. Duty to Give Evidence .............................................................................. 19
Section 30. Witnesses .................................................................................................. 19
Section 31. Continuances ............................................................................................. 19
Section 32. Continuance Fees ...................................................................................... 19
Section 33. The Hearing .............................................................................................. 20
Section 34. Transcript/Right to Record ....................................................................... 21
Section 35. Interpreters and Translators ....................................................................... 21
Section 36. Decision of Hearing Panel ........................................................................ 22
Section 37. Action of the Directors if No Request for Review ................................... 22
Section 38. Action of Directors if Request for Review ............................................... 23Section 39. Distribution and Publication after Discipline is Final............................... 26
Section 40. Preliminary Judicial Determination .......................................................... 28
PART TWO – ARBITRATION OF DISPUTES ...................................................................... 28
Section 41. Definitions................................................................................................. 28
Section 42. Association Member’s Duty and Privilege to Arbitrate ........................... 29
Section 43. MLS Participant’s and Subscriber’s Duty and Privilege to Arbitrate....... 30
Section 44. Association’s Right to Decline Arbitration............................................... 30
Section 45. Duty to Arbitrate Before C.A.R. ............................................................... 31
Section 46. Professional Standards Committee ........................................................... 31
Section 47. Multi-Association Professional Standards Hearings and Shared Panelists
................................................................................................................... 31
Section 48. Interpretation of Bylaws ........................................................................... 32
Section 49. Notices ...................................................................................................... 32
Section 50. Waiver ....................................................................................................... 32
Section 51. Communication and Clerical .................................................................... 32
Section 52. Attempts to Influence Hearing Panel ........................................................ 33
Section 53. Confidentiality of Proceedings ................................................................. 33
Section 54. Right to Counsel ....................................................................................... 33
Section 55. Qualification for Panel .............................................................................. 34
Section 56. Manner of Invoking Arbitration and Submission ..................................... 35
Section 57. Responsible Broker as Complainant ......................................................... 37
Section 58. Joinder of Multiple Parties or Complaints ................................................ 38
Section 59. Duty to Give Evidence .............................................................................. 38
Section 60. Subpoenas ................................................................................................. 38
Section 61. Witnesses .................................................................................................. 38
Section 62. Right to Demand Witness Lists ................................................................ 39
Section 63. Continuances ............................................................................................. 39
Section 64. Continuance Fees ...................................................................................... 39
Section 65. Arbitration Hearing ................................................................................... 39
Section 66. Transcript/Right to Record ....................................................................... 40
Section 67. Interpreters and Translators ....................................................................... 41
Section 68. Costs of Arbitration................................................................................... 41
Section 69. Settlement ................................................................................................. 42
Section 70. The Award ................................................................................................ 42
Section 71. Request for Procedural Review by the Directors ...................................... 42
Section 72. Enforcement .............................................................................................. 43
iiiPART ONE – ASSOCIATION reinstatement to membership only by
DISCIPLINARY PROCEEDINGS application as a new member after the end of
the period of expulsion, with the application
Section 1. Definitions considered on its merits.
As used herein, (h) "Expulsion from MLS" means
expulsion from all privileges and services of
(a) "Association" means the local the MLS on terms and conditions expressly
Board or Association of REALTORS® and stated for a period of time not less than one
any other Association of REALTORS® to (1) year, but not more than three (3) years.
which the Member belongs, including Expulsion from all privileges and services of
California Association of REALTORS® the MLS shall include, but is not limited to,
(“C.A.R.”). the ability to submit listings to the MLS,
retain current listings in the MLS data base,
(b) "Association Executive" means use computer terminals, receive MLS
the chief staff executive of the Association or Compilations or comparable materials.
his or her designee, or the elected Secretary Reinstatement to MLS services as a full
of any Association not having a chief staff Participant or Subscriber shall be by
executive. application as a new MLS participant or
Subscriber after the end of the period of
(c) “Complainant” means the person expulsion, with the application considered on
who has a grievance against the respondent its merits.
and who files a disciplinary complaint. In
some cases the Association Grievance (i) “Fine” means an appropriate and
Committee is the complainant. reasonable fine commensurate with the
gravity of the determined violation of the
(d) "Designated REALTOR®" means N.A.R. Code of Ethics or any other
the member designated in Association membership duty, not to exceed $15,000 per
records to be responsible for the conduct of party, per hearing, for an ethics violation or
individuals affiliated with the office(s) and REALTOR® membership duty, and not to
accountable to the Association for all duties exceed $15,000 per party, per hearing, for
and obligations of membership. violation of an MLS Rule or MLS
membership duty, and in each case the fine is
(e) "Directors" means the Board of payable to the Association.
Directors of the Association or appropriate
body appointed by the Board of Directors (j) "Member" means a REALTOR®,
when considering professional standards or or REALTOR-ASSOCIATE® member of the
MLS rules matters covered in this Manual. Association, whether primary or secondary.
