Nearly all of the 800 members on the board attended the biannual meeting, held on the last day of the Realtors Legislative Meetings & Trade Expo.

WASHINGTON — The board of directors of the National Association of Realtors approved a slew of policies Saturday, including an increase in its operating reserves threshold and a change allowing agents to be charged different multiple listing service fees.

Nearly all of the 800 members on the board attended the biannual meeting, held on the last day of the Realtors Legislative Meetings & Trade Expo (colloquially known as NAR Midyear).

Some of the policies the directors voted on were:

Minimum and target reserves:

NAR’s Investment Policy was amended to raise its minimum operating reserves requirement to 50 percent of the association’s gross operating expenditure budget.

The reserves threshold has been 40 percent since 2008, when it was reduced from 50 percent because reserves were “much more robust” and dues were increasing, so the association thought it fair to provide more services back, NAR CFO John Pierpoint told conference attendees at a budget forum Thursday.

But last year, the trade group raised dues once again, in part because expenses for its for-profit subsidiary Realtors Property Resource (RPR) and for the zipLogix transaction management system it offers as a member benefit depleted its reserves by 45 percent.

NAR, which partially owned zipLogix, announced its sale last month. NAR leaders would not disclose the purchase price or how much NAR made from the sale at the budget forum due to confidentiality conditions as part of the transaction, but NAR Treasurer John Flor said, “From my perspective, it was a good deal and we got a fair price.”

Asked whether the trade group made any money, Flor said, “We did. I would consider it a good amount of money.” After a kerfuffle last year regarding the public offering of DocuSign, NAR CEO Bob Goldberg made sure to tell the forum attendees that “no staff [and] no members benefited from this [zipLogix sale] in our leadership.”

Goldberg also resisted an idea proposed by a Connecticut Realtor in November, that NAR ask its members to invest in NAR’s venture capital arm and subsidiary, Second Century Ventures (SCV). Goldberg noted that if the trade group asked its members to put money into something, that if that investment lost them money it would be a “big problem.”

“We’d have rampages. We’d have rooms five times this size,” he said. “We’ll keep looking at other opportunities.”

Because NAR got so close to its minimum level of reserves in recent years, the trade group’s Finance Committee felt it prudent to raise the threshold, according to Pierpoint, who also pointed out that many state and local associations had a 50 percent reserve level or higher.

For the first time, the committee recommended, and the NAR board approved, a target reserve level of 75 percent of the gross operating expenditure budget, which would not be required but “aspirational,” according to Flor.

“We’re in a world now where we have three class-action lawsuits against us where to me it’s prudent to have a higher target than just what our minimums are,” Flor said. (The board also allocated $1.7 million to fighting the suits.)

Having the target goal will also help when the association is tempted to spend down reserves, Flor added.

The board overwhelmingly approved the policy change with no discussion on the floor.

Member dues and assessment:

The board kept member dues at $150 per member in 2020 and renewed the $35 annual assessment for the consumer ad campaign for the three years between 2020 and 2022. The trade group plans to spend $46.9 million on the ad campaign, “That’s Who We R,” in 2020. NAR expects to have 1.34 million members in 2020, down from an estimated 1.36 million this year, and Lawrence Yun, NAR’s chief economist, predicts a further softening in membership to 1.32 million in 2021-2023.

Financial disclosures:

The NAR board amended the trade group’s Financial Information Disclosure Policy to “reflect the desire to allow more transparency into NAR’s financial operations,” the Finance Committee said in its report, distributed at the board of directors meeting.

Before the vote, Flor said at the budget forum that without the amendment, the disclosure policy was “very, very tight. Right now, if a dues-paying member asks to see our financials all they can see is what we give to the public,” he said.

The approved amendments permit “the Treasurer to share information more fully with the members of the Association and establishes protocol to handle questions and concerns as they arise,” the report said.

The board added a clause to the policy that says, “All other members of the Association not serving in these governance roles will receive periodic updates on key elements and metrics of NAR’s financial operations through appropriate communication channels from the Treasurer.”

The board also added a clause that says, “For any member desiring to see detailed audit, budget, or financial information, requests should be directed to NAR’s Treasurer, who, in his/her sole discretion with advice of the CFO and General Counsel, will arrange a mutually agreed upon time to meet at NAR’s offices, allowing for review (but not retention) of such information upon execution of a confidentiality agreement which shall include a stated purpose for use of the information.”

MLS fees:

The board passed an MLS policy change that would gives MLSs the option of charging subscribers that don’t hold primary or secondary membership in a Realtor association that owns the MLS a different amount than it charges to those that do.

The policy change requires that the charge be “reasonably related to the actual costs of serving those members.”

Although the proposal drew debate in committee, it passed overwhelmingly and with no discussion on Saturday.

Email Andrea V. Brambila.

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