Who Regulates Real Estate Professionals? Understanding the Roles of Real Estate Commissions and REALTOR® Associations
By: Velorine
If you’ve ever bought or sold a home, you’ve likely worked with a real estate agent. But when issues arise or questions about conduct or licensing come up many consumers are unsure who’s actually responsible for regulating these professionals. Is it the government? A real estate board? A REALTOR® association?
To clear up the confusion, the National Association of REALTORS® (NAR) and the Association of Real Estate License Law Officials (ARELLO) have partnered to help educate the public on the two main systems of oversight that govern real estate professionals: real estate commissions and REALTOR® associations. While they serve different purposes, both play vital roles in maintaining the integrity and trust of the real estate industry.
What is a Real Estate Commission?
A real estate commission is a government agency established in each U.S. state or jurisdiction to regulate the practice of real estate. Its main goal? To protect consumers by ensuring only qualified individuals are allowed to practice real estate and by enforcing relevant state laws.
Key Responsibilities of Real Estate Commissions Include:
- Issuing and renewing real estate licenses
- Setting education and continuing education requirements
- Investigating complaints about misconduct or illegal activity
- Auditing trust accounts used by licensees
- Enforcing licensing laws and taking disciplinary actions, including fines, license suspension, or revocation
If you believe a real estate professional has violated state licensing laws, your first step should be to contact your local real estate commission. They have the authority to investigate and take legal action when necessary.
What is a REALTOR® Association?
While all REALTORS® are licensed real estate professionals, not all licensed professionals are REALTORS®. The distinction? REALTORS voluntarily join their local REALTOR®association and commit to upholding the NAR Code of Ethics, which sets a higher standard of professionalism and conduct.
REALTOR® Associations Do the Following:
- Uphold and enforce the NAR Code of Ethics
- Conduct ethics hearings to address member conduct
- Impose disciplinary measures such as fines, mandatory education, or even membership suspension
- Promote professional development and continuing education
- Support ethical business practices within the real estate community
Important Note: A REALTOR® association does not regulate real estate licenses. If a member violates the Code of Ethics, the association can revoke their membership but not their license to practice. Licensing authority remains strictly with the real estate commission.
Who Should You Contact? A Quick Guide for Consumers
| Concern | Who to Contact |
| A real estate agent misrepresented a property | Real Estate Commission |
| You suspect someone is practicing real estate without a license | Real Estate Commission |
| A REALTOR® behaved unethically (e.g., misleading advertising, unfair treatment) | Local REALTOR® Association |
| You want to verify if someone is a licensed agent | Real Estate Commission |
| You want to confirm if someone is a REALTOR® | Local REALTOR® Association |
Holding Professionals Accountable
Real estate professionals are held to both legal and ethical standards. Real estate commissions enforce state licensing laws, while REALTOR® associations ensure their members meet the ethical standards set by the NAR Code of Ethics.
By understanding the difference, consumers can more effectively navigate any concerns that arise and ensure that the professionals they work with are held to the highest possible standards.