(f) "Disciplinary hearing" refers to an (k) "Panel" means the members of a
ethics hearing or other membership Grievance Committee when serving in a
obligation hearing relating to disciplinary given case, a hearing panel in a Disciplinary
matters or to an MLS rules violation hearing hearing as defined in subsection (f) above, or
to determine whether a violation of the MLS a review panel of the Directors as defined in
rules occurred. subsection (e) above when considering
professional standards or MLS rules matters
(g) "Expulsion from Membership" covered in this Manual.
means expulsion from membership in the
Association for a period of not less than one (l) "Participant" means any
(1), but not more than three (3) years, with individual defined in the MLS rules and
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 1regulations of the Association as a (s) "Responsible Broker" means the
Participant. broker designated in the records of the
Department of Real Estate to be responsible
(m) "Party" means the for the conduct of individuals affiliated with
complainant(s) or respondent(s) to any his or her office(s) or licensed or certified
disciplinary proceeding referred to in Part individuals who are sole proprietors,
One of this Manual. partners, officers, or shareholders of a
corporation, or office managers acting on
(n) “Public trust” violation means behalf of principals of a real estate firm who
demonstrated misappropriation of client or are authorized to bind the principals in
customer funds or property, discrimination arbitration.
against the protected classes under the Code
of Ethics, or fraud. (t) "Subscriber" means any
individual defined in the MLS rules and
(o) “Remediable violations” means regulations of the Association as a
those violations that can be corrected by the Subscriber.
member, such as failure to complete
mandatory training, nonpayment of fees, or (u) "Suspension of Membership"
other curable violations. means suspension of all Association
membership rights and privileges, and denial
(p) “Reprimand” means a "Letter of of Association services, on terms and
Reprimand," which is a letter from the conditions expressly stated for a period of
Association to an Association member or time not less than thirty (30) calendar and not
MLS Participant or Subscriber, advising of a more than one (1) year, including, but not
lack of professional conduct or a violation of limited to, use of the terms REALTOR® and
MLS rules determined by a "due process" REALTOR-ASSOCIATE®, with
hearing by a hearing Panel, and advising that reinstatement as a member in good standing
the letter is to be construed as an official automatically provided at the end of the
reprimand. specified period. In the event the suspension
is for a remediable violation (as defined in
(q) "Requirement for Ethics Section 1(o)), the suspension is in effect for
Training" means a letter from the Association the period that the violation remains
President or Professional Standards uncorrected, and the minimum and maximum
Committee Chairperson to an Association time limits for suspension do not apply.
Member, MLS Participant or Subscriber, Resignation prior to a member complying
advising of a lack of professional conduct or with sanctions imposed for violation of the
a violation of MLS rules determined by a Code of Ethics shall automatically be deemed
"due process" hearing by a hearing Panel and a suspension.
directing the person to attend the applicable
ethics portion of the Association (v) "Suspension of MLS" means
indoctrination course or other appropriate suspension of all privileges and services of
ethics course, MLS orientation or seminar, or the MLS on terms and conditions expressly
other appropriate course specified by the stated for a period of time not less than thirty
hearing Panel. (30) calendar days and not more than one (1)
year. Suspension of all privileges and
(r) “Respondent” means the services of the MLS shall include, but is not
REALTOR® or MLS member against whom limited to, the ability to submit listings to the
a complaint is filed and who must defend MLS, retain current listings in the MLS data
themselves in a disciplinary hearing. base, use computer terminals, receive MLS
Compilations or comparable materials.
Reinstatement as a full Participant or
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 2Subscriber shall be automatic at the end of (a) Membership Duty; Code of
the specified period providing the Participant Ethics. For violation by the member of any
or Subscriber is current on all amounts owed duty of membership including a violation of
the MLS and has kept all fees current during the NAR Code of Ethics while a member of
the period of suspension. In the event the any Association of REALTORS®.
suspension is for a remediable violation (as
defined in Section 1(o)), the suspension is in (b) Court or Regulatory Action. On
effect for the period that the violation the member's being convicted, adjudged, or
remains uncorrected, and the minimum and otherwise recorded as guilty by a final
maximum time limits for suspension do not judgment of any court of competent
apply. jurisdiction of 1) a felony or 2) a crime
involving moral turpitude, or 3) on a
(w) “Warning” means a "Letter of member's being determined by any court of
Warning," which is a letter from the competent jurisdiction, or official of the State
Association to an Association member or of California authorized to make the
MLS Participant or Subscriber advising of a determination, of having violated a provision
lack of professional conduct or a violation of of the California real estate law or a
MLS rules determined by a "due process" regulation of the Real Estate Commissioner.
hearing by a hearing Panel and warning that
future similar conduct could result in further (c) Responsibility of Designated
and additional discipline as provided in this REALTOR®. For any violation of
Manual. subsection (a) by a member who is not a
Designated REALTOR®, the Designated
Section 2. Duties of Membership REALTOR® may be also found in violation
provided he or she was the Designated
Among the duties of membership are the REALTOR® for that member at the time the
following: alleged violation occurred. In such instance,
both may, but are not required to be joined as
(a) To abide by the Code of Ethics of respondents in any proceeding. The finding
the NATIONAL ASSOCIATION OF of a hearing Panel with respect to any
REALTORS® (NAR). violation by the Designated REALTOR® and
the member employed by or affiliated with
(b) To abide by the bylaws of this him or her as an independent contractor may
Association and its rules and regulations be the same or different; and in the event both
including the provisions and procedures of are found in violation, the sanctions, if any,
this Manual. may be the same or different. Panels should
refer to Form D-15 for guidance on when it is
(c) To submit to arbitration all appropriate to discipline a Designated
controversies specified in Part Two of this REALTOR® based on the actions of a
Manual by the procedure there provided, and member employed by or affiliated with the
to abide by the arbitration award. Designated REALTOR®.
