November 2019 CEO Report
Welcome to an early taste of winter! I hope that you were prepared for this unwelcomed first snow. In my report, I will summarize the 2019 NAR Governance Meetings.
My meetings began with the annual NAR Legal Education Seminar. Topics covered were as follows,
- Antitrust Litigation
- Hot Issues in Employment Law
- NAR Insurance Program and Trends
- Fundamentals of Association Governance
- Copyright Infringement Risk Mitigation
- Hot NAR MLS Issues
- TCPA and Do-Not-Call Registry Compliance
- Disaster Planning
- Standards and Best Practices
I attended the Resorts and Second Homes Committee meeting as the NAR Association Committee representative. As part of my involvement, I am required to submit to NAR any committee issues that might be passed on to the Board of Directors for action, both before and after our meeting. We had no Items to pass on as this meeting was all informational only. Agenda items were:
- Update on RSPS Certification
- Commitment to Excellence Program Update
- H-2B Guest Worker Visa Program
- Legislative and Regulatory Update
- Policy Challenges and Opportunities for Short Term Rentals
This was my final meeting as a committee member as I will be serving for the next two years on NAR’s MLS committee.
I attended the NAR MLS committee, which was an overflow crowd as the topic was the proposed MLS policy statement 8.0, and I will summarize the meetings below.
NAR MLS Items
The NAR Board of Directors passed the following new MLS policy statement 8.0:
“ Within one (1) business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS Participants. Public marketing includes, but is not limited to, flyers displayed in windows, yard signs, digital marketing on Public facing websites, brokerage website displays (including IDX and VOW), digital communications marketing (email blasts), multi-brokerage listing sharing networks and applications available to the general public.”
This new policy must be implemented no later than May 1, 2020.
MLS Policy statement 7.73 was amended to reflect the change to Standard of Practice 1-7 that was made back in May during the Legislative Meetings in Washington. A time limit was added to the policy where a cooperating broker can ask the listing broker for written affirmation that an offer was presented. The time limit added was “as soon as practical.”
NAR has appointed an “MLS Standards Work Group.” This workgroup will be discussing and considering a “core standards” requirement for MLSs. The workgroup will be providing an update and possibly may have a recommendation to present to the Board of Directors at the May Legislative meetings.
NAR Professional Standards
A new Standard of Practice for Article 3 was adopted :
“REALTORS may not refuse to cooperate on the basis of a broker’s race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.”
Standard of Practice 12-2 will be deleted, and Standard of Practice 12-1 will be amended to read:
“Unless they are receiving no compensation from any source for their time or services, REALTORS may use the term “free” and similar terms in their advertising and in other representations only if they clearly and conspicuously disclose (a) by whom they are being or expect to be, paid; (b) the amount of the payment or anticipated payment; (c) any conditions associated with the payment, offered product or service; and (d) any other terms relating to their compensation”
NAR Legal counsel recommended that these SOPs be combined, and existing policy be clarified to clearly specify what needs to be disclosed, consistent with Federal Trade Commission requirements.
Code of Ethics Training
The Board of Directors approved the change to the Code of Ethics training requirement from two to every three years. The current training cycle will be amended to end on December 31, 2021.
Federal Regulatory Updates
NAR expressed concerns to the FHA about HUD's policies regarding commissions and the conflict with NAR MLS policy. Changes are coming effective December 1.
NAR shared concerns that HUD's platform for REO/HUD Homes (www.hudhomestore.com) prevents brokers with an ownership interest from receiving a commission, which conflicts with Multiple Listing Service policy regarding the payment of commissions.
FHA policies are developed and regularly revised to best serve our mission and the millions of homeowners we serve across the country, and with consideration of potential abuse. FHA regulations provide flexibility regarding payment of broker commissions, which HUD has utilized to prevent conflicts of interest, abuses of government funds, and practices that could remove homeownership opportunities from our mission-targeted owner-occupant and low to moderate-income homeowners. HUD has undertaken further research on the impacts of restricting broker commissions. As a result, HUD is currently working on updating our system to allow brokers to be paid commissions on all competitive sales irrespective of the individual/entity purchasing the HUD REO property.
