The Arizona Association of REALTORS® (AAR) continues to receive questions regarding the difficult decision made by the National Association of REALTORS® to begin the process of revoking the charter of the Phoenix Association of REALTORS®. To try and answer these questions for the benefit of all, below are the most frequent questions AAR staff has received along with answers to those questions.

Q1. Why has the National Association of REALTORS® (NAR) initiated the charter-revocation process against the Phoenix Association of REALTORS® (PAR)?

A1. Outside legal counsel for NAR has opined that by offering MLS Choice, PAR is directly violating NAR’s Constitution and Bylaws, which PAR adopted as a Member Board of NAR. By doing so, PAR is in breach of its member agreement with NAR.

Q2. Can you please explain this in layman’s terms?

A2. Sure. Think of it this way. McDonald’s has franchises. While these franchises are independently owned and operated, they must abide by certain rules to become and remain a McDonald’s franchise. If a local McDonald’s were to begin selling Burger King Whoppers inside their restaurant, they would presumably be in violation of their franchise agreement and McDonald’s would have the right to order them to stop. McDonald’s is not saying that Burger King cannot exist, nor is it preventing consumers from going to Burger King. Rather, the agreement McDonald’s has with its franchisees simply says that you cannot sell Burger King Whoppers inside a local McDonald’s restaurant.  

NAR has determined that PAR’s MLS Choice membership option directly competes with REALTOR® membership in violation of its agreement with NAR. NAR is therefore enforcing its right to say that PAR cannot offer that membership option if PAR wants to remain a local REALTOR® association.

Q3. Will PAR lose its REALTOR® charter?

A3. NAR has demanded that PAR cease offering its MLS Choice membership option, or it will revoke its charter. PAR has responded by stating, “We want to make one thing clear: We are not abandoning MLS Choice.” Unless PAR changes its position, NAR intends to proceed with revocation.

Q4. Can I join a different local REALTOR® association now to ensure that I am not impacted by PAR’s potential loss of its charter?

A4. Yes. There are 13 other local REALTOR® associations in Arizona, each of which continues to comply with NAR’s Constitution and Bylaws and focus on serving REALTORS®. Two of those local associations operate within the Phoenix metropolitan area. A list of other local REALTOR® associations in Arizona with their contact information can be found on our Local Associations of REALTORS® page.

Q5. Why were these issues not resolved prior to PAR’s rollout of its MLS Choice membership option?

A5. PAR did not discuss or consult with NAR, or even AAR, prior to unveiling MLS Choice. In fact, neither NAR nor AAR had any advance knowledge of this new membership offering. It appears MLS Choice was developed in secret by a small number of PAR members and publicly announced without a membership wide vote.

Q6. Will a hearing take place before a decision is made to revoke PAR’s charter?

A6. PAR is entitled to a “show cause” hearing before a panel of 7-9 members of the NAR Executive Committee. If the hearing panel decides to revoke PAR’s charter, its recommendation would be forwarded to the full Executive Committee to make the final decision on behalf of the NAR Board of Directors.

Q7. Is the Arizona Association of REALTORS® involved in this dispute?

A7. The Arizona Association of REALTORS® firmly supports the three-way agreement, but it is not a party to this dispute. For those unfamiliar with the three-way agreement, it ensures that all members of local REALTOR® associations are also members of the state and national association, creating a unified and consistent membership structure across all levels of the organization. Stated differently, the Agreement establishes a cohesive structure that enables REALTORS® to speak with one strong, collective voice on industry matters, ensuring that policies, standards, and advocacy efforts are aligned across local, state, and national levels.

PAR explicitly agreed to this three-tier federation when seeking its charter and one of its explicit purposes as stated in its Articles of Incorporation is “To unite those engaged in the real estate profession in this community with the Arizona Association of REALTORS® and the National Association of REALTORS®, thereby furthering their own objectives throughout the state and nation, and obtaining the benefits and privileges of membership therein.”

Q8. Is it permissible for a trade association to exclusively offer benefits and services only to its members?

A8. Of course. In fact, it is common for trade associations to provide a variety of services, resources, and benefits to their members that are not available to non-members. In Arizona, not all real estate licensees are REALTORS®, and no real estate licensee is required to be a REALTOR®. However, if a real estate licensee desires to take advantage of REALTOR® benefits, they must choose to join the three-tier federation of REALTOR® associations. But to be clear, NAR does not require real estate licensees to be members of a REALTOR® association to access an MLS and those licensees are free to seek professional services from non-REALTOR® associations.