Section 3. Power to Take (d) Responsibility for Non-
Disciplinary Action Against an member. For any violation of subsection (a)
Association Member by any person who is not a member, but is
employed by or affiliated with a member and
After a hearing as provided below, the was providing real estate related services
Directors may take disciplinary action within the scope of the member’s license.
against any member: Lack of knowledge by the member of such
person’s conduct shall only go to mitigation
of discipline imposed.
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 3Section 4. Duties of MLS Section 6. Nature of Discipline
Participants and Subscribers Against an Association Member
The duties of an MLS Participant or (a) Types of Disciplinary Action.
Subscriber shall be to abide by the MLS rules Disciplinary action may consist of one or
and regulations of the MLS to which they more of the following:
belong and the procedures set forth in Part
One of this Manual. (1) Placement of a Letter of Warning as
defined in Section 1(w) in the member's
Section 5. Power to Take file for a specified period of time lasting
Disciplinary Action Against an at least three (3) years;
MLS Participant or Subscriber
(2) Placement of a Letter of Reprimand as
After a hearing as provided below, the defined in Section 1(p) in the member's
Directors may take disciplinary action file for a specified period of time lasting
against any MLS Participant or Subscriber: at least three (3) years;
(a) MLS Rule. For violation of any (3) Imposition of a requirement for training
MLS rule. as defined in Section 1(q);
(b) Court or Regulatory Action. On (4) Designation of an appropriate and
the Participant's or Subscriber's being reasonable fine as defined in Section 1(i)
convicted, adjudged, or otherwise recorded commensurate with the gravity of the
as guilty by a final judgment of any court of determined violation not to exceed
competent jurisdiction of (1) a felony, or (2) $15,000 per party, per hearing;
a crime involving moral turpitude, or (3) on
a determination by any court of competent (5) Require Members to cease or refrain
jurisdiction, or official of the State of from continued conduct deemed to be in
California authorized to make the violation of the Code, or to take
determination, that the Participant or affirmative steps to ensure compliance
Subscriber violated a provision of the with the Code, within a time period to be
California real estate law or a regulation of determined by the hearing panel. Where
the Real Estate Commissioner. discipline is imposed pursuant to this
subsection, the decision should also
(c) Responsibility for Non- include additional discipline (e.g.,
Subscriber. For any violation of subsection suspension or termination of
(a) by any person who is not a Participant or membership) that will be imposed for
Subscriber, but is employed by or affiliated failure to comply by the date specified,
with a Participant or Subscriber and was and to continue to comply for a specified
providing real estate related services within period not to exceed three (3) years from
the scope of the Participant’s or Subscriber’s the date of required compliance.
license. Lack of knowledge by the
Participant or Subscriber of such person’s (6) Suspension of membership as defined in
conduct shall only go to mitigation of Section 1(u) for a stated period of time
discipline imposed. not less than thirty (30) days and not
more than one (1) year, unless the
suspension is for a remediable violation,
as defined in Section 1(o), in which case
the suspension shall be for the period that
the violation remains uncorrected; or
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 4(7) Expulsion from membership as defined and the member will be immediately
in Section 1(g) for a stated period of one suspended.
(1) to three (3) years, with reinstatement
to membership only by application for (f) Administrative Processing Fee.
membership as a new member after the The Association may adopt a policy to assess
specified period of expulsion, with the members an administrative processing fee
application considered on its merits; not to exceed five hundred ($500) dollars if
they are found in violation of the Code of
(b) Arbitration Requirement. If the Ethics or other membership duties. Any
conduct for which suspension or expulsion is processing fee policy adopted by the
ordered consists of failure to submit a dispute Association and any subsequent processing
to arbitration, the Directors may not permit fee assessed will be in addition to any
the disciplined member to avoid suspension discipline, including fines, and shall not be
or expulsion without submitting to the considered part of any disciplinary sanction
arbitration unless in the meanwhile the imposed.
controversy has been submitted to a court of
law without any objection by any party that it Section 7. Nature of Discipline
should be arbitrated. Against an MLS Participant or
Subscriber
(c) More than One Type of
Discipline Permitted. None of the foregoing (a) Types of Disciplinary Action.
