REALTOR® Sarah Takacs has been active with SCR and LLR in many roles for many years and created a short training video on the SCR Grievance Committee.
The SCR Grievance Committee acts as a “grand jury/gatekeeper” for the Professional Standards Committee and Citation Panel for ethics complaints and handles arbitration complaints.
From the 2020 NAR COEAM
Part Three—The Grievance Committee in
Ethics Proceedings
Section 17. Authority
The Grievance Committee is established in Part Two, Section 15 and Part Eight, Section 38 of this Manual, which provide in part:
There will be a standing committee, known as the Grievance Committee, of at least __________ Board Members in good standing, of whom at least a majority shall be REALTORS®. The members of the committee shall be appointed by the President, subject to confirmation by the Board of Directors, for staggered three (3) year terms. The committee shall annually select its own Chairperson and Vice Chairperson (or, alternatively, the President shall annually designate the Chairperson and Vice Chairperson of the committee).
Section 18. Function
The function of the Grievance Committee is clearly distinguishable from the function of the Professional Standards Committee. The Professional Standards Committee makes decisions on matters involving ethics or arbitration. (Revised 05/15)
The Grievance Committee receives ethics complaints and arbitration requests to determine if, taken as true on their face, a hearing is to be warranted. The Grievance Committee makes only such preliminary evaluation as is necessary to make these decisions. While the Grievance Committee has meetings, it does not hold hearings, does not decide whether members have violated the Code of Ethics, and does not dismiss ethics complaints because of lack of evidence. Complainants are not required to prove their case upon submission of their ethics complaint or arbitration request. The Grievance Committee does not mediate or arbitrate business disputes. The Grievance Committee will hold regularly-scheduled meetings and/or review complaints not later than forty-five (45) days after receipt of the complaint. (Revised 05/15)
In evaluating ethics complaints, the Grievance Committee may require a written response from the respondent(s) only if the committee is in need of additional information pertaining to the questions in Section 19, Grievance Committee’s Review of an Ethics Complaint, and the complainant cannot provide such information. In such instances the respondent(s) should be provided with a copy of the ethics complaint and advised that failure to respond may be the basis for a charge of having violated Article 14 of the Code of Ethics. (See Form #E-4, Grievance Committee Request for Information [Ethics Complaint] and Form #E-5, Response to Grievance Committee Request for Information, Part Six of this Manual). In evaluating arbitration requests, the Grievance Committee may request a written response to the arbitration request from the respondent(s) only if the committee is in need of additional information pertaining to the questions in Section 42, Grievance Committee’s Review and Analysis of a Request for Arbitration, and the complainant cannot provide such information. (See Form #A-5, Grievance Committee Request for Information [Arbitration Request] and Form #A-6, Response to Grievance Committee Request for Information, Part Thirteen of this Manual.) If no response is filed within the time allotted, the Grievance Committee shall make its determination as to whether an arbitration hearing should be scheduled based upon the information set forth in the arbitration request. (Revised 11/15)
When Grievance Committees refer ethics complaints and arbitration requests for hearing, hearing panel chairs can determine if questions about
(1) whether ethics complaints and arbitration requests are timely filed,
(2) whether arbitrable issues exist,
(3) whether arbitration requests are too legally complex to be fairly arbitrated, and
(4) other administrative issues
will be addressed through a pre-hearing meeting of the hearing panel or at the outset of the hearing prior to testimony relating to the ethics complaint or arbitration request commencing. If these matters rise during a hearing, the hearing panel will address them at that time.
Dismissals of ethics complaints and arbitration requests by hearing panels can be appealed to the Board of Directors on the same bases as dismissals by the Grievance Committee.
Where such issues are considered at a pre-hearing meeting of the hearing panel, the chair will determine whether the parties may be present, and the extent to which their participation will be permitted. (Revised 05/14)
Section 19. Grievance Committee’s Review of an Ethics Complaint
A. Initial action upon receipt of an ethics complaint
Upon receipt of an ethics complaint from the Professional Standards Administrator, the Chairperson of the Grievance Committee shall review the complaint. Any evidence and documentation attached will be considered only to the extent necessary to determine whether a complaint will be referred for hearing. The Chairperson may assign one or more members of the Grievance Committee to review the complaint and to make any necessary evaluation. The member(s) may, if necessary, gather additional information on the matters complained of from the complainant if additional information is necessary to determine whether a complaint will be referred for hearing. The complaint shall be provided to the assigned members by the Professional Standards Administrator upon instruction from the Chairperson. (Amended 11/15)
The reviewer(s), if appointed, shall complete the assignment promptly and prepare a report and recommendation for the Grievance Committee. After reviewing the report, the Chairperson shall schedule a meeting of the Grievance Committee and may instruct the Professional Standards Administrator to provide members of the Grievance Committee with copies of the case file including the reviewer’s report, if any. At the option of the Board, such file may be sent to the Grievance Committee members prior to the meeting or may be distributed at the meeting. (Amended 4/94)
B. Consideration of an ethics complaint by the Grievance Committee
In reviewing an ethics complaint, the Grievance Committee shall consider the following:
(1) Is the ethics complaint acceptable in form as received by the Committee? If not in proper form, the Chairperson may request that the Professional Standards Administrator contact the complainant to advise that the complaint must be submitted in proper form. (Revised 11/15)
NOTE: If deemed appropriate by the Chairperson, a member of the Grievance Committee may be assigned to contact the complainant and to provide procedural assistance to amend the complaint or resubmit a new complaint in proper form and with proper content. The Grievance Committee member providing such assistance shall ensure that only procedural assistance is provided to the complainant, and that the complainant understands that the member is not representing the complainant or advocating on behalf of the complainant. (Revised 11/15)
(2) Are all necessary parties named in the complaint?
