Letter of The Law | Practice Changes and Amendments

Be Ready for Changes in Practice on August 17

As we implement the new practice changes, Michigan Realtors® has curated a video playlist below to address the settlement requirements with answers to many questions that members have been concerned about. Also, don’t forget to bookmark the legal resources page at Michigan Realtors® to stay attuned to all the developments as we move forward as an industry. The page is updated regularly with compliant real estate forms and new guidance from both Michigan Realtors® and the NAR. 

Source: Michigan REALTORS^® (MR)

GOING THROUGH THE CHANGES

Source: A SEBAR Production

New SEBAR REALTOR^® Forms

These forms have been developed as an optional tool to assist you in streamlining various processes and ensuring compliance with the settlement terms. While the use of these forms is not mandatory, it is important to note that these forms are not intended to be utilized without brokerage approval.

The new SEBAR REALTOR® Forms have been added to the SEM Paragon MLS Documents. 

Compensation Agreement Between Brokers

Exclusive Buyer Agency - Designated

Exclusive Buyer Agency - Traditional

Notice of Buyer Agency

Unrepresented Buyer Disclosure

Source: Southeastern Border Association of REALTORS^® / Southeastern Michigan Multiple Listing Service

Policy Matters | Public Act 122 Ends a Predatory Practice

That is It

Source: Brad Ward, Esq. Vice President of Public Policy & Legal Affairs - Michigan REALTORS^® (MR)

Helpful Guides From NAR

NAR FAQ’s UPDATED

REGARDING BUYER BROKERAGE AGREEMENTS

Q: In the buyer agreement, can buyers and buyer brokers agree to a range of compensation?

A: No. Under the settlement, any compensation agreed to in the written buyer agreement must be objectively ascertainable and not open-ended. For example, a written buyer agreement cannot have a commission that is “buyer broker compensation shall be whatever amount the seller is offering to the buyer” or "between X and Y percent." Importantly, NAR policy will not dictate the amount of compensation agreed between buyers and buyer brokers (e.g., $0, X flat fee, X percent, X hourly rate).  

Q: Should active buyer agreements entered into before the MLS policy change be amended to make sure any compensation is not open-ended and is objectively ascertainable?

A: Yes. MLS Participants working with a buyer after the effective date of the policy should take steps to ensure that the buyer has agreed to the necessary terms required by the settlement agreement.

Q: Should active buyer agreements entered into before the MLS policy change be amended to remove any provision that authorizes the buyer broker to keep any offers of compensation exceeding the amount of compensation agreed with the buyer?

A: Yes. MLS Participants working with a buyer after the effective date of the policy should take steps to ensure that the buyer has agreed to the necessary terms required by the settlement agreement.

Source: National Association of REALTORS® (NAR)

Legal Action Update

Many of you may have heard about a recent lawsuit filed against NAR, Michigan Realtors®, Realcomp II, and three local boards, in which it is asserted that Realtor-MLSs must provide access to non-members. While we do, of course, take all lawsuits seriously, please be aware that this argument has been made (and lost) in several lawsuits around the country, including cases that are binding here in Michigan. Not only does Michigan Realtors® take all legal action seriously, but we take our value proposition to membership extremely seriously. Michigan Realtors® prides itself on delivering resources for professional development, legal compliance, business networking, and advocacy for property owners, consumers, and the real estate industry. We will answer the Complaint in Court, while continuing to deliver on our core mission – especially through this most important time for our industry when our services will matter most.

Download Michigan Realtor® Magazine | August 2024

Source: Michigan REALTORS^® (MR)

Special Notice

As REQUIRED per the NAR Settlement the compensation field in the Southeastern Michigan MLS was removed the week of August 12, 2024. Offers of compensation will no longer be permitted AT ALL through the MLS. This includes communications in the comments, adding compensation information in ShowingTime, SentriLock or any vendor or site that is an aggregator.  

It is important to read upcoming newsletters and emails from SEM MLS and SEBAR as we will be providing important information on upcoming deadlines, MR forms and new required policies. 

NOTE: Beware of the optics of publicly engaging in discussions on how to circumvent the rules and commission discussions. Remember, social media is NOT private even in private groups, it can be shared.

As always, please reach out to the SEM MLS office for questions or concerns. 

Shannon Harner, RCE, C2EX, AHWD, e-PRO

Chief Executive Officer

Source: Southeastern Border Association of REALTORS^® / Southeastern Michigan Multiple Listing Service

NAR Settlement FAQs

Settlement Overview and Key Terms

Source: National Association of REALTORS® (NAR)

Fair Housing Course Requirement & M1

Begins January 1, 2025

As most of you are aware, the NAR Board of Directors approved a motion in 2023 that beginning in January 2025, all active (Status A and P) Realtors and Realtor Associates (Member Type R and RA) must take a fair housing course every 3 years.

The M1 Beta system has been updated so AMSs can start their testing and we have notified our M1 Tech distribution group and updated their developers documentation.

We wanted to let the associations know how this will work in M1 and answer any questions you may have and provide the following information.

POLICY

All active R/RA members must take a fair housing course every 3 years.

This requirement begins January 1 2025 and the first cycle will run January 1 2025 through December 31 2027.