shall preclude the hearing Panel from Disciplinary action for violation of an MLS
recommending and the Directors from rule may consist of one or more of the
imposing on any respondent one or more of following:
the possible disciplinary actions, as
determined by the gravity of the offense. (1) Placement of a Letter of Warning as
defined in Section 1(w) in the
(d) Alternative Discipline. If the individual's file for a specified period of
discipline imposed for violation of the Code time lasting at least three (3) years;
of Ethics is payment of a fine or attendance
and completion of education, the (2) Placement of a Letter of Reprimand as
respondent’s failure to complete the defined in Section 1(p) in the individual's
discipline in the time ordered shall file for a specified period of time lasting
automatically result in the respondent’s at least three (3) years;
suspension of membership until the
discipline is fulfilled. Resignation by the (3) Imposition of a training requirement for
respondent prior to fulfilling the discipline as defined in Section 1(q);
shall also result in the respondent’s
immediate suspension of membership. (4) Designation of an appropriate and
reasonable fine as defined in Section 1(i)
(e) Photo Requirement. In the case commensurate with the gravity of the
of any discipline which is publishable under determined violation not to exceed
Section 39, the failure of a member to timely $15,000 per party per hearing;
submit a photo and give authorization to
publish the photo by signing and submitting (5) Require the MLS Participant or
a completed Form D-24 will result in Subscriber to cease or refrain from
suspension, and the discipline summary will continued conduct deemed to be in
still be published. If the member resigns prior violation of the MLS Rules, or to take
to submitting the photo and Form D-24, the affirmative steps to ensure compliance
discipline summary will still be published, with the MLS Rules, within a time period
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 5to be determined by the hearing panel. administrative processing fee not to exceed
Where discipline is imposed pursuant to five hundred ($500) dollars if they are found
this subsection, the decision should also in violation of the MLS rules. Any
include additional discipline (e.g., processing fee policy adopted by the
suspension or termination of MLS Association and any subsequent processing
services) that will be imposed for failure fee assessed will be in addition to any
to comply by the date specified, and to discipline, including fines, and shall not be
continue to comply for a specified period considered part of any disciplinary sanction
not to exceed three (3) years from the imposed.
date of required compliance.
Section 8. Citations
(6) Suspension of MLS services as defined
in Section 1(v) for a stated period of time (a) For MLS Rules Violations.
not less than thirty (30) days and not The MLS Committee, subject to approval of
more than one (1) year, unless the the Board of Directors, may implement a
suspension is for a remediable violation, schedule of fines for certain MLS rules
as defined in Section 1(p), in which case violations and direct staff to issue citations
the suspension shall be for the period that for the specified MLS rules violations and
the violation remains uncorrected; or implement a procedure whereby the
Participants and/or Subscribers receiving the
(7) Expulsion from the MLS as defined in citation may either pay the amount specified
Section 1(h) for a stated period of one (1) on the citation, request a citation
to three (3) years, with reinstatement to reconsideration, or request a full hearing in
MLS services by application as a new accordance with the procedures set forth in
MLS Participant or Subscriber after the Part One of this Manual.
specified period of expulsion, with the
application considered on its merits. (b) Correction of Violation; No
Formal Hearing. The citation recipient must
(b) More than One Type of first correct the alleged violation of the MLS
Discipline Permitted. None of the foregoing Rule prior to filing a request for citation
shall preclude the hearing panel from reconsideration. No formal hearing is held
recommending and the Directors from and no appearance by the citation recipient or
imposing on any respondent one or more of the MLS is allowed. All matters are
the possible disciplinary actions, as conducted based on the written submissions.
determined by the gravity of the offense.
(c) Basis for Citation
(c) Alternative Discipline. If the Reconsideration. The request for citation
discipline imposed for violation of an MLS reconsideration must clearly state the specific
rule is payment of a fine or attendance and ground(s) for the request and include all
completion of education, the respondent’s facts, timelines and/or reasons for the
failure to complete the discipline in the time request. The qualifying grounds for a request
ordered shall automatically result in the for citation reconsideration are one or more
respondent’s suspension of MLS until the of the following: (i) factual dispute regarding
discipline is fulfilled. Resignation by the the alleged violation(s), such as
respondent prior to fulfilling the discipline misapplication of the MLS Rule(s) cited or
shall also result in the respondent’s how the MLS Rule that was cited is not
immediate suspension of MLS. appropriate; or (ii) contention that there was
a violation of procedural due process by the
(d) Administrative Processing Fee. MLS.
The Association may adopt a policy to assess
Participants and Subscribers an
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 6(d) Preliminary Review. If the reconsideration by the citation
proper grounds for requesting a citation reconsideration Panel will be sent to the
reconsideration are not met, the request for citation recipient, the Responsible Broker,
citation reconsideration will be returned to and to the MLS within fifteen (15) calendar
the citation recipient. The citation recipient days after the Panel renders its decision.
will be given seven (7) calendar days to
amend the request for citation (h) Payment After Determination
reconsideration to meet the appropriate of a Violation. In the event that the citation
requirements. If the appropriate grounds still reconsideration Panel determines there was a
are not met, the request for citation violation, the payment of the fine and the
reconsideration will be denied and the fine administrative processing fee will be due
will be due to the MLS within seven calendar within seven (7) calendar days after the
days from the date of the notice of denial. citation recipient and Responsible Broker are
sent the notice of decision on request for
(e) Citation Reconsideration citation reconsideration. Failure to pay both
Panel. A citation reconsideration will be the fine and the administrative processing fee
conducted by a citation reconsideration Panel within seven (7) calendar days from the date
comprised of not less than three (3) nor more of the Notice of Decision on Request for
than five (5) REALTORS® from the Citation Reconsideration will result in
Association’s Professional Standards suspension of MLS services.
