Guide to Filing an Ethics Complaint or Request for Arbitration

The NATIONAL ASSOCIATION OF REALTORS® in 1913 adopted the Code of Ethics. Since then, REALTORS® everywhere have agreed to meet its high standards. This process is a very important part of a REALTOR® Board or Association and helps to ensure honorable, faithful, and competent service to clients, customers, and other members of the public by enforcing the Code of Ethics. These guidelines were prepared to help you understand the process.

NOTE: The Term REALTOR® or REALTORS® are registered trademarks of the National Association of REALTORS®. To use the mark you must be a real estate professional who is a member of the National Association and who subscribes to a strict Code of Ethics.

The first thing that must be determined in processing a complaint with Aspire North REALTORS® is whether the real estate agent involved is a REALTOR®. Not all real estate agents are REALTORS®. Only those who belong to a Board/Association can use the term REALTOR®. By joining a Board/Association, all members agree to abide by the Code of Ethics as a continuing condition of membership. It is because of their obligation to abide by the Code of Ethics that you can file a complaint at a REALTOR® Board or Association.

You may have to consider whether your complaint concerns an ethical* matter or an arbitration** of a dispute.

*An ethics complaint charges that a REALTOR® has violated an Article(s) of the Code of Ethics.

**Arbitration is a means of resolving a dispute arising out of a real estate transaction (monetary) that the parties have been unable to solve themselves.

Any person, whether a member or not, may file a complaint against a REALTOR® alleging a violation of the Code of Ethics, providing the complaint:

  1. Is in writing
  2. Is signed by the complainant
  3. States the facts surrounding the case
  4. Is filed within 180 days after the facts became known

The complainant may file a complaint from any location providing it is filed with a Board/Association having jurisdiction over the individual named in the complaint.

  • REALTORS® and secondary members who are principal brokers;
  • REALTORS® or secondary members who are not principals, provided their principal broker joins in the request;
  • clients or customers of the REALTORS®

The request must also:

  1. Be in writing
  2. Be signed by the complainant
  3. Indicate the amount in dispute
  4. Be filed within 180 days after the facts became known

Aspire North REALTORS® provides arbitration facilities as a service to its members. Arbitration is not a disciplinary proceeding nor does it award damages. By becoming and remaining a member of a REALTOR® Board/Association, each REALTOR® binds himself/herself to arbitrate certain disputes.

BE AWARE THAT NOT EVERY SITUATION MAY BE ARBITRATED AT THE BOARD/ASSOCIATION.

There are conditions and limitations to be considered, which will be explained to you by the Board/ Association as the process continues.

Aspire North REALTORS® has limitations to its authority regarding its members. Below is a list of those limitations:

  1. The Board/Association cannot try a member for violations of the Michigan real estate license law or any other alleged violation of the law. It has jurisdiction only over violations of membership duties. The Michigan Department of Labor and Economic Growth has sole control of the real estate agent’s license to sell real estate. If you think a person has violated the law, you should be contacting that agency.
  2. For the same reason, the Board/Association cannot suspend or terminate the license of one of its members.
  3. The Board/Association can, in the case that an ethics violation is determined by a due process hearing procedure, administer discipline to the REALTOR® in one or more of the following ways:
    • send a letter of warning or reprimand
    • direct the REALTOR® to attend an Ethics class or other training appropriate to the violation
    • place the REALTOR® on probation
    • suspend the REALTOR’s membership
    • expel the REALTOR® from membership
  4. Money damages may not be part of an Ethics proceeding.
  5. The Board/Association can arbitrate certain money disputes and must in some situations, but the member of the public must agree in writing to arbitrate the dispute and be bound by the decision.
  6. The award in arbitration may not be more than the amount in dispute and under no circumstances can “punitive” damages be awarded.

Now that you know the ground rules, if you wish to file a complaint, here is how you do it.

ETHICS COMPLAINTS:

If you want to file an Ethics complaint, you need to follow these steps:

  1. Complete and sign the Ethics Complaint Form supplied by Aspire North REALTORS®. This form requests you to name the REALTOR(S)® in question as the Respondent(s).
  2. List the Article(s) and/or Standards of Practice of the Code of Ethics that you think the REALTOR® has violated. (You will also be supplied with a copy of the Code of Ethics.)
  3. Attach an explanation of the situation surrounding the complaint. Be as specific as possible. State what, when, where, why, and how you think each Article was violated.
  4. Attach copies of any and all pertinent documents such as listing agreements, purchase and sales agreements, addendum, etc. If you have notarized statements from witnesses, include those also.
  5. Send the entire package, keeping a copy for you, to Aspire North REALTORS® to the attention of Jennifer Kowal, Professional Standards. Your complaint will then be processed through the Grievance Committee.

