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The National Association of REALTORS® and Phoenix REALTORS® have reached an agreement in a dispute about a non-REALTOR® membership option the local association began offering this year. Under the agreement, announced Thursday, Phoenix REALTORS® has made changes to comply with the NAR Constitution and Bylaws. Phoenix REALTORS® will continue to sell certain products to nonmembers.
The dispute centered around concerns that the Phoenix REALTORS®’ offering conferred local association membership outside of the REALTOR® organization in violation of the NAR Constitution and Bylaws, which risked causing confusion for consumers and weakening the REALTOR® brand.
In November, Phoenix REALTORS® announced that, on Jan. 1, it would begin offering a new option called “MLS Choice.” NAR raised a concern that, as structured, the offering constituted a new membership category and, therefore, was not in compliance with the NAR Constitution and Bylaws. Those governing documents require real estate professionals who join a local association to also join the state and national association. This requirement, known as the three-way agreement, streamlines adherence and accountability on all three levels and creates alignment around member communications, benefits and advocacy efforts. The agreement’s framework enables NAR, state and local organizations to mobilize in a unified way, adding power and urgency to the REALTOR® voice. It also grants local and state associations the right to use the term REALTOR®.
More: How does the national, state, and local membership requirement benefit NAR members?
State and local associations that don’t comply with NAR’s Constitution and Bylaws risk losing their charter, along with their ability to use the term REALTOR® or participate in the federated structure that underlies the REALTOR® organization.
Upholding the REALTOR® Brand
In accordance with the agreement, Phoenix REALTORS® has eliminated the MLS Choice option but will continue to sell certain products and services to nonmember licensees who purchase MLS access.
“Phoenix REALTORS® took the necessary steps to come back into compliance with the NAR Constitution and Bylaws,” NAR said in a statement.
“As Phoenix REALTORS® makes clear, its non-REALTOR® MLS offering is not a membership in the REALTOR® organization, and licensees who purchase it are not REALTORS®, may not use the REALTOR® mark and do not belong to local, state or national REALTOR® associations or have access to the many benefits of REALTOR® membership,” NAR said in its statement. “This matter was never about MLS access. Phoenix REALTORS®’ ARMLS is and has long been open to nonmembers. MLSs have local discretion to determine individual participation requirements. We are pleased to have reached this resolution, which protects the rigorous standards of the REALTOR® brand and the integrity of the Code of Ethics. We look forward to continuing to work with Phoenix REALTORS® in service of our shared mission.”
Phoenix REALTORS® issued a statement, saying, in part, “Phoenix REALTORS® remains committed to the REALTOR® brand, the three-way agreement and the benefits made possible by the relationship between the Phoenix association, Arizona Association of REALTORS® and NAR. This outcome supports both Phoenix REALTORS®’ and NAR’s ultimate goal of helping REALTOR® members succeed and the real estate industry at large thrive.”
NAR Issues Guidelines to REALTOR® Associations
NAR has issued guidelines to state and local associations on what it means to follow the NAR Constitution and Bylaws when providing products and services to nonmembers. The guidelines clarify that nonmember products and services may not be:
- Advertised and marketed explicitly or implicitly as a membership
- Made available in exchange for annual dues rather than for purchase or at a fee
- Made available as a bundle of products and services similar to a REALTOR® membership
- Associated with membership rather than MLS participation
- Offered in a manner that seeks to circumvent the three-way agreement and the requirement for membership in the national and state associations
- Offered in a manner that results in trademark infringement or potentially dilutes the REALTOR® brand
- Offered in a manner that involves false, deceptive or misleading practices or representations
The NAR guidance focuses on only REALTOR® associations contemplating the sale of products and services to nonmembers. It doesn’t address MLS participation for nonmembers because association-owned MLSs have long had the option of allowing non-members to participate. This is determined at the local level, not by NAR.