Committee.
(i) Finality of Citation
(f) Decision of Citation Reconsideration Panel Decision. The
Reconsideration Panel; Fine Limitation. If citation recipient and Responsible Broker
the grounds set forth in the request for agree that the decision of the citation
citation reconsideration are proper, the Panel reconsideration Panel is final and that that
will review the request and the they will not be able to request a formal
documentation submitted by the MLS. There hearing and/or Director’s Review based on
will be no additional sanctions, MLS Rules the decision of the citation reconsideration
and/or Code of Ethics violations added, and Panel.
the fine amount cannot be increased or
decreased (unless it is dismissed in its (j) For Code of Ethics Violations.
entirety). If the citation reconsideration The Grievance Committee, subject to
results in a finding that the citation recipient approval of the Board of Directors, may
violated the MLS Rule, the fine is limited to implement a schedule of fines for certain
the amount in the citation issued by the MLS Code of Ethics violations and direct staff to
plus an administrative processing fee that issue citations for the specified Code of
will be added to the fine amount. If the Ethics violations and implement a procedure
citation reconsideration Panel determines whereby the REALTOR® receiving the
that no violation occurred, the citation and citation may either (1) complete specified
fine will be withdrawn and no administrative training (at the option of the Association);
processing fee will be due. If the citation (2) pay the amount specified on the citation;
reconsideration Panel determines that there or (3) request a full hearing in accordance
was a procedural due process violation by the with the procedures set forth in Part One of
MLS, the citation reconsideration Panel may this Manual. Such Code of Ethics violations
dismiss the citation or may return the case to shall only be from those authorized in the
the MLS to correct the due process violation. C.A.R. Model Citation Schedule.
(g) Notice of Decision of Citation
Reconsideration Panel. Written notice of
decision on request for citation
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 7Section 9. Grievance Committee Manual and provide arbitration as requested
under the provisions of Part Two of this
There shall be a standing committee, known Manual.
as the Grievance Committee of at least five
(5) Association members. Unless the Section 11. Multi-Association
Association’s bylaws specify otherwise, at Professional Standards Hearings
least a majority shall be REALTORS®. The and Shared Panelists
members of the Committee shall be
appointed by the President, subject to (a) Multi-Association Program.
confirmation by the Board of Directors, for Notwithstanding any provision of this
staggered three (3) year terms, unless the Manual, the Association may, by mutual
term is otherwise specified by the resolution of the Boards of Directors of the
Association’s bylaws. One-third of the affected Associations agree with other
members of the first Committee so appointed Associations to establish multi-Association
shall be designated for one (1) year terms. professional standards programs, in which
The President shall annually designate the case the members of a Panel may include
Chairperson and Vice Chairperson(s) of the members from the participating Associations.
Committee.
(b) Sharing Panelists.
Section 10. Professional Notwithstanding any provision of this
Standards Committee Manual, the Association may, by mutual
resolution of the Boards of Directors of the
(a) Membership; Terms. There affected Associations, agree with other
shall be a standing committee, known as the Associations to share its Grievance
Professional Standards Committee, of at least Committee and Professional Standards
nine (9) Association members. Unless the Committee members and Board of Directors
Association’s bylaws specify otherwise, at on reviews, in which case the members of a
least a majority shall be REALTORS®. The Panel may include members from the
members of the Committee shall be reciprocating Association's respective
appointed by the President, subject to Grievance Committee, Professional
confirmation by the Board of Directors, for Standards Committee and Board of
staggered three (3) year terms, unless the Directors.
term is otherwise specified by the
Association bylaws. One-third of the Section 12. Interpretation of
members of the first Committee so appointed Bylaws
shall be designated for one (1) year terms.
The President shall annually designate the If the interpretation of any provision of the
Chairperson and Vice Chairperson(s) of the bylaws or rule or regulation relative to the
Committee. procedure of a hearing Panel's handling of a
matter is raised and submitted to the hearing
(b) Role of Committee Members. Panel by one or more of the parties, the
Members of the Professional Standards interpretation by that hearing Panel of the
Committee shall be selected to serve on bylaw or rule or regulation, including any
hearing Panels as required to hear matters of interpretation of this Manual, shall be set
alleged membership duty and ethical forth as a separate finding and shall be
misconduct by Association members that conclusive and final, except that the Directors
may result in discipline. In addition, the on review of a hearing Panel's decision shall
Committee hears alleged violations of MLS not be bound by that hearing Panel's
rules by MLS Participants or Subscribers interpretation of the bylaws or this Manual.
under the provisions of Part One of this Failure of a hearing Panel to set forth its
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 8interpretation as required by this Section all the parties. An optional “fast track”
shall not invalidate the decision of the process for notice, receipt, consideration and
hearing Panel. resolution of ethics complaints may be
adopted by the Association. The timelines
Section 13. Notices for the “fast track” process are published in
the supplement to this Manual.
