The Bases for Arbitration in the REALTOR System

1
The Bases for Arbitration in the REALTOR? System

• Article 17 of the Code of Ethics
• Arbitration of disputes is limited to the
  conditions of Article 17.

2
Conditions of Article 17

• Contractual disputes and specific non-contractual
  disputes defined in Standard of Practice 17-4
• Between REALTORS? associated with different
  firms
• Arising out of their relationship as REALTORS?

3
Contractual v. Non-contractual

• Contractual Disputes, e.g. cooperating broker v.
  listing broker
• Non-contractual Disputes
  Standard of Practice 17-4
• 17-4(1) 17-4(3) Cooperating broker v.
  cooperating broker no listing broker need be
  named in the arbitration request.
• 17-4(4) Listing broker v. listing broker under
  open listings when the seller agrees to
  participate and be bound by the decision.

4
Arbitrability

• Determined by Grievance Committee.
• Article 17 is basis for Grievance Committees
  decision.
• Section 42 of the Code of Ethics and Arbitration
  Manual (CEAM) sets out Grievance Committee
  procedures in a request for arbitration.
• Appendix I to Part Ten of the CEAM discusses
  Arbitrable Issues.

5
The Uniform Arbitration Act

• Adopted in some form in many states.
• Uniform, but different from state to state
  (e.g. subpoenas).
• Modification of forms in CEAM by state legal
  counsel.

6
Procuring Cause

• Legal Concept v. REALTOR? System
• Listing broker v. owner
• Broker v. Broker

7
Procuring Cause

• General Legal Definition Blacks Law
  Dictionary, Fifth Edition
• The proximate cause the cause originating a
  series of events which, without a break in their
  continuity, result in the accomplishment of the
  prime object. The inducing cause the direct or
  proximate cause. Substantially synonymous with
  efficient cause.

8
"Suggested Factors"

• Appendix II to Part Ten of the CEAM
  Arbitration Guidelines (Suggested Factors for
  Consideration by a Hearing Panel in Arbitration)
• Factor 1 No predetermined rule of entitlement
• Factor 2 Arbitrability and appropriate parties
• Factor 3 Relevance and admissibility
• Factor 4 Communication and contact
  abandonment and estrangement
• Factor 5 Conformity with state law
• Factor 6 Consideration of the entire course of
  events (The Questions)

9
Procuring Cause Concepts

• Uninterrupted series of events
• Abandonment
• Estrangement

10
Common Misconceptions

• The Threshold Rule
• The Contract Rule
• The Agency Rule

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How Many Procuring Causes are there??
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A Framework for Analysis

• Nature and Status of the Transaction
• Nature, Status and Terms of the Listing Agreement
• Roles and Relationships of the Parties
• Initial Contact with the Purchaser
• Conduct of the Brokers
• Continuity and Breaks in Continuity (Abandonment
  Estrangement)
• Conduct of the Buyer
• Conduct of the Seller

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Sample Fact SituationAnalyses in the CEAM