Confidential means confidential (Except when it doesn’t)

We all know that a decision of an ethics hearing panel is COMPLETELY CONFIDENTIAL. Except, of course, that it isn’t.

Section 23(j) of the Code of Ethics and Arbitration Manual (CEAM) clearly states that results can only be given to the parties (duh), Board of Directors (which will see it when they meet to review/ratify the decision), members of the original hearing panel, and the President of any other Board in which the offending member has membership. A violation of the public trust can also be forwarded to the State Real Estate Commission.

A little known provision is Section 23(n), which provides the option for local boards to make limited publication the names of those members who have been found in violation of the Code of Ethics twice in a three-year span. This section has to be specifically adopted by a Board in order to be applicable, and is very narrow.

Finally, a party to an ethics complaint may disclose information about the case where it “might vindicate a member’s professional reputation.” (Section 2(e)(1)). All told, though, these things are still pretty confidential.

At the NAR Midyear Meetings an approved change to Section 23(j) might shoot a Very Big Hole in the current confidentiality provisions. As approved, this section now reads (with additions underlined and my notes in [brackets]):

Upon final action by the Directors, the President shall disseminate to the complainant, the respondent, the Board of Directors, the Chairperson and members of the Hearing Panel, Board legal counsel, the President of any other Board in which the respondent holds membership, and any governmental agency as directed by the Board of Directors such notice of the action as the President deems appropriate under the circumstances provided, however, that the nature, form, content, and extent of the notice shall be specifically approved by Board legal counsel prior to dissemination. Board Members [NOTE: ‘Board Members’ here means ‘members of the local association,’ not just members of the Board of Directors], other than those specified, shall be notified only in respect to suspension or expulsion of membership of the Board Member unless the optional procedures established at the end of this Section have been adopted locally or unless notification is required to ensure compliance with the Board’s bylaws (e.g. where a petition for removal of an officer or director must state the reason(s) an officer or director is deemed disqualified from further service.).

This revision was brought to the NAR Professional Standards Committee by an association with bylaws that allow for removal of a Director deemed “incapable of fulfilling the duties for which he was elected” by a petition signed “by not less than one-third of the voting membership or majority of the board of directors….[which] must set forth the reasons the individual is deemed disqualified from further service.”  So with this new rule, the bylaws provision seems to mean that a member who believes an ethics violation constitutes a possible disqualification for service would be able to send a petition to every member of the local association describing the violation and asking them to sign the petition.  And it was made clear at the meeting that the rule applies to bylaws in general, not just bylaws relating to Board service.

So…could a local association adopt a bylaws change that mandates disclosure of the details of every violation of a member? Don’t know, but it seems to me like they could. Should they? Hmmm…