The system will retain the existing question about the Selling Broker/Agent and their ownership interest, to ensure that we can continue to gather and analyze this data; however, entering zero in the Selling Broker Commission field will no longer be required. Also, the following warning notice will be removed: "HUD will not pay a sales commission if the selling broker or agent submitting the bid is also a purchaser or has an ownership interest in an entity identified as a purchaser. In such cases the selling broker must enter zero in the Selling Broker Commission field (6a) of the Bid Submission Screen." These system changes will be put into force no later than December 1, 2019.
NAR Membership
105 Ohio REALTORS were approved for REALTOR Emeritus status
with NAR this year, and our Association had 24. I have a list that I will attach separately.
NAR Building Renovation
The building renovation of NAR’s headquarters in Chicago is on schedule however, projected costs to date are running $5.5 million over budget due to hidden conditions in the building and rising steel costs.
Bylaw Change
NAR Board of Directors approved the deletion of Article XI Misconduct in their Bylaws. NAR’s Code of Conduct and Sexual Harassment Policy was revised and adopted last year, which more clearly defines discipline and the procedure for harassment more so then the Bylaw article, and so it was deleted from the Bylaws.
Legal Action
Approved legal action funding in two cases: one challenging a real estate brokerage's classification of its agents as independent contractors and another supporting a lawsuit challenging New York City's rent control and rent stabilization laws as illegal takings in violation of due process.
It has voted to purchase a Master Policy for the Professional Liability Insurance Program for NAR, its affiliates, its member associations, and REALTOR association-owned MLSs for the 2020 policy year.
And also voted to purchase a Patent Infringement Liability Policy for NAR, REALTOR association-owned multiple listing services, and state and local associations for the 2020 policy year.
I hope you find this information helpful, and I am happy to go into additional details if you wish.
Respectfully submitted,
David W Freitag RCE, CEO
FAOR By-Law Revision
Below is the rationale for updating the FAOR By-Laws. You can vote on this via Absentee ballots (when available) or at the Annual Membership & Election on October 8th.
Article XI – Officer and Directors
Section 3. Board of Directors Appendix (d)
Rational for changes:
Currently our By-Laws require at least one Director from each County to sit on the Board. The By-Laws state the Officers (President, President-Elect/VP, Secretary/Treasurer, and Past President) do not count as a Director from their County. This change will allow the President-Elect/VP, Secretary/Treasurer and Past President to be counted as a Director from their county and therefore may vote and ultimately serve in their capacity as a Director. Only the President cannot vote, other than breaking a tie vote. Another benefit is we will no longer have to appoint a Director from an Officers County. Under the current rule, we have had to appoint someone to a Director Seat, depending on who is elected to become the next Secretary/Treasurer. The original intent was to make sure all but the President has a vote.
ARTICLE XI — OFFICERS AND DIRECTORS
Section 3. Board of Directors.
(a) The governing body of the Board shall be a Board of Directors consisting of 3 or 4 elected officers depending on whether the Secretary and Treasurer position, the immediate pastpresident of the Board, and eight (8) elected REALTOR® members. The Affiliate Member who has been elected from within the Affiliate Committee to be chairperson shall serve as director during their term.
(b) The Board must be the primary board of each candidate seeking election as either an Officer or Director. Each candidate seeking election as either an Officer or Director must have a minimum one (1) year of experience as a licensed REALTOR®. (August 2014)
(c) Directors shall be elected to serve for terms of three years, except that at organization, one- third of the elected Directors shall be elected for terms of one, two, and three years, respectively, or for lesser terms as may be necessary to complete the first fiscal year. Thereafter, as many Director seats need to be filled during the same election cycle, the Directors may assign accordingly by the election at the meeting. (October 2014)
(d) At all times, there shall be at least one (1) Director on the Board of Directors from each of the counties within the territorial jurisdiction of the Board. The Officer positions President Position shall not serve to satisfy this requirement. In the event that any of the counties within the territorial jurisdiction of the Board have less than one (1) Director from the county, the Board of Directors shall appoint a Director for a one-year term from that county or counties, as necessary. Location of the appointee’s primary office at the time of appointment will determine the county that the individual is eligible to represent. (October 2014)
2019 REALTORS Conference & Expo
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