NAR moves to revoke Phoenix Realtors charter 

The National Association of Realtors has "made the difficult but necessary decision to initiate the charter revocation process" against Phoenix Realtors, according to an email sent to leaders.

At issue: A program called MLS Choice. Phoenix told NAR on December 23 that it would not "categorically withdraw" MLS Choice," adding that the offering "simply enables non-Realtors to obtain MLS services and other products and services such as transaction forms and education, which are products and services offered by Realtor associations and MLSs to non-Realtors across the country."

What NAR had to say: NAR's General Counsel Lesley Muchow said in the email sent to leaders on Dec. 23 that the organization "has no choice but to defend the Realtor trademark, our integrated model, and Realtors and consumers they serve. Without action, we put the benefits NAR members rely on — such as market research, business resources, a unified advocacy platform, and a single Code of Ethics — at risk."

An NAR spokesperson echoed these remarks in a statement sent to Real Estate News, adding: "Under their charters from NAR, state and local associations are prohibited from adopting any practice inconsistent with NAR's bylaws and Constitution. Phoenix Realtors is violating NAR's bylaws and Constitution by offering a non-Realtor membership option."

What Phoenix Realtors had to say: CEO Andy Fegley called the decision to move forward with charter revocation "a disservice to the industry" in a statement sent to Real Estate News, adding:

"We've been transparent from the beginning that the MLS Choice subscription is a scaled-down option of non-membership for real estate professionals to consider. It allows them to ask the question, 'What level of programs and services do I actually need to be successful?' And anyone serving real estate professionals should stand in support of that: creating the ideal environment for success. A 'one-size-fits-all' approach does nothing to spur this industry forward, something that desperately needs to happen."

Fegley reaffirmed his association's commitment "to Realtors and evolving alongside a changing industry — but NAR has clearly committed to hampering innovation. We are prepared to continue defending the necessity of subscription options like MLS Choice, and we stand behind all of the professionals we serve."

How we got here: In an email sent Dec. 18 by NAR to its board of directors and other leaders, Muchow said the national association was taking "necessary action" to defend its three-way agreement, which requires Realtors to join local, state and national associations, and to enforce the NAR constitution and bylaws.

MLS Choice costs $249 annually — less than half the price of a three-tier membership. The Phoenix Realtors site states that real estate professionals who choose it cannot call themselves "Realtors" and will lose access to association benefits including discounted insurance and a broker legal hotline.

What's next: Muchow laid out the charter revocation process in her email:

• NAR president Kevin Sears will ask Phoenix Realtors to "review its reasons for non-compliance" before a panel of 3-5 members of NAR's Executive Committee, appointed by Sears.

• If PAR fails to convince the panel, it will be given another deadline to shut down MLS Choice.

• If it does not comply by the deadline, PAR will face a "show cause" hearing before 7-9 different members of the Executive Committee. If that panel decides to revoke the charter, that recommendation will go before the full Executive Committee, which will make the final call.

• PAR's territory "would become unassigned and available" if its charter is revoked.

NAR said that as this process unfolds, it will reach out to local members and make sure they know what's going on "and the options available to them, including choosing another local association," Muchow said in her email.