(a) Methods of Notice by
Association. Any notice required to be given Section 14. Waiver; Copyright
or paper required to be served by the Representation and
Association may be given or served by Indemnification Agreement for
personally handing it to the party to be Photos
notified, by sending via first class mail, by
any mail delivery service or by certified mail Each member, MLS Participant or
addressed to the mailing address on the Subscriber, by virtue of and in consideration
records of the Association, or sent to the party of membership or MLS services, waives any
by email. When possible, email is the right of personal redress against C.A.R., the
preferred form of service for notices and Association, C.A.R. or Association
documents sent by the Association pursuant employees, any member, including but not
to the procedures specified in this Manual. If limited to, members of a Panel, or witnesses
mailed or delivered by the Association, for anything done under these procedures.
notice shall be deemed given when placed in This includes, but is not limited to submitting
the mail or when given to the delivery service a photo pursuant to Section 39, by which the
and deemed received within five (5) calendar member represents that the member is the
days of such mailing or delivery, regardless copyright owner of the photo submitted to
if actually received or not. C.A.R. and the Association or has the right to
license the photo to C.A.R. and the
(b) Email Notices. Notices sent by Association for publication according to the
email shall include the Association’s request guidelines in this Manual. The member
that delivery be acknowledged by the agrees to indemnify C.A.R., the Association,
intended recipient within twenty-four (24) their affiliates, and their respective directors,
hours by return email. If receipt of the notice officers, members, employees, agents,
has not been acknowledged by the intended licensees, shareholders and subcontractors
recipient within twenty-four (24) hours, the from and against any and all claims, losses,
recipient will be contacted by telephone to damages, liabilities and expenses, including
confirm receipt and the recipient’s reasonable attorneys' fees, court costs and
confirmation will be noted in the file. If other legal expenses, which it or they may
receipt of notices sent by email cannot be suffer or incur in connection with any claim
confirmed, the notices will be resent via first that the submitted photo infringes upon any
class mail, by any mail delivery service or by third party’s copyright or other intellectual
certified mail. property or proprietary right.
(c) Names of Hearing Panel Section 15. Communication and
Members. Notice of any hearing shall
Clerical
include the names of the members of the
hearing Panel at the time said notice is given.
Communications shall be directed to the
Association Executive. The Association
(d) Timing of Notices for Hearings.
Executive shall render all necessary
Notice of any hearing, except for an
assistance to the parties, shall on application
adjourned or continued hearing, shall be
furnish required forms, shall receive and file
given not less than twenty-one (21) calendar
all documents or other papers, and shall
days beforehand, unless otherwise agreed by
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 9receive all fees and disburse all monies the violation(s): (1) name and photo of the
payable to the Association. In no event, member found in violation (but not the name
however, shall the Association Executive of the firm the member is, or was, affiliated
provide substantive advice or interpretation with); (2) if the responsible broker is also
of this Manual, Association bylaws or other found in violation, the name of the
governing documents. responsible broker will also be published; (3)
if a member’s name is similar to another
Section 16. Attempts to Influence member’s or MLS Participant’s name, the
Panel member’s real estate license number and/or
office address may also be included; (4) the
No party or party’s attorney shall contact the Article(s) of the Code of Ethics violated, (5)
hearing Panel members outside the hearing a brief factual synopsis of the matter with
with regard to the hearing, and shall not names redacted (except for the respondents
attempt, directly or indirectly, to influence a found in violation); (6) discipline imposed;
member of a Panel in any matter before it, and (7) the effective date and duration of the
other than by giving evidence and argument discipline, if applicable; and (8) rationale in
in an open hearing. mitigation or aggravation for the discipline, if
applicable. This information will be
Section 17. Confidentiality of published on one or more of any authorized
Proceedings C.A.R. communications vehicles, such as the
C.A.R. website or magazine. The information
(a) Confidentiality Obligations; will be removed from the C.A.R. website
Reporting to C.A.R. All proceedings, three (3) years after initial publication.
including the allegations, findings,
recommendations and decisions in All discipline will be published
disciplinary proceedings, are confidential and except letters of warning, cease and refrain
shall not be reported or published by the orders, and/or education that does not include
Association, any member of a Panel or any a letter of reprimand, fine, suspension or
party, except all proceedings, including the expulsion. However, if a suspension or fine
allegations, findings, recommendations and is imposed because the member does not
decisions in disciplinary proceedings shall be comply with the education requirement or
reported to C.A.R. in accordance with policy cease and refrain order, the discipline will be
adopted by the C.A.R. Directors, which published when the suspension or fine is
requires that each Association submit such imposed. Citations under the Ethics Citation
information to C.A.R. through a secure or MLS Citation systems will not be
repository maintained by C.A.R. and as published by C.A.R.
authorized in this Section and Section 39.
