Leadership Resources Workbook by Bakersfield Association of REALTORS®

Be more... Leadership LE A D E RSH I P RE S OU R CE S

RESOURCES

JOHN 3:16 BAK E RS F I ELD

AS S O C I AT I ON

BAKERSFIELD ASSOCIATION OF REALTORS®

O F

R E A LTOR S

1 JOHN 3:16

BAKERSFIELD ASSOCIATION OF REALTORSÂ®

LE A D E RSH I P RE S OU R CE S

TABLE OF CONTENTS Organizational Structure 2019 Leadership Team.................................................................................... 5 Officers and Directors Contact Information..................................................... 6 REALTOR® Organizational Connections........................................................... 7 Association Organization Chart ....................................................................... 8 Association Governance Flowchart.................................................................. 9

Bakersfield Association of REALTORS® Governing Documents Realtor® Code of Ethics .................................................................................... 11 NAR Core Standards......................................................................................... 25

Bakersfield Association of REALTORS® Bylaws........................................... 31

“ We are

entrusted with power and

responsible to use that power

Bakersfield Association of REALTORS® Policies.......................................... 51

to encourage,

Bakersfield Association of REALTORS® Citation Policy............................... 55

uplift and lead.”

Bakersfield Association of REALTORS® Strategic Plan............................... 57

– Craig Groeschel:

Bakersfield Association of REALTORS Committee Descriptions............. 63 ®

GEMLS Governance GEMLS Bylaws................................................................................................. 67 GEMLS Rules & Regulations.......................................................................... 85 GEMLS Policies................................................................................................ 119 GEMLS Citation Policy..................................................................................... 123 Resources......................................................................................................... 127 Board Responsibilities & Policy Guidelines................................................. 129 Local, State & National Governance Meetings........................................... 151 Communications Schedule............................................................................ 153

BAKERSFIELD ASSOCIATION OF REALTORS®

LE A D E RSH I P RE S OU R CE S

BAKERSFIELD ASSOCIATION OF REALTORSÂ®

2019 OFFICERS AND DIRECTORS

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ATHENA COLLUP 2019 President

DEREK SPRAGUE

Immediate Past President

MARTHA JOHNSON 2019 - 2021 Director

RONDA NEWPORT

SCOTT KNOEB

WAYLAND LOUIE

2019 President -Elect

2019 Vice President

2019 Secretary / Treasurer

ANNA ALBIAR

WILLIAM CHICAS

MICHELE COOPER

2017 - 2019 Director

BILL MELL

KYM PLIVELICH

2019 - 2021 Director

2019 - 2020 Director

2019 - 2021 Director

GLENN PORTER

2018 - 2020 Director

2019 GEMLS BOARD OF DIRECTORS

BRIAN TUTTLE

2018 - 