BARRISTER'S BRIEFING: Understanding the Grievance Process: How to File a Complaint and What Happens Next?

As the Professional Standards Administrator for HGAR, I often speak about the Code of Ethics (COE) and filing complaints. I thought I would use this month’s article to go over the process of filing a complaint and what happens.

Before You File

Before you file a complaint, we encourage you to reach out to the Realtor and/or the Realtor’s manager/broker to see if you can resolve the issue BEFORE filing a complaint. If both parties are willing to agree to meet to try to resolve this matter with a mediator/ombudsman, we can arrange that at no charge to either party. If you are unable to resolve your matter, you are still free to file a complaint.

The Complaint

First and foremost, all complaints and the hearing process are strictly confidential. Additionally, you cannot file a complaint anonymously.

Next, the COE identifies 17 Articles and each one is relatively short. Various Standards of Practice are under each Article and these are simply commonly identified acts that violate the Article. However, when filing a complaint, you should only cite the specific Article. You can reference the Standard of Practice elsewhere, but not in the complaint.

The complaint form is a one-page document. It must be completely filled out, identifying HGAR as the Association, the date, and the names of the parties. The Realtor filing the complaint is the “complainant.” The Realtor that you are filing the complaint against (i.e., the evil-doer) is the “respondent.” You then must identify the Article(s) that you believe the respondent violated. You must sign and date the form and provide your contact information. Most important, you must file your complaint within 180 days after you learn of the facts (or could have known of the facts with reasonable due diligence) or within 180 days after the conclusion of the transaction or event, whichever is later. Additionally, you must also identify whether there are any other actions/litigation that may be taking place related to the complaint.

In filling out the complaint, you are also agreeing to appear for a hearing if the matter is approved. Currently, those hearings are done virtually, but they may become in-person in the future. At these hearings, you are free to have legal counsel and/or Realtor counsel present, but it is not required.

The Narrative and Evidence

When you file a complaint, you are required to provide a typewritten explanation of what happened. It should be as detailed as possible and you can include any Standards of Practice that you think apply. You should also provide evidence. This may be emails, texts, documents, photos, affidavits, contracts, etc. You should provide as much support as you can, but you can always add more later. You can also identify witnesses who will come in and testify.

Review by the Grievance Committee

Once the complaint is received, it will be presented to the Grievance Committee (a neutral review board). They look at the timing of the complaint (180-day limit) and, for purposes of their review only, they will assume the facts to be true and compare them to the Article(s) identified to determine if there is an actionable complaint that can go forward to a Professional Standards Hearing Panel. If it goes forward, a hearing will be scheduled and the complaint will be sent to the respondent for their reply, narrative and a request for their supporting proof in opposition to the complaint. If the Grievance Committee determines that the complaint is not valid, then they will dismiss the complaint, and the process ends. However, a complainant may appeal this decision and they will be afforded an opportunity to explain why the complaint is valid.

If a respondent wishes to avoid a hearing, they can fill out a form which basically admits to the violation and the matter advances directly to a hearing on discipline. Additionally, in the very near future, HGAR will be implementing a Citation Policy, wherein respondents who violate certain common Articles/Standards of Practice may avoid a hearing and the respondent will be assessed a set fine, as determined by a Citation Panel (a neutral review board), so long as the respondent agrees to it; otherwise, a full hearing will be held.

The Hearing

Both parties will appear before the Professional Standards Hearing Panel (again, a neutral review board) along with any counsel and witnesses. The Hearing Panel will have already reviewed both the complaint, the response, and all the evidence provided up to that point. At the hearing, which is like a mini-trial, the complainant presents its case, along with any evidence, witnesses, etc. The complainant has the burden of proof in proving the claim. For an ethics hearing, the standard is “clear, strong and convincing” which is defined as enough proof that will produce a firm belief as to the allegations alleged.  At the end of the hearing, the parties will be dismissed and the Hearing Panel will go into Executive Session to deliberate and render a decision. If they determine there is no violation, then the decision will reflect that. If the respondent is found in violation of the Code of Ethics, then they will proceed to determine discipline.

Discipline

The Code of Ethics and Arbitration Manual is quite specific as to what can be handed down as discipline. Further, the discipline must be proportionate with the violation. Discipline can range from the lightest discipline, which is a letter of warning, and increase up to a letter of reprimand, then to requiring reeducation (i.e., ethics or agency classes), and may even include a fine (which can be from $1.00 up to $15,000). Discipline can even include membership suspension. Discipline can be a combination of these as well. For example, a letter of reprimand, two hours of ethics training, and a $500 fine might be in order for a respondent who knowingly violated the Code of Ethics.

Decision

Once the Hearing Panel renders a decision, the parties will be notified. Either party may appeal the decision. If there is no appeal, the decision is sent to the Board of Directors, with the names and any identifying information removed, and the Board will ratify the decision. However, if the Board of Directors believes the discipline was improper, they can reduce it (they cannot increase it) or they may send it back to the Hearing Panel with a recommendation and ask that it be reviewed again; however, the Hearing Panel does not have to accept the recommendation. If they believe that the hearing was procedurally deficient, they can refer the matter back for a new hearing. Last, if the Board of Directors determines that the findings of fact do not support a violation of the Code of Ethics, they can dismiss the matter. Once the Board of Directors ratifies the decision, it becomes effective and any discipline will be imposed.

Appeal

A respondent may file an appeal on the grounds that the Hearing Panel misapplied/misinterpreted the Code of Ethics, they were denied due process, or that the discipline was too severe. A complainant can only appeal if they believe that they did not receive a fair hearing (lack of due process). Anyone who wishes to appeal the decision must fill out a form and pay a filing fee. The appeal is then presented to a neutral panel of five Board of Director Members who are given the decision and all the materials presented at the earlier hearing. At the appeal, the Hearing Panel Chair will be present to provide his/her recitation of the facts and the reasoning that brought about the Hearing Panel’s determination. Then the person making the appeal (appellant) will make their argument. In most appeals, no new evidence can be submitted.

At the conclusion, the appeal panel will deliberate and decide to grant or deny the appeal. If the appeal is denied, the decision of the Hearing Panel stands and the matter will go to the Board of Directors for ratification. If the appeal is granted, and the issue was the severity of the discipline, then the appeal panel may reduce the discipline or send the decision back with a recommendation that the discipline be reduced (again, the Hearing Panel does not have to follow the recommendation). If the appeal is related to an unfair hearing, then the appeal panel will send the matter back for a new hearing with a new Hearing Panel. If it is determined that the findings of fact do not support the Hearing Panel’s decision, they can dismiss the matter.

Conclusion

All Realtors are required to comply with the Code of Ethics. Filing an ethics complaint is a very simple process and it provides confidentiality for all parties. Each party is given a fair opportunity to represent themselves before a neutral party and there are plenty of protections and “safety nets” to ensure expediency, fairness, completeness and closure. Discipline is fair and just.

If you wish to file a complaint or you have questions relating to filing a complaint, please reach out to HGAR for guidance.

For more information go to HGAR.com, Professional Standards at https://www.hgar.com/about-us/professional-standards.