In the real estate justice system, the people are represented by two separate yet equally important groups: the Grievance Committee, which investigates crime; and the Professional Standards Committee, which prosecutes the offenders. These are their stories (gavel sound effect).
Well, sort of. While it’s not a bonafide legal system, there is an ethics system the real estate industry follows. When you become a Realtor, you pledge to maintain and uphold 17 articles within the Code of Ethics, which detail how a Realtor should act in three areas of their business: how to uphold professional standards with clients and customers, the general public and other agents. To help do exactly that, the associations help keep the code in place and provide industry justice.
“The purpose and role of the Grievance Committee is much like that of a grand jury in our judicial system,” says Doug MacArtney, a broker associate with Coldwell Banker Residential Brokerage in Downers Grove and chairperson of the Grievance Committee for the Mainstreet Organization of Realtors (MORe), who is pictured on this issue’s cover. “It acts as a grand jury in determining whether complaints or requests for arbitration or mediation will move forward to the Professional Standards Committee.”
The Grievance Committee handles mainly ethics violations and requests for arbitration, which usually arise from a dispute between brokers over commission earned and which broker is considered to be the “procuring cause” of the closed transaction. The Professional Standards Committee makes decisions on matters involving ethics or arbitration that have been in front of the Grievance Committee already; the Professional Standards Committee is similar to a court, and the court abjudicates matters that come before it.
The Grievance Committee determines whether a complaint moves forward to the Professional Standards Committee, which holds hearings and gives due process rights to all parties, pursuant to guidelines within NAR’s Code of Ethics and Arbitration Manual. When a complaint moves forward to the Professional Standards Committee for a formal hearing, both parties are given the opportunity to plead their case.
But that’s only the beginning – how agents can avoid “litigation” with either committee is what we address in our cover story. Read it on page 12 and let me know your thoughts: email@example.com.