Upon the conclusion of the proceedings, the (c) Local Association Publication.
Association, all Panel members and the The local Association’s Board of Directors
parties shall have an obligation to maintain may, but is not required to, adopt a policy to
and protect this confidentiality except where publish discipline in its local Association
disclosure is authorized in this Manual, communications vehicle(s) available to its
including but not limited to, Section 39 members. The local Association may adopt a
regarding Publication by C.A.R. and policy to publish discipline that uses the same
Association Members, or as required by law. criteria as C.A.R.’s publication policy as set
forth in Section 39 and Section 17(b). The
(b) C.A.R. Publication. Except as local Association may also adopt, in addition
provided below, if a member is found in to or instead of the C.A.R. publication
violation of the Code of Ethics, C.A.R. shall criteria, a policy to publish discipline when a
publish the following information regarding member is found in violation of the Code of
Ethics a second time within a (3) year time
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 10period. Any discipline published by a local Section 18. Right to
Association shall include the member’s Counsel/Other Representation
name, the fact that the member has been
found in violation of the Code of Ethics, the (a) Right to Counsel; Ethics
Article(s) violated, and the discipline Advocate. Any party may be represented by
imposed. Published discipline shall not legal counsel or by a REALTOR® (or both)
include the name of the firm the member is, at any ethics hearing, including reviews, even
or was, licensed or affiliated with. In cases where the hearing will occur in the party’s
where the member’s name is similar to absence. If the Association has adopted the
another Association member’s or MLS Ethics Advocate (EA) program, a sub-
Participant’s or Subscriber’s name, the committee of the Professional Standards
member’s real estate license number or office Committee of REALTORS® will be specially
address (or both) may also be published. trained to represent parties during the
disciplinary process. The role of legal
(d) Acceptable Disclosure. The counsel or EA may include preparation for
Panel members shall not discuss the hearing, including the preparation of forms
proceedings, including the Panel’s and assembly of evidence, representation at
deliberations, with any person(s) other than the hearing, including the making of opening
the other members of the Panel, Association and closing statements on behalf of the party
staff or legal counsel, the Board of Directors represented at the hearing, examining and
of the Association, or as may be required by cross examining witnesses, and introducing
this Manual, the MLS rules, the bylaw affidavits, documents and other relevant
provisions of the Association or where evidence, and representation at any review
disclosure is required by law. Members of hearings, but does not include testifying as a
the Grievance Committee acting pursuant to witness. In the event the parties do not give
the provisions of Section 24 of Part One of fifteen (15) days’ notice of their intention to
this Manual shall not be precluded from have legal counsel or EA representation to
discussion necessary to the preliminary the Association and all other parties, the
review. hearing may be continued, and the party
giving late notice may be assessed a
(e) Obligations of the Parties. The continuance fee. An Association is not
parties shall not report or publish the required to provide an EA for a party if the
allegations, findings or decisions of any Association has not adopted the EA program.
disciplinary proceeding to anyone except as Where an ethics hearing takes place in a
may be required by law. Notwithstanding, respondent’s absence, the respondent is still
the respondent in a disciplinary hearing is entitled to be represented by counsel at the
authorized to disclose the decision to hearing.
vindicate that respondent’s professional
reputation. Any party to a disciplinary (b) Notice of Representation.
proceeding is authorized to disclose the Notice of intention to have representation,
decision where there is a civil proceeding including the representative’s name, address,
involving the same facts and circumstances and phone number must be given by the party
which gave rise to the proceeding before the to all other parties and the hearing Panel at
Association. least fifteen (15) calendar days before the
hearing. In the event of failure to comply
(f) Enforcement. Actions with this notice requirement the hearing
inconsistent with this Section shall be Panel may, at its discretion, take all steps,
deemed a membership or MLS duty including continuance of the matter, if
violation. However, such actions shall not necessary, to guarantee the rights of all
invalidate any decision made by a Panel. parties to representation by counsel.
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 11(c) Association Legal Counsel. Any any objection under this Section by failure to
Panel and the Directors may consult with or object prior to the commencement of the
have legal counsel present to advise them on hearing.
issues of procedure and law.
(f) Request for Disqualification.
Section 19. Qualification for Panel Any party may file with the Association
Executive a written request for
(a) Business Limitation. Only one disqualification of a member of a hearing
person connected with any firm, business, Panel stating the grounds alleged as the basis
partnership or corporation may serve on the for disqualification (Form D-5). Challenges
same Panel. submitted by any party pursuant to this
Section shall be decided by the Professional
(b) Panel Limitation. No individual Standards Chairperson or his or her designee.
