NAR moves to revoke Phoenix Realtors charter
In an email to leaders, the association said PAR’s refusal to stop offering its MLS Choice option leaves NAR “no choice” but to defend its trademark and model.
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 Realtor 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 said in a statement sent to Real Estate News on Dec. 23 that "MLS Choice is not and never will be a Realtor membership. It is a fee-based subscription. There is a difference between increasing choice and replacing it, and we will always proudly support and champion Realtors."
"We were surprised to learn that NAR would view increased options as a threat, and we've engaged in meaningful discussion with them to help alleviate their confusion," Fegley said. "Our primary goal is to engage in an amicable path forward with NAR so that we can best serve our industry's real estate professionals."
Real Estate News has reached out to Phoenix Realtors for additional comment.
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.