The National Association of Realtors (NAR) has created a new set of standards for its local Realtor boards, pressuring them to shape up – or ship out, with those who cannot meet the new minimums at risk of losing their charter or being forced to merge with larger organizations.

At its annual mid-year meeting this month, NAR’s directors approved the recommendations of a special “Presidential Advisory Group” to redefine the “minimum core standards” for each individual board. The 21 new rules cover issues such as enforcing code of ethics violations, providing legal counsel to members, improved financial reporting practices and engaging in public advocacy on behalf of the industry. In addition to approving the new standards, NAR’s board of directors voted to contribute $20 million to the effort of helping local boards either transition or consolidate.

The heads of some local boards appear resigned to the changes. “It’s been a while coming, and it was very much supported at the national meeting,” said Nancy Betz, CEO of the Plymouth and South Shore Association of Realtors (PASS).

NAR has called the new rules essential for the group to “survive as the strongest and most politically influential entity for organized real estate.” In recent years, the organization that bills itself as the “voice for real estate” has encountered some stiff competition for its title.

Not only have rival portals Zillow and Trulia overtaken Realtor.com (which is operated by Move Inc. under license from NAR) as the go-to portals for consumers searching for real estate online, the web companies are also making waves in Washington. Zillow in particular has had success attracting big name politicians to its events, co-hosting forums with influential D.C. lobbying groups like the Bipartisan Policy Center and the National Urban League and scoring a coup when President Barack Obama sat down for a town-hall interview with Zillow CEO Spencer Rascoff last August.

Moreover, the Supreme Court’s 2010 Citizens United decision, which removed caps on campaign spending for corporations and trade groups, upped the ante for trade groups like NAR, which must now spend more money lobbying to compete for candidate’s attention.

The Realtor PAC

In response, NAR has moved to encourage its members to become more politically involved – and in particular, to contribute to its lobbying arm, the REALTOR Party. NAR passed a widely unpopular dues increase in 2012 explicitly to raise funds for the REALTOR Party’s lobbying activities. That political focus has continued at many levels, with the group going so far as to rename its annual mid-year meetings, held in Washington last month, as the “REALTOR Party Convention & Trade Expo.”

Now the group is asking local boards to prove they’re able to contribute to the group’s public relations and political endeavors – or risk losing their charter. Among the new standards are requirements that each board shall contribute a “voluntary fair share” of dues to either a state or national real estate centric political action committee, as well as requiring members to participate in NAR’s “Calls to Action” by contacting their political representatives to advocate for Realtor-friendly policies. The boards are also supposed to help raise Realtors’ profile with consumers, through engaging in at least four outreach methods annually, such as sending press releases on local real estate stats, sponsoring community events or participating in charity drives that enhance Realtors’ image.

That could be strain for many local boards. There are 15 local boards in Massachusetts. One, the Greater Boston Real Estate Board (GBREB), covers 54 cities and towns closest to Boston, collects more than $7 million in dues revenue and has a staff as large as the Massachusetts’ Association of Realtors’ own. But most of the rest have just a handful of staff, often part-time, and dedicated largely to administrative and professional education tasks.

“I do not believe that anybody else has a government affairs component to their board, other than us. Nobody else has a presence at the statehouse. For us, it’s literally up the street, but for the other boards it’d be hard,” said Greg Vasil, CEO of GBREB.

Hiring additional staff to coordinate these new responsibilities could prove difficult. Just last year, the Tri-County Board of Realtors voted to dissolve itself after struggling to deal with dwindling membership. (Three of the remaining boards, PASS, the North Bristol County Association of Realtors and Greater Fall River Association of Realtors, are currently negotiating with each other and NAR how to best divvy up their former territory.)

The most recent public filings show that five of the 15 local boards were operating at a loss in 2012, with the real estate recovery already in full swing.

Heads of local boards are meeting this week to discuss how to best approach the new rules. “If there’s some that need some help, maybe some of the larger ones could help the smaller ones in some way,” said Betz.

While it would be possible for the larger boards to consolidate with some of the smaller ones, she said, “I don’t think that we have to. If they’re not already [meeting the standards] I’m sure they’ll be working toward that." 

Email: csullivan@thewarrengroup.com