may participate in the deliberation of more A party shall not have the right to request
than one Panel on the same matter. disqualification of a member of a hearing
Panel solely on the basis of the panelist’s
(c) Automatic Disqualification. A race, color, religion, sex, handicap, familial
person shall automatically be disqualified to status, national origin, sexual orientation, or
be a member of a Panel in any case in which gender identity. A party shall be deemed to
he or she is 1) a party; 2) related by blood or have waived any grounds of disqualification
marriage (to the fourth degree) to a party; or of which he or she then has knowledge unless
3) an employer, employee, partner or other he or she files the request within ten (10)
business associate of a party. calendar days after the prospective names are
transmitted to the parties. However, any
(d) Certificate of Qualification. member of a hearing Panel may be
Before sitting on any case, each member of a disqualified at any time if a majority of the
Panel shall sign a statement (Form D-7) that members of a hearing Panel find any
he or she is not disqualified for any of the automatic grounds of disqualification to be
reasons described in Section 19(c) and that he present under this Section, or find any other
or she knows of no other reason that might facts which, in their judgment, may prevent
prevent him or her from rendering an the member from rendering an impartial
impartial decision. decision or appear to do so. However, none
of the foregoing is to be construed as to allow
(e) Discussion Prior to Hearing. a challenge to the qualifications of members
Every member of a hearing Panel (except a of the Association's Grievance Committee.
member of the Grievance Committee acting
pursuant to the provisions of Section 24 of (g) Absent Panel Member. If a
Part One of this Manual) shall avoid, so far as hearing Panel member fails or is unable to
possible, discussing the case with any person participate in a hearing, the remaining
prior to the hearing. If he or she does engage hearing Panel members may, at their option,
in any such discussion prior to the hearing, he but only with the express consent of the
or she must disclose the fact to the parties and parties, proceed with the hearing. Only the
to the other members of the hearing Panel as remaining hearing Panel members may
soon as practicable but no later than at the participate in the hearing and the
beginning of the hearing. Upon such determination thereof. Should any hearing
disclosure, any party may challenge a Panel member absent him or herself during
member of a hearing Panel and, if the hearing the progress of the actual hearing, that
Panel agrees, at the option of the hearing individual shall likewise not participate in the
Panel, that member of the hearing Panel shall deliberations or determinations thereof. If all
be dismissed, and a new hearing Panel the parties do not agree to proceeding without
member shall be selected. A party waives the full number of the Panel originally
2021 C.A.R. CODE OF ETHICS AND ARBITRATION MANUAL 12designated, the Presiding Officer or his or her requirements of this Manual. The
designee of the hearing Panel will recess the Association Executive shall only conduct
hearing to a date on which all hearing Panel such preliminary review as is necessary to
members can be present. If the Presiding make this determination and any decision
Officer or his or her designee cannot at that reached by the Association Executive shall
time schedule a new date, notice of a not be considered a decision on the merits of
subsequent date shall be served on all parties the dispute. In the event there is a dispute as
herein provided. to whether a complaint has been properly
filed, the Association Executive shall refer
Section 20. Filing a Complaint such disputes to the hearing Panel for
consideration. Directly before the hearing,
(a) Who May File; Where to File. both parties will be given the chance to argue
Any person, whether a member or not, having before the hearing Panel as to whether the
reason to believe that a member, Participant complaint was timely filed, and the hearing
or Subscriber is in violation of any conduct Panel will decide whether to proceed with the
subject to disciplinary action under Sections complaint or dismiss the complaint for not
2 and 4 of Part One of this Manual may file a being timely filed.
complaint in writing with the Association
(Form D-1) where the respondent is a (d) Disciplinary and Arbitration
member or where the property at issue is Complaints Filed Together. If both a
located. In the event the complaint is filed at disciplinary and an arbitration complaint are
the Association where the property at issue is filed against the same Respondent and arising
located, the Association where the complaint out of the same matter, the disciplinary
is filed shall obtain a cooperative complaint is processed through the Grievance
enforcement agreement with the Association Committee first. If the Grievance Committee
where the respondent is a primary member. recommends that the matter be forwarded for
The Association Executive may require the a hearing, the complaint should be held in
complainant to supply the necessary number abeyance pending the outcome of the
of copies of the complaint. arbitration. The disciplinary hearing is held
after the arbitration has been completed and
(b) Timing of Filing. A complaint must be before a different hearing Panel.
meeting all filing requirements must be filed
within one hundred and eighty (180) calendar (e) Ethics Advocate. If the
days after the facts constituting the matter Association has adopted the Ethics Advocate
complained of could have been known in the program, the complainant may request the
exercise of reasonable diligence or one assistance of an Ethics Advocate (“EA”), by
hundred eighty (180) days after the submitting a Request for Ethics Advocate
conclusion of the transaction, or event, packet (Forms D-23, D-23A & D-23B) to the
whichever is later. When a party utilizes the Association. The EA is authorized to help the
Association or C.A.R. ombudsman program complainant draft the Complaint (Form D-1)
or an ethics mediation program, the filing and other forms required for the disciplinary
deadline is suspended until the case is process. In addition, the EA may represent
reported closed by the ombudsman or ethics the complainant at the hearing, as set forth in
mediator. Section 18(a).
(c) Preliminary Review. The Section 21. Role of Designated
Association Executive may conduct a REALTOR® in an Ethics Hearing
preliminary review of the complaint to
determine whether the complaint is subject to (a) Optional Addition to
disciplinary action by the Association and Complaint. If anyone other than a
otherwise complies with the filing
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