Membership Policy Webinar Objectives Define NARs Membership Policies

Membership Policy

Webinar Objectives • • • Define NAR’s Membership Policies Define REALTOR® Membership Explain Board of Choice Understand Universal Access to Services Where to find NAR policy resources and tools

Membership Policies Establish the privileges and obligations of association membership.

Membership Policies Also cover matters of association formation and jurisdiction such as name changes, mergers, and changes in jurisdiction

Membership policies are found in association governing documents Articles of Incorporation Association Bylaws (Additional) Policies and Procedures

NAR Model Governing Documents • Model Bylaws for Local Member Boards* • Model Bylaw Addendum for Local Member Boards with REALTOR-Associate® Membership* • Model MLS Rules and Regulations and Model MLS Bylaws, found in the Handbook on Multiple Listing Policy • Code of Ethics and Arbitration Manual *Only available online at Realtor. org.

NAR Governing Documents • Constitution and Bylaws of the NATIONAL ASSOCIATION OF REALTORS®* • Official Interpretations of the Bylaws of the NATIONAL ASSOCIATION OF REALTORS®* *Only available online at www. Realtor. org.

REALTOR® MEMBERSHIP

Who is Eligible to Apply for Membership Designated REALTOR® REALTOR-Associate®

Designated REALTOR® • Typically a principal broker for the firm • Selected by the firm to be responsible for the privileges and obligations of NAR membership including the collection of dues.

REALTOR® • Principal or non-principal affiliated or licensed with a Designated REALTOR® – Actively engaged in real estate – Must qualify for membership – Actively Engaged in real estate means buying, selling, exchanging, renting or leasing, managing, appraising for other for compensation, counseling, building, developing or subdividing real estate

REALTOR-Associate® • Optional category of membership • Non-principals affiliated or licensed with a Designated REALTOR® • Must qualify for membership • Is actively engaged in real estate

The Differences between Principals, Non-Principals and Non-members • • Principal Sole proprietors Partners in partnership Officers Majority shareholder(s) in corporations • Branch managers acting on behalf of principal(s) • All Principal REALTORS® in a firm MUST hold REALTOR® membership if any one principal does Non. Principal • Individuals engaged in real estate other than as a principal • Non-principal brokers • Sale licensees • Non-principal licensed or certified appraisers Non. Member • Someone that is NOT a REALTOR® • Licensees ALWAYS have the choice not to hold REALTOR® membership even if their broker is a REALTOR®. • No individual is required to seek and maintain membership in a board of REALTORS®

Membership Criteria Most Rigorous qualifications the AOR may consider “reasonable and nondiscriminatory written requirements for membership” AOR may elect some, all, or none of the criteria BUT must include in Bylaws

Membership Criteria for Principals • • Valid real estate license Actively engaged in real estate Place of business in state or state contiguous No record of official sanctions involving unprofessional conduct No recent or pending bankruptcy Complete board indoctrination course Signify their intention to follow the (Local, State and National) – Constitution – NAR Code of Ethics – Bylaws – Policy – Rules and Regulations

Membership Criteria for Non-Principals (Applying for REALTOR® or REALTOR-ASSOCIATE®) • • Valid real estate license Actively engaged in real estate Employed by or affiliated with a REALTOR® – May have to be acknowledged by REALTOR® who is principal with the firm No record of official sanctions involving unprofessional conduct Must voluntarily make a written application for REALTOR® or REALTORAssociate® Membership in the association Complete board indoctrination course Signify their intention to follow the (Local, State and National) – Constitution – NAR Code of Ethics – Bylaws – Policy – Rules and Regulations

BOARD OF CHOICE

What is Board of Choice Gives REALTOR® principals the freedom to join the board that provides them the most valuable services and programs regardless of where office is located

Board of Choice Primary Association Secondary Association Purchase Services from other AORs

Primary Membership (REALTOR® Choses) Association in the state or state contiguous thereto where REALTOR® is licensed and maintains principal place of business – Licensee may choose as their primary board any board in the state where one of the firm’s principals holds REALTOR® membership – Where local, state and national dues are paid

Secondary Membership • Terms and conditions no more stringent than requirements for primary REALTOR® membership – Licensees already in primary board may join any secondary board in the state. • Note- Designated REALTOR® does NOT have to hold membership in the board if the licensee is joining as a secondary member. – All the licensees in a firm are NOT required to join an association where their Designated REALTOR® is a secondary member. • Do not have to pay NAR and state dues again – However may have to pay to state dues if secondary board is in a different state

Purchase Services from other Association • Services available to REALTOR® irrespective of where membership is held • Subject to – Abiding by rules and regulations of the service – REALTOR®’s paying for the services • Fees for services determined by local association/MLS

DUES FORMULA

Dues are computed on the number of individuals licensed or affiliated with a Designated REALTOR®.