For any member who does not meet this requirement by the deadline, the POEs will change the member’s status to the special status S (just as you do for COE) and by March 1 the POE will terminate the members (Status T) who have not met this requirement.

Realtor Emeritus are exempt starting the year after they are approved by Emeritus by NAR’s BOD (just the same as with NAR dues and the COE waivers).

There is no “new” fair housing course for New Members. The associations need to make sure that as part of their new member orientation their new member completes one of the fair housing courses.

Anything the member may have done for fair housing courses before January 1 2025 will not count so they cannot use a course they took in 2024 for example to count for this requirement.

PROCESS

There will be six options the member can choose from to meet this requirement. Four of those are hosted by NAR and NAR will add the course to M1.

The first cycle (2025-2027) will be called Cycle 8 to match up with COE which will also be Cycle 8 for consistency.

It is important to note that the option the member uses in a cycle cannot be re-used for a following cycle and must be completed within the cycle. So if, for example, if a member earns the AHWD certification, for it to count it must be earned within the cycle and cannot be used again for a future cycle.

The options are:

Fair Haven (Course Code FHVN). This is an online, free, self paced course hosted by NAR. NAR will add these records to M1. POEs will not be able to add, change or delete these records.

Note: this is not the same as the current Fair Haven. Fair Haven is currently being rewritten to be longer and contain more content and will be ready by January 2025.

Bias Override (Course Code BOVR). This course is live (in person or online) and is an NAR course. NAR will add these records to M1. POEs will not be able to add, change or delete these records.

At Home With Diversity Course Only (Course Code HWD). Member can take the AHWD course without going on to earn the certification. The “course only” option will count as a fair housing course. This is an NAR course and NAR will add these records to M1. POEs will not be able to add, change or delete these records.

At Home with Diversity Certification (AHWD). This remains as an NAR certification and NAR will continue to add this certification in M1. Please note a member can use this as an option only once and only for the cycle in which they earn this certification.

Fair Housing course (FAIRH) – associations can develop their own fair housing course for this requirement. When associations do this, they are responsible for adding this course code to M1

 Also, states can also work with their state licensing bodies to include our fair housing as part of their licensing process. Again, associations would be responsible for adding this to M1. In both cases, the Course Code is FAIRH.

Note: when developing your own course, the time length and content outline requirements have been set by NAR and you need to follow that when developing your course. That information will be included in the July issue of M1 News which will publish at the end of July.

As with COE, any POE can add a FAIRH for any member in M1.

Special note about C2EX: having the C2EX endorsement in and of itself is not an option for this requirement. However, part of earning the C2EX endorsement is completing the Fair Haven course. As an NAR course, NAR will add the Fair Haven course to M1, and again it must be taken within a cycle for it to count for that cycle, so you will see this represented in the M1 reports as Fair Haven.

TOOLS

We will have the following tools for POEs in place in M1 by the start of the cycle (January 2025).

Member record accordion: when viewing a member record in M1 you will see an accordion for Fair Housing that will show any FHVN, BOVR, HWD or FAIRH courses added to the member’s record. As AHWD is a Certification and will remain so, that will continue to appear in the Certification accordion.

Fair Housing Report: the M1 home page will have a Fair Housing report, very similar to the Code of Ethics one where the POE can run a ‘with’ or ‘without’ report and print or save as csv.

Fair Housing Dashboard: the M1 Insights Dashboard will have a Fair Housing dashboard, very similar to the Code of Ethics one where the POE can view Complete and Incomplete.

Please note there will be one difference with the Fair Housing reports and dashboards as opposed to the COE one. You may have members who decide to do more than one option. They may complete both the Fair Haven and Bias Override for example. When this happens they will appear on the report and dashboard as many times as the options they complete. The statistics on the dashboard will only count the member once.

Please be sure to watch the monthly M1 News between now and January for more information.

And be sure to contact us with any questions.

M1/Ecommerce Support Group

poesupport@nar.realtor

1-800-868-3225

Fair Housing Education and Resources for Realtors®

April is Fair Housing Month, but each day is an opportunity to reaffirm our commitment to Fair Housing. In an effort to build upon NAR’s Fair Housing ACT Plan (ACT = Accountability, Culture Change, and Training), we encourage members to complete these available training opportunities:

• Realtors® Commitment to Excellence (C2EX)
• Bias Override: Overcoming Barriers to Fair Housing;
• Fair Haven: A Fair Housing Simulation;
• “At Home with Diversity” Certification.

Completing these four programs will empower Realtors® to confront their own biases and demonstrate a commitment to offering equal professional services to all. Through action and education, we can work together to end discrimination in housing.

Additionally, visit our Fair Housing Resources web page for a compilation of videos, articles and statewide education opportunities.

Source: National Association of REALTORSR® (NAR)

NAR's Board of Directors approved a change to the Code of Ethics training requirement, extending it from every two years to every three years. This extends the current cycle deadline from March 1, 2022, to Dec. 31, 2024.

REALTORS® are required to complete ethics training of not less than 2 hours, 30 minutes of instructional time. The training must meet specific learning objectives and criteria established by the National Association of REALTORS®. 



Training may be completed through NAR’s online courses or through another method, such as online or classroom courses via local/state associations. Read the consequences for failing to complete Code of Ethics training.

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