(3) Was the complaint filed within one hundred eighty (180) days of the time that the alleged offense and facts relating to it could have been known by the complainant in the exercise of reasonable diligence or within one hundred eighty (180) days after the conclusion of the transaction or event, whichever is later? (Revised 5/11)
(4) Is the respondent named in the complaint a member of the Board, and was the respondent a member of any Board at the time of the alleged offense?
(5) Is criminal or civil litigation or any government agency investigation or other action pending related to the same facts and circumstances giving rise to the complaint alleging unethical conduct?
(a) If criminal or civil litigation is pending related to the same facts and circumstances giving rise to the complaint alleging unethical conduct, the Grievance Committee shall instruct the Professional Standards Administrator to have Board legal counsel review the complaint filed and advise if any hearing should proceed (presuming the matter would otherwise warrant a hearing), with counsel considering the following:
(1) similarity of factors giving rise to pending litigation or regulatory or administrative proceeding and the ethics complaint
(2) degree to which resolution of the pending litigation or regulatory or administrative proceeding could make consideration of the ethics complaint unnecessary
(3) degree to which pending litigation or regulatory or administrative proceeding would delay prompt disposition of the ethics complaint
(4) the nature of the alleged violation and the extent to which it could impact on cooperation with other Board Members
(5) the assurance of Board legal counsel that consideration of an ethics complaint would not deprive the respondent of due process (Revised 11/18)
(6) Is there any reason to conclude that the Board would be unable to provide an impartial Hearing Panel?
(7) Are the specific Articles cited in the complaint appropriate in light of the facts provided? Should additional Articles be cited? Should certain Standards of Practice be cited in support of the Articles charged? Are any inappropriate Articles cited?
(8) If the facts alleged in the complaint were taken as true on their face, is it possible that a violation of the Code of Ethics occurred? Complainants are not required to prove their case when initially filing an ethics complaint. A complaint may not be dismissed for lack of evidence if the allegation(s), taken as true on their face, could constitute a violation of the Code of Ethics and the complaint is in an otherwise acceptable form. (Revised 11/15)
If all relevant questions have been answered to the satisfaction of the Grievance Committee, and the allegations, if taken as true, could constitute a violation of the Code of Ethics, the Grievance Committee shall refer the complaint to the Professional Standards Committee for a hearing by an ethics Hearing Panel. (Revised 11/15)
C. Appeal from the decision of the Grievance Committee related to an ethics complaint
If the Grievance Committee dismisses the complaint, the notice of dismissal shall specify the reason(s) for dismissing and the complainant may appeal the dismissal to the Board of Directors within twenty (20) days from transmittal of the dismissal notice using Form #E-22, Appeal of Grievance Committee (or Hearing Panel) Dismissal of Ethics Complaint. The complaint and any attachments to the complaint cannot be revised, modified, or supplemented. The complainant may, however, explain in writing why the complainant disagrees with the Grievance Committee’s conclusion that the complaint should be dismissed. If the Grievance Committee deletes an Article or Articles from an ethics complaint, the complainant may also appeal to the Board of Directors using Form #E-22, Appeal of Grievance Committee (or Hearing Panel) Dismissal of Ethics Complaint. The Directors (or a panel of Directors or the Executive Committee) shall consider only the information and documents considered by the Grievance Committee, together with the complainant’s rationale for challenging the dismissal, and render its decision, which shall be final. The parties are not present at the meeting at which the appeal is considered. Appeals of dismissals shall be heard at the Directors’ next regularly scheduled meeting or a special meeting designated for that purpose, but no later than ten (10) days after the date of receipt of the appeal. The Directors’ decision shall be transmitted to the parties within five (5) days from the date of the decision. (Revised 11/15)
D. Criminal or civil litigation or regulatory/administrative proceedings coming to light after an ethics complaint has been referred to an ethics Hearing Panel
If after review of an ethics complaint by the Grievance Committee and referral of the complaint for hearing, it is subsequently discovered that criminal or civil litigation or regulatory or administrative proceedings related to the same transaction or event are pending, the Hearing Panel Chair, in consultation with association legal counsel, will determine whether the hearing will proceed or, alternatively, whether the complaint will be held in abeyance pending resolution of the litigation or regulatory or administrative proceedings. (Revised 11/18)
Part Nine—The Grievance Committee
in Arbitration Proceedings
Section 40. Authority
The Grievance Committee is established in Part Two, Section 15 and Part Eight, Section 38 of this Manual, which provide in part:
There will be a standing committee, known as the Grievance Committee, of at least _________________________ Board Members in good standing, of whom at least a majority shall be REALTORS®. The members of the committee shall be appointed by the President, subject to confirmation by the Board of Directors, for staggered three (3) year terms. The committee shall annually select its own Chairperson and Vice Chairperson (or, alternatively, the President shall annually designate the Chairperson and Vice Chairperson of the committee).