ABC Realty Licensee #1 Licensee #2 Licensee #3 Licensee #4

The principal broker for ABC Realty joins the local association Local REALTOR® Association

Designated REALTOR® for ABC Realty Licensee #1 Licensee #2 Licensee #3 Licensee #4

Licensee #1 Licensee #2 Joins/pays dues Licensee #3 Licensee #4 Local REALTOR® Association

Designated REALTOR® for ABC Realty Licensee #3 Licensee #4 Pays Nonmember assessments As part of his own personal DESIGNATED REALTOR® dues Local REALTOR® Association

REALTOR® Designated for ABC Realty REALTOR® Licensee #1 REALTOR® Licensee #2 Licensee Nonmember Licensee #5 #3 No increase in nonmembers; no additional assessment Nonmember Licensee #4

Exceptions to Dues • Limited Function Referral Office “LFRO” ONLY Exception • Separate entity • Licensees must ONLY generate referrals and provide them to the DR’s brokerage company on a substantially exclusive basis • REALTOR® must have direct interest in an entity engaged in exclusive solicitation/referrals of clients to that REALTOR® • Licensees in LFRO are NOT included in the dues formula

Assessment of MLS fees • MLS participation is different from REALTOR® membership. – There is no “primary” versus “secondary” membership in an MLS. • The MLS can require a broker to be a REALTOR® in order to participate in an association’s MLS. – The broker does NOT have to hold primary or secondary REALTOR® membership with the association they want MLS access from.

Assessment of MLS fees • The principal broker is the MLS participant. The non-principal sales licensees affiliated with an MLS participant obtain access to the MLS through their broker (as MLS subscribers).

ABC Realty Licensee #1 Licensee #2 Licensee #3 Licensee #4

The principal broker for ABC Realty joins the local association’s MLS Local REALTOR® Association

Principal Broker John is the MLS Participant for ABC Realty Licensee #1 Licensee #2 Licensee #3 • ABC Realty has one office • The licensees can access MLS through Principal Broker John as subscribers. The MLS can bill for Principal Broker John and four MLS subscribers. Licensee #4

Assessment of MLS fees • For firms with multiple office locations: – the MLS can assess only the offices that decide to join – Or, the MLS can adopt local policy allowing the MLS to assess for all offices that decide to join, plus all offices in the MLS’s jurisdiction

XYZ Realty (Office 1) Licensee #4 Licensee #3 Licensee #1 Licensee #2 Licensee #1 If Office 1 and Office 2 of XYZ Realty are located within the jurisdiction of the MLS, then the MLS can adopt local policy to charge MLS fees for all participants and subscribers in both offices if either office decides to join. XYZ Realty (Office 2) Licensee #2 Licensee #3

Licensee #4 XYZ Realty (Office 1) Licensee #3 Licensee #1 Licensee #2 If Office 1 is located within the jurisdiction of the MLS and Office 2 of XYZ Realty is NOT located within the jurisdiction of the MLS, then the MLS can assess fees to office 1 if either office decides to join. Licensee #1 XYZ Realty (Office 2) Licensee #2 Licensee #3

• An MLS has the option of billing offices of the MLS for all the subscribers in the office or for only those subscribers that actually use the service as certified to the MLS. • The MLS’ billing policy must be adopted by the MLS and applied uniformly to all MLS participants and all MLS subscribers.

Other Categories of Membership

Institute Affiliate Membership Designation awarded by an Institute, Society or Counsel affiliated with NAR • CCIM • IREM • CIPS • Et cetera Dues for Institutes • $105 • Paid to National Distributed to State and Local AOR establishes privileges and rights, but cannot: • use the term REALTOR® • be President of local AOR • participate in MLS that requires REALTOR® membership as a prerequisite

Affiliate Membership Individuals engaged in other real estate epecialties • Not buying, selling, exchanging, renting or leasing, managing, appraising for others for compensation, counseling, building, developing or subdividing real estate Only if optional language is adopted can an affiliate member be extended to • Licensed real estate professionals actively engaged in a specialty other than brokerage Local AOR establishes privileges and rights • Dues are set by local AOR

Where to Find Policy Resources

To Reach NAR Member Policy Staff • Call 800 -874 -6500, extension 8399, between 8: 30 a. m. and 5 p. m. CST • Send e-mails any time to: Member_Policy@realtor. org