Clarification on ADRE Bulletin

by Scott M. Drucker, Esq. on August 23, 2013

Recently, the Arizona Department of Real Estate issued a Real Estate Commission Bulletin titled Volume 2013 ▪ Issue 2. While this Bulletin contains a wealth of information, one point might cause confusion among members of the Arizona Association of REALTORS® (AAR). 

iStock_000001146718SmallContained within the Bulletin is a reference guide titled Resources for Information.  As part of this guide, the Bulletin states, “By Arizona law, disputes on commissions are to be handled through the Arizona Court system.”  However, by becoming and remaining a member of AAR (or a participant in an Arizona REALTOR® MLS), real estate licensees have consented to arbitration as provided by AAR under its Rules and Regulations.  It is therefore critical to keep in mind a REALTORS’® obligations set forth in Article 17 of the Code of Ethics and Standards of Practice of the NATIONAL ASSOCIATION of REALTORS®.  Article 17 reads in part:

In the event of contractual disputes or specific non-contractual disputes as defined in Standard of Practice 17-4 between REALTORS® (principals) associated with different firms, arising out of their relationship as REALTORS®, the REALTORS® shall mediate the dispute if the Board requires its members to mediate. If the dispute is not resolved through mediation, or if mediation is not required, REALTORS® shall submit the dispute to arbitration in accordance with the policies of their Board rather than litigate the matter.

Based on the above, REALTORS® engaged in a dispute arising out of the real estate business as defined by Article 17 of the Code of Ethics are prohibited from pursuing their disputes by way of civil litigation.  Rather, Arizona REALTORS® are required to participate in mediation in an effort to settle their differences.  Mediation involves an objective third‐party REALTOR® mediator who works with the parties to assist them in reaching a mutually agreed‐upon resolution.  If the mediation is successful and the parties reach and sign an agreement, it becomes judicially enforceable.  Should mediation fail to resolve the dispute, the REALTORS® must then pursue the matter through arbitration with AAR. In that instance, an arbitration hearing will be scheduled and a hearing panel will determine the successful party.  For more information on the dispute resolution programs offered by AAR, visit www.aaronline.com/resolve-disputes.

Finally, it should be remembered that many difficulties between REALTORS® result from misunderstanding or miscommunication.  Open, constructive discussion often resolves questions or differences, eliminating the need for further action.  

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Clarification on ADE Bulletin » Phoenix Association of REALTORS®
September 27, 2013 at 2:58 pm

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