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NAR Case Interpretation R elating to Article 17:
Corporate Veil to Avoid Obligation to Arbitrate
REALTORS® A and B, principals in different firms, were both members of the same Board. A disagreement arose between them concerning entitlement to a commission in a real estate transaction. After initial efforts to resolve the dispute proved fruitless, REALTOR® A filed a request for arbitration with the Board which was reviewed by the Grievance Committee which concluded that an arbitrable issue existed. Instead of agreeing to arbitration through the Board, REALTOR® B filed a lawsuit against REALTOR® A. Receiving notice of the suit, REALTOR® A filed a charge with the Board alleging REALTOR® B had violated Article 17 of the Code of Ethics.

REALTOR® B, in his presentation to the Board of Directors indicated that, in his opinion, he was not subject to any ethics charge, since it was his corporation, and not REALTOR® B individually, that had filed suit against the corporation of REALTOR® A, not against REALTOR® A himself.

REALTOR® A told the Board of Directors that immediately upon occurrence of the dispute, he had suggested to REALTOR® B that the matter be arbitrated by the Board, and REALTOR® B said he would think about it. REALTOR® A then proceeded to file his request for arbitration with the Board. However, REALTOR® B did not respond to the arbitration notice and, shortly thereafter, REALTOR® A received notice of the suit filed by REALTOR® B’s corporation against the corporation of REALTOR® A. He said he then called REALTOR® B and again discussed the obligation of Article 17 with him. However, REALTOR® B advised him that his corporation was not subject to the requirements of the Code and stated his intent to pursue the litigation.

REALTOR® B acknowledged that the facts as related by REALTOR® A were correct and that his corporation had filed suit upon the advice of the corporation’s legal counsel. REALTOR® B said that membership in a Board of REALTORS® is individual and that personal responsibility disappears when a matter of corporate business is involved. He pointed out that he was not the only principal or officer in his corporation and that the decision to file litigation was not made by him alone, but by all of the corporate officers.

The Board of Directors, in reaching its decision, did not agree with REALTOR® B’s position. The Directors’ noted that the membership requirement in a Board of REALTORS® has, as its purpose, the assurance of commitment by the principals in the firm to the Code of Ethics. This commitment addresses the conduct and activities of all persons affiliated with the REALTOR®’s firm whether a sole proprietorship, partnership, or corporation. Moreover, the Directors pointed out that Article 17 obligates REALTORS® to “. . . cause their firms to arbitrate and be bound by an award.”

REALTOR® B was advised to withdraw the litigation and submit to arbitration by a date certain or his membership in the Board would be terminated. REALTOR® B accepted the decision, withdrew the suit against REALTOR® A, and submitted to arbitration.
Leading By Example
Submit Your Positive Industry Related Story
for the Chance to Win a Gift Card to The Bartolotta Restaurants
Unfortunately, the general consensus from our members is that poor behavior in our market has been a significant problem. That is one of the reasons the GMAR created this ethics-focused newsletter. Through our new strategic plan, the GMAR and its Board of Directors are focused on improving the ethics and professional courtesies of our business.
At the GMAR, we hear many stories about poor agent behavior and we think it’s time we hear some positive stories about our members! Did you have a transaction where the co-broke or listing broker went the extra mile? Is there a REALTOR® that you enjoy working with because they know how to problem solve and make transactions go smoother? Would you like to share an inspirational story about a competitor? We can all learn from those who lead by example.
We will select and publish these inspirational stories through January 30, 2020. Following that time frame, the GMAR will select two winners, at-random, from all published entries. Both the REALTOR® who submitted the story and the GMAR Member (who is the subject of the story) will win a $100 gift card for The Bartolotta Restaurants compliments of Milwaukee HomeSight Inc.
Submit your entries to the GMAR:

We look forward to hearing your positive stories!
NAR Commitment to Excellence (C2EX) Program is Raising the Bar for REALTOR ® Professionalism
The National Association of REALTORS ® proudly introduces Commitment to Excellence, a cutting-edge program that empowers REALTORS ® to evaluate, enhance, and showcase the highest levels of professionalism. As members, you can get started today by logging into the page below and taking the self-assessment that measures your proficiency in each of the elements of professionalism, known as the C2EX Competencies. Based on your results, the platform will generate customized learning paths, recommend experiences, and provide tools and resources to increase your knowledge and enhance your skill-sets. We encourage you to check out the C2EX program, and pass it along to others in your office and our industry who would benefit from the assessment.
We hope you enjoyed Issue #1 of Ethics Exchange 2020 brought to you by the Greater Milwaukee Association of REALTORS ® (GMAR). The GMAR created this newsletter, each issue dedicated to a unique issue, because the REALTOR ® Code of Ethics, on which our industry is built, is the foundation of what it means to be a REALTOR ® .
Your proactive support of the Code of Ethics will assure your fellow REALTORS ® , as well as members of the public, that every member of GMAR operates under the highest ethical standards.
Questions, comments or concerns regarding this issue can be directed to
Scott Bush at the GMAR Office (414-778-4929 or