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What is Broker Compliance?:​

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The California Association of REALTORS® (C.A.R.) holds local REALTOR® associations responsible for ensuring broker compliance with the National Association of REALTORS® (N.A.R.) Variable Dues Formula. The formula was created to ensure fairness by basing member dues on the number of individuals licensed with Designated REALTORS® (most often the Broker of a company). 
 

The premise is that every licensee in a firm benefits from the broker's membership in a REALTOR® Association, and the broker's dues payment should reflect all licensees in the firm—even those who are not REALTORS®.

 

How is compliance acheived? 

Brokers have a few options to be compliance with the Variable Dues Formula:

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• Pay a Nonmember Assessment: 
  The Designated REALTOR® (Broker), are billed a nonmember assessment of $488 for each individual who is a nonmember licensee. Even when this $488 is paid, the licensee is not a REALTOR® member and there are no association benefits or services provided. Use of the REALTOR® trademark is prohibited.

   

• Licensee Joins as a REALTOR®:  
  The licensee joins and pays REALTOR® dues and receives all the benefits of being a REALTOR®. With this option, you do not pay the $488 nonmember assessment.

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• Drop Agent from your Brokerage: 
   or submitting paper form RE214 to the DRE. You will not be charged the nonmember assessment for this licensee with proof that this change has been filed.eLicensingYou terminate the nonmember licensee by removing the licensee from CalBRE records. This can be done via 

   

• Exemption for Referral Agents:

  Licensees working for a separate entity owned by the Designated REALTOR® (Broker), which is exclusively engaged in referring clients, can be excluded from your dues calculation. Any licensees identified on the Limited Function Referral Office (LFRO) Certification Form are excluded from paying REALTOR® Dues and the Designated REALTOR® (Broker) is not responsible for paying the $488 non-member assessment.
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• Exemption for Mortgage Loan Originators: 

  Affiliated MLO licensees in your firm may be excluded from your dues calculation. You must provide a list of the affiliated MLO licensees and certify that all of the listed licensees: (1) have an MLO license or endorsement; (2) are not engaged in real estate licensed activities except those for which an MLO is required; and (3) are not participants or subscribers in any 'Multiple Listing Service (“MLS”)'.​
   

WRT Referral Agents/LFRO Certifcation:

You must submit the LFRO form when our records indicate that your office is an active real estate office, and LFROs are required to be in a separate entity or a registered Doing Business As (DBA).

For example, if the name on record for your office is “Smith Realty and Associates” and records indicate that this is an active real estate office, the LFRO agents can be in the “Smith Referral Network” instead of “Smith Realty and Associates.”  

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If you do not have a separate entity or DBA on file with the DRE, you need to do the paperwork necessary to create another entity and/or file a DBA as soon as possible.

• Registering a Fictitious Business Name in California

• Submitting a DBA to the DRE

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The LFRO and MLO certifications must be submitted to JTGAR every billing year. Brokers with certified LFROs that are found to be conducting real estate sales outside of referrals will be retroactively billed the full non-member assessment.  
 

What happens once a the Compliance Deadline passes? 

Full payment of dues owed is required for membership in a local Association of REALTORS®. Partial payment does not satisfy the dues obligation. If a Designated REALTOR® (Broker) refuses to pay their full dues under the Variable Dues Formula, they, along with their entire office, will have their local membership suspended—this is will also suspend C.A.R. and NAR membership.

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Because this process has been mandated by C.A.R., if you do not pay, your account will be active only until C.A.R. notifies the association to suspend your benefits—this will include access to zipForms®.

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