ARBITRATION REQUESTS:

The process is very similar to filing an Ethics complaint. Aspire North REALTORS® will supply a Request for Arbitration Form. Steps to follow are:

  1. Name the REALTOR(S)® in question as the Respondent(s)
  2. Indicate the amount in dispute
  3. Include an explanation of the situation. State why you feel you are entitled to an award of some kind. Remember; don’t include allegations of unethical conduct in your argument. If you think there have been unethical violations, they must be handled separately with an ethics complaint.
  4. Attach copies of any and all pertinent documents such as listing agreements, purchase and sales agreements, closing statements, etc., and any notarized statements from witnesses.
  5. An arbitration filing fee of $250 is required.
  6. You will be asked to sign an arbitration agreement indicating your commitment to abide by the decision of the Hearing Panel.
  7. Send the entire package, keeping a copy for you, to Aspire North REALTORS® to the attention of Jennifer Kowal, Professional Standards. Your request will then be processed through the Grievance Committee. Remember that it is not unusual for a Board/Association to receive an ethics complaint and an arbitration request surrounding the same set of circumstances. If you think the REALTOR(S)® violated the Code of Ethics and you have a monetary dispute with him/her, you must complete BOTH forms.

There are two committees under Aspire North REALTORS® that handle complaints: the Grievance Committee and the Professional Standards Committee. Their functions are described below.

GRIEVANCE COMMITTEE

Ethics: This committee reviews complaints when they are received at Aspire North REALTORS®. The committee determines whether the complaint has sufficient merit for further consideration, somewhat like a “Grand Jury.” It does not determine guilt or innocence. The committee will either:

  1. Forward the case for a hearing;
  2. Dismiss it, if the complaint is determined to be frivolous, harassing, or unfounded; or
  3. Postpone its decision for the purposes of getting more information from the complainant or determining if the case may be more appropriately considered for arbitration.

Also, before they reach a decision, the Committee may request a reply from the Respondent regarding your complaint.

If the Committee dismisses your complaint, you have the right to appeal the dismissal to the Board of Directors. In the case of an appeal, the Directors re-examine the materials submitted to the Grievance Committee and can either uphold or overturn the Grievance Committee’s decision.

If the complaint is to be given further consideration, it will be sent to the Professional Standards Committee for a Hearing.

Arbitration: The Grievance Committee’s role in arbitration requests is different from Ethics complaints. Its function is only to make such a preliminary investigation to determine whether the matter is subject to arbitration by Aspire North REALTORS®. Arbitration is sometimes a duty and sometimes a privilege. The Committee must decide whether your situation fits into the “duty” or the “privilege” category. It does this by determining:

  1. Whether you are authorized, under the rules, to invoke arbitration
  2. Whether the controversy described is an arbitration matter
  3. Whether the arbitration is mandatory or voluntary to the people involved (this simply means whether arbitrating the dispute is compulsory, or not)
  4. Whether either the amount in dispute is too small or too large, or the matter is too legally complicated for the Board/Association to consider.

Such a review could result in the release of Aspire North REALTORS® members from the obligation to arbitrate, and thus free you to seek recourse in order to resolve the dispute.

If the Grievance Committee determines that a matter is arbitrable, it will also notify the parties that a mediation procedure is available as a preliminary, voluntary alternative to arbitration [this procedure is available through Aspire North REALTORS' partnership with Conflict Resolution Services (CRS), and can begin by calling CRS at 231-941-5835].

In either ethics or arbitration cases, you will be informed promptly of the Grievance Committee’s decision. If the Grievance Committee forwards the complaint or request for a hearing, it is assigned to the Professional Standards Committee.

PROFESSIONAL STANDARDS COMMITTEE

The function of this committee is to hold ethics and arbitration hearings. If the Respondent(s) has not already been requested to reply to your complaint, he/she will be at this time. A hearing will then be scheduled and you will be notified of the hearing’s date, time, and location. These hearings provide an opportunity for the Complainant and Respondent to explain “his or her side of the story” by presenting testimony and witnesses if any.

Once all the facts have been presented, a Hearing Panel — consisting of members of the Association chosen on the basis of their experience, temperament, and objectivity — will determine whether the Code of Ethics has been violated or, in the case of arbitration, how the dispute should be settled. Aspire North REALTORS® will inform you about each step of this process as it occurs. You will also be given instructions about the hearing procedures prior to the hearing. The entire process will usually take a minimum of 90 days, but may take longer.

If you have any questions related to filing your complaint or request, please call Aspire North  REALTORS® at 231-947-2050.

* In some situations you will be directed to the State Association for filing a complaint or request for arbitration. This is known as the Regional process.