By virtue of becoming and remaining a member of an Association and having signed an agreement to abide by Association bylaws, every member agrees to bind themselves and the company
for whom they act to submit disputes “arising out of a real estate transaction” to arbitration as defined in Article 17 of the National Association of REALTOR® Code of Ethics.
Furthermore, membership termination from the Association will not absolve the member of arbitration duty for disputes arising when the person was a member of the Association.
Disputes subject to arbitration include disputes with other REALTOR® members arising out of real estate business and their relationship as REALTOR® (usually over the distribution
of a commission) and in specified contractual disputes with a member’s client arising out of an agency relationship between the member and client (provided the client agrees to submit
the dispute to binding arbitration with the association and be bound by the arbitration award).
REALTOR® members filing for arbitration of a dispute involving the responsible broker at the time of the dispute (but not between the member and responsible broker) must have the
responsible broker join in the dispute and filing of a complaint.
Members and the Association are not bound to arbitrate disputes between members of the same firm unless each party agrees in writing to the arbitration of such disputes under the
Association’s facilities or a copy of the Independent Contractor’s Agreement specifying that the matter be considered at the Association is presented. Similarly, if members enter
into separate agreements to arbitrate disputes outside of the Association (e.g. the American Arbitration Association); this separate agreement would supersede the obligation to
arbitrate the dispute at the Association.
This would not include an attempt to bypass the arbitration process by filing a civil lawsuit against another member. In this case the respondent member can request the court to
compel arbitration at the local association in accordance with the arbitration agreement; however, failure by the respondent to make this request of the court would waive the right
of the parties to arbitrate at the local association.
If a member holds membership in several different associations, another member can file a complaint at any association where the other member holds membership or where both members
have common membership.