Professional Standards and Ethics

Introduction
Filing an Ethics Complaint
Grievance Committee Review
Professional Standards Committee Hearing
Arbitration
CAR Ombudsman Hotline
CAR to Publish Names of Code of Ethics Violators – In an effort to make ethics violations and the disciplinary process more transparent, starting August 1, 2014, C.A.R. will be publishing the names – and the other information listed below – of members who are found in violation of the Code of Ethics.
2022-California Code of Ethics and Arbitration Manual
NAR Professional Standards and Policies

CONTACT

For questions, more information, or to file a complaint, please contact:

Mark Dowling

Chief Executive Officer

Email: mdowling@ivaor.com
Phone: 951.684.1221

INTRODUCTION

The REALTOR Professional Standards Process

The Inland Valleys Association of REALTORS® (IVAR) provides various services to assist their Members, their clients and the public in the resolution of disputes. By virtue of becoming and remaining a Member of the Inland Valleys Association of REALTORS®, Members agree to abide by the Association bylaws and the REALTOR® Code of Ethics.

Every REALTOR Member of the Association has a duty and responsibility to abide by the Code of Ethics, the Bylaws of the Association, the Rules and Regulations of the MLS, and the Bylaws of N.A.R. and C.A.R. The responsibility relating to enforcing the Code of Ethics, disciplining Members, and arbitrating disputes is governed by the Code of Ethics and Arbitration Manual of N.A.R., to the extent consistent with state law.

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 or arbitration complaint until the litigation has concluded.

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Code of Ethics

The National Association of REALTORS® (N.A.R.) 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 behavior to clients, customers, other members of the public and fellow real estate professionals detailed in the Code of Ethics.

To further the Association’s goal of promoting and maintaining high standards of conduct in the real estate profession, the Association has adopted the Code of Ethics of the National Association of REALTORS. The Association has agreed to abide by and to enforce the N.A.R. Code of Ethics among its REALTOR Members.

FILING AN ETHICS COMPLAINT

To File a Complaint Yourself:

Complete our online Ethics Complaint form, or sign and date the PDF version of the Ethics Complaint Form (Form D-1), which you may download and print. (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. labeling these as Exhibit 1, 2, etc.

GRIEVANCE COMMITTEE REVIEW

The Association has a standing Grievance Committee whose function is to do a “paper review” of disciplinary complaints, to screen out frivolous complaints, to prevent abuse and harassment, and to assure complaints are properly framed. It does not review arbitration requests. Grievance Committee “paper review” is the first step in the Disciplinary Hearing process.

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. Furthermore, the Grievance Committee may issue a fine for certain Code of Ethics violations. (See, “How the Citation System Works” below).

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.

CITATION SYSTEM

In an ongoing effort to increase member professionalism in the marketplace, expedite the ethics hearing process and protect the interests of the general public, IVAR adopted the C.A.R. Citation System for Code of Ethics violations.

How the Citation System Works

Business conduct violating some articles in the REALTOR® Code of Ethics could be subject to a citation or fine. Accordingly, IVAR’s Grievance Committee is charged with the responsibility to determine whether the conduct in any ethics complaint received 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 have 10 days to pay the cited fine or request an ethics hearing through the Professional Standards committee.
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 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 1:

Failure to fully disclose and obtain consent from both parties when representing both the seller/landlord and buyer/tenant in the same transaction
Failure to submit offers and counter-offers objectively and as quickly as possible
Failure to advise sellers/landlords of information specified in Standard of Practice 1-12 prior to entering into a listing contract
Failure to advise buyers/tenants of information specified in Standard of Practice 1-13 prior to entering into a buyer/tenant agreement
Accessing or using, or allowing others to access or use, a property managed or listed on terms other than those authorized by the owner or seller

Article 3:

Failure to communicate a change in compensation for cooperative services prior to the time that REALTOR® submits an offer to purchase/lease the property
As a listing broker, attempting to unilaterally modify the offered compensation with respect to a cooperative transaction after a REALTOR® has submitted an offer to purchase or lease that property
Failing to disclose existence of dual or variable rate commission arrangements
Failure to disclose to cooperating brokers differential that would result in dual or variable rate commission arrangement if sale/lease results through efforts of seller/landlord
Failing to disclose existence of accepted offers, including offers with unresolved contingencies, to cooperating brokers
Misrepresenting the availability of access to show or inspect a listed property
Providing access to listed property on terms other than those established by the owner or the listing broker

Article 4:

Failing to disclose REALTOR^®’s ownership or other interest in writing to the purchaser or their representative

Article 5:

Providing professional services without disclosing REALTOR^®’s present interest in property

Article 6:

Accepting any commission, rebate, or profit on expenditures without client’s knowledge or consent
Failure to disclose to a client or customer REALTOR®’s financial benefits or fees received as a direct result of recommending real estate products or services
Failure to disclose REALTOR®’s direct interest in an organization or business entity when recommending to a client or customer that they use the services of that organization or business entity

Article 12:

Failing to present a true picture in real estate communications and advertising
Failing to disclose status as real estate professional in advertising and other representations
Failure to provide all terms governing availability of a “free” product or service in an advertisement or other representation
Failure to disclose potential to obtain a benefit from third party when REALTOR® represents their services as “free” or without cost
Failure to exercise care and candor when communicating the terms and conditions of premiums, prizes, merchandise discounts or other inducements to list, sell, purchase, or lease
Advertising property for sale/lease without authority of owner or listing broker
Failing to disclose name of firm in advertisement for listed property
Failing 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
Failure to take corrective action when it becomes apparent that information on a REALTOR®’s website is no longer current or accurate
Failure to disclose firm name and state of licensure on REALTOR® firm website
Misleading consumers through deceptive framing, manipulating content, deceptively diverting internet traffic, presenting other’s content without attribution or permission, or using misleading images
Registering or using of deceptive URL or domain name
Representing that the REALTOR® has a designation, certification, or other credential they are not entitled to use

Article 14:

Failing to cooperate in a professional standards proceeding or investigation in circumstances when cooperation has been demanded by the association and association has advised REALTOR® failure to cooperate could result in an allegation of a violation of Article 14

Article 16:

Conditioning submission of a buyer’s offer on additional compensation from a listing broker
Placing for sale/lease sign on property without permission of seller/landlord

PROFESSIONAL STANDARDS COMMITTEE HEARING

Professional Standards discipline proceedings are used to impose sanctions for alleged violations of or failures to conform to the specific professional standards of the N.A.R. Code of Ethics, the Association’s Bylaws, or the MLS rules. The Association has a standing Professional Standards Committee whose function is conducting arbitration hearings and other disciplinary hearings.

The Professional Standards Committee can offer recommendations based on findings of facts, for either:

No violation, or Discipline, which can be:

A letter of warning
A letter of reprimand
A fine
Required attendance at an ethics, MLS, or other appropriate course
Probation
Suspension of membership in Association
Expulsion of member from Association
Referral to the Department of Real Estate
Administrative processing fee if violation found.

The Association may not require REALTORS® to pay the complainant(s) monetary or punitive damages and cannot revoke a real estate license.

Director review of the hearing results

Ratification by Directors is required before the decision or sanction becomes final. Review of findings of fact and recommendations may be requested within 20 days based on misapplication or misinterpretation of the Code of Ethics, due process or procedural deficiency, or unwarranted discipline. Following review, the recommendations can be adopted or modified, the matter dismissed, or the matter referred for a rehearing.

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. Presentations to the committee should be organized in advance, and all documents and other evidence must be presented at the time of the hearing. Although all committee members are trained, they are 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.

At the hearing:

Either party may be represented by legal counsel, provided that written notice of intention to do so, including name, address and telephone number of the attorney, is transmitted to IVAR not less than fifteen (15) calendar days prior to the date of the hearing.

Each party shall arrange to make available sufficient numbers of all evidence and exhibits prior to the hearing for distribution.

Each party shall arrange for his/her witnesses to be present at the time and place designated for the hearing.

The hearing will be conducted in the English language. Interpreters are allowed to assist any party or witness at the hearing. Arrangements for having an interpreter is the responsibility of the party requiring such services and the cost for same shall be paid by that party. Notification of interpreter presence shall be transmitted to the association no less than 15 (calendar) days prior to the hearing date.

In accordance with the Professional Standards rules and procedures for disciplinary hearing matters, a Hearing Officer will conduct the hearing proceedings. In addition to presiding at the hearing, the presiding officer will rule on the admission and exclusion of evidence and questions of hearing procedures.

The complaint will be read into the record.
The testimony of all parties and witnesses will be sworn or affirmed. All witnesses will be excused from the hearing except while testifying.
Each party or the party’s attorney shall be given the opportunity of making an opening statement.
The parties will be given an opportunity to present evidence and testimony on their behalf and they may call witnesses.
The parties and their counsel will be afforded an opportunity to examine and cross-examine all witnesses and parties.
Members of the hearing panel may ask questions at any time during the proceedings.
The Hearing Officer may exclude any questions ruled to be irrelevant or argumentative.
Each side may make a closing statement. The complainant will make the first closing statement and the respondent will make the final closing statement.
The Hearing Panel will go into executive session to decide the case.

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 re-hearings 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.

ARBITRATION

Arbitration is used to resolve monetary disputes arising out of the real estate business. Disciplinary sanctions are not imposed in arbitration hearings. If there is a related disciplinary complaint, arbitration is first held, then a disciplinary complaint is filed. Arbitration is a form of Alternative Dispute Resolution (“ADR”) that is recognized and encouraged by the State Legislature and Courts. For a complete description of the Arbitration process, see the 2020-California Code of Ethics and Arbitration Manual. Members of the Association agree, as a condition of membership, to submit disputes to arbitration.

Arbitration is initiated by a written request of one or the other of the following complaint forms:

One of these forms must be sent to the Chief Executive Officer of the Association within 180 calendar days of the close of escrow or after facts could have, in the exercise of reasonable diligence, been known.

The filing fee for an arbitration complaint is $500.00.
The Chief Executive Officer upon receipt of the complaint may advise the parties if the matter is arbitrable and that mediation procedures are available.
The Broker at the time the money was owed must be included as a party.
Notice of the request to arbitrate is mailed to the respondent; a written response is not required, but respondent is obligated to arbitrate with or without a response

Respondent may file a counter claim; a counter claim is required for respondent to receive a monetary award for money other than the subject of the original complaint; costs are recoverable by prevailing party without a counter claim.

NOTE: Panel members must fill out an “Arbitration Disclosure Statement”, (CAR Form A-21)

Association’s Right to Decline Arbitration

Occasionally, a dispute submitted for arbitration may meet the basic filing requirements but the substance of the dispute will be too legally complex and/or involve a significant amount of money in dispute. In these situations, the association has the right to decline arbitration and release the parties from their obligation to arbitrate at the association.

Hearing is scheduled

Parties voluntarily exchange evidence; if dispute exceeds $50,000 a list of all witnesses and evidence must be exchanged prior to the hearing.
Hearing is conducted; strict evidence rules do not apply.
Complaining party must appear to conduct a hearing; hearing must be conducted to render an award.
Responding party’s failure to appear does not prevent hearing from proceeding and an award being rendered.

Mediation

Mediation is an entirely voluntary alternative dispute resolution method that is available to parties to an arbitration dispute. Mediation provides an opportunity for the parties to come together in an informal setting to resolve their differences amicably without the time and expense of a formal arbitration proceeding. It is not required and is not intended as a substitute for arbitration.

The Chief Executive Officer may ask the parties to consider mediation when the complaint is received

The complainant submits a request for mediation.

Upon agreement by the parties, a mutually agreeable date, time and place will be arranged for mediation before an experienced qualified and impartial mediation officer.

A party may withdraw from the mediation process at any time
If the mediation successfully reaches a resolution of the dispute, a mediation resolution agreement will be prepared and signed by the parties binding them to the resolution set forth and waiving all future right to submit the dispute to arbitration
If the mediation is unsuccessful, the mediation officer may recommend a resolution at the conclusion of the mediation; if a party rejects the suggestion, or if no response to the recommendation is received, the mediation officer will advise the Board that the mediation has terminated without a resolution

Following unsuccessful mediation, the request for arbitration will proceed to hearing.

Ombudsman Hotline

Occasionally, REALTOR® members find themselves embroiled in a dispute with another member. The C.A.R. Ombudsman Hotline is here to help. C.A.R. Ombudsmen receive and respond to questions and complaints about members; can contact members to inform them that another REALTOR® has raised a question or issue; and can contact members to obtain information necessary to provide an informed response to the person complaining.

The Ombudsman’s role is primarily one of communication and conciliation, not adjudication. Ombudsmen do not determine whether ethics violations have occurred, rather they anticipate, identify, and resolve misunderstandings and disagreements before matters ripen into more significant disputes.

Ombudsmen are not attorneys and cannot give legal advice or answer legal questions.

The C.A.R. Ombudsman Hotline is a free service that C.A.R. offers for its members. If you wish the assistance of a C.A.R. Ombudsman, you may call (213) 739-7227 or email the Ombudsman Hotline at ombudsman@car.org.