Section 41. Function
The function of the Grievance Committee is clearly distinguishable from the function of the Professional Standards Committee. The Professional Standards Committee makes decisions on matters involving ethics or arbitration (Revised 05/15)
The Grievance Committee receives ethics complaints and arbitration requests to determine if, taken as true on their face, a hearing is to be warranted. The Grievance Committee makes only such preliminary evaluation as is necessary to make these decisions. While the Grievance Committee has meetings, it does not hold hearings, does not decide whether members have violated the Code of Ethics, and does not dismiss ethics complaints because of a lack of evidence. Complainants are not required to prove their case upon submission of their ethics complaint or arbitration request. The Grievance Committee does not mediate or arbitrate business disputes. The Grievance Committee will hold regularly-scheduled meetings and/or review arbitration requests not later than forty-five (45) days after receipt of the request. (Revised 05/15)
In evaluating ethics complaints, the Grievance Committee may require a written response from the respondent(s) only if the committee is in need of additional information pertaining to the questions in Section 19, Grievance Committee’s Review of an Ethics Complaint, and the complainant cannot provide such information. In such instances the respondent(s) should be provided with a copy of the ethics complaint and advised that failure to respond may be the basis for a change of having violated Article 14 of the Code of Ethics. (See Form #E-4) Grievance Committee Request for Information [Ethics Complaint] and Form #E-5, Response to Grievance Committee Request for Information, Part Six of this Manual). In evaluating arbitration requests, the Grievance Committee may request a written response to the arbitration request from the respondent(s) only if the committee is in need of additional information pertaining to the questions in Section 42, Grievance Committee’s Review and Analysis of a Request for Arbitration, and the complainant cannot provide such information. (See Form #A-5, Grievance Committee Request for Information [Arbitration Request] and Form #A-6, Response to Grievance Committee Request for Information, Part Thirteen of this Manual.) If no response is filed within the time allotted, the Grievance Committee shall make its determination as to whether an arbitration hearing should be scheduled based upon the information set forth in the arbitration request. (Revised 11/15)
When Grievance Committees refer ethics complaints and arbitration requests for hearing, hearing panel chairs can determine if questions about
(1) whether ethics complaints and arbitration request are timely filed,
(2) whether arbitrable issues exist
(3) whether arbitration requests are too legally complex to be fairly arbitrated, and
(4) other administrative issues
will be addressed through a pre-hearing meeting of the hearing panel or at the outset of the hearing prior to testimony relating to the ethics complaint or arbitration requests commencing. If these matters rise during a hearing, the hearing panel will address them at that time.
Dismissals of ethics complaints and arbitration request by hearing panels can be appealed to the Board of Directors on the same bases as dismissals by the Grievance Committee.
Where such issues are considered at a pre-hearing meeting of the hearing panel, the chair will determine whether the parties may be present, and the extent to which their participation will be permitted. (Revised 05/14)
Section 42. Grievance Committee’s Review and Analysis of a Request for Arbitration
A. Initial action upon receipt of a request for arbitration
Upon receipt of a request for arbitration, the Professional Standards Administrator shall refer the arbitration request to the Chairperson of the Grievance Committee. The Chairperson shall review the arbitration request and any evidence and documentation attached. The Chairperson may assign one or more members of the Grievance Committee to review the request and to make any necessary evaluation. The member(s) may, if necessary, gather additional information on the matters complained of from the complainant if additional information appears necessary to make a knowledgeable disposition of the arbitration request. The request shall be provided to the assigned members by the Professional Standards Administrator upon instruction from the Chairperson. (Amended 11/15)
The reviewer(s), if appointed, shall complete the assignment promptly and prepare a report and recommendation for the Grievance Committee. After reviewing the report, the Chairperson shall schedule a meeting of the Grievance Committee and may instruct the Professional Standards Administrator to provide members of the Grievance Committee with copies of the case file including the review’s report, if any. At the option of the Board, such file may be sent to the Grievance Committee members prior to the meeting or may be distributed at the meeting. (Amended 4/94)
B. Consideration by the Grievance Committee of a request for arbitration
In reviewing a request for arbitration, the Grievance Committee shall consider the following:
(1) Is the request for arbitration acceptable in the form as received by the committee? If not in proper form, the Chairperson may request that the Professional Standards Administrator contact the complainant to advise that the request must be submitted in proper form. (Revised 11/15)
NOTE: if deemed appropriate by the Chairperson, a member of the Grievance Committee may be assigned to contact the complainant and to provide procedural assistance to amend the request or resubmit a new request in proper form and with proper content. The Grievance Committee member providing such assistance shall ensure that only procedural assistance is provided to the complainant, and that the complainant understands that the member is not representing the complainant or advocating on behalf of the complainant. (Revised 11/15)
(2) Are all necessary parties named in the request for arbitration? The duty to arbitrate is an obligation of REALTOR® principals. REALTOR® principals include sole proprietors, partners in a partnership, officers or majority shareholders of a corporation, or office managers (including branch office managers) acting on behalf of principals of a real estate firm.
(3) Was the request for arbitration filed within one hundred eighty (180) days after the closing of the transaction, if any, or within one hundred eighty (180) days after the facts constituting the arbitrable matter could have been known in the exercise of reasonable diligence, whichever is later?
(4) Are the parties members in good standing or otherwise entitled to invoke arbitration through the Board’s facilities? Were the parties members at the time the facts giving rise to the dispute occurred?
(5) Is litigation concerning an otherwise arbitrable matter pending in connection with the same transaction?
NOTE: No arbitration shall be provided on a matter pending litigation unless the litigation is withdrawn with notice to the Board and request for arbitration, or unless the court refers the matter to the Board for arbitration.
(6) Is there any reason to conclude that the Board would be unable to provide an impartial Hearing Panel?
(7) If the facts alleged in the request for arbitration were taken as true on their face, is the matter at issue related to a real estate transaction and is it properly arbitrable, i.e., is there some basis on which an award could be based?
(8) If an arbitrable issue exists, are the parties required to arbitrate or is their participation voluntary?
(9) Is the amount in dispute too small or too large for the Board to arbitrate?
(10) Is the matter too legally complex, involving issues that the arbitrators may not be able to address in a knowledgeable way?
(11) Is there a sufficient number of knowledgeable arbitrators available?
If all of the relevant questions have been considered, and a majority of the Grievance Committee conclude that the matter is properly arbitrable by the Board, the Grievance Committee shall send the request for arbitration to the Chairperson of the Professional Standards Committee for arbitration by an arbitration Hearing Panel. Complainants are not required to prove their case when initially filing an arbitration request. An arbitration request may not be dismissed for lack of evidence if the arbitration request is otherwise arbitrable, timely filed, and the arbitration is one of the circumstances described in Section 44, Duty and Privilege to Arbitrate. (Revised 11/15)
C. Appeals from the decision of the Grievance Committee related to a request for arbitration
If the Grievance Committee determines that a matter should not be arbitrated by the Board (because of the amount involved or the legal complexity, or for any other valid reason specified in the Grievance Committee decision and written report), the reason(s) for dismissing the request will be stated in the notice of the dismissal. Any party may appeal the decision to the Board of Directors within twenty (20) days from transmittal of notice of the committee decision using Form #A-20, Appeal of Grievance Committee (or Hearing Panel) Dismissal or Appeal of Classification of Arbitration Request. The request for arbitration and any attachments cannot be revised, modified, or supplemented. The party appealing the dismissal may, however, explain in writing why they disagree with the Grievance Committee’s conclusion that the request for arbitration should be dismissed. The Hearing Panel can also dismiss the arbitration request if the Hearing Panel concludes the matter is not arbitrable. Appeals of dismissals/classifications shall be heard at the Directors’ next regularly scheduled meeting or at a special meeting designated for that purpose, but no later than ten (10) days after the date of receipt of the appeal. The Directors’ decision shall be transmitted to the parties within five (5) days from the date of the decision. (Amended 11/15)
The materials which were presented to the Grievance Committee when the Grievance Committee made its decision will be presented to the Board of Directors and considered with the appeal, together with any party’s rationale challenging the Grievance Committee’s dismissal. The parties to the arbitration (complainant and respondent) do not have the right to appear at the appeal hearing before the Directors. In the event a request for arbitration is dismissed, any deposit submitted by the complainant shall be returned to the complainant. (Revised 11/12)
Posted by: Byron King on 07/28/20 (This information is only accurate as of 07/28/20. You must contact SCR for updates and changes to this information after 07/28/20 as laws and regulations may change over time. SCR 803-772-5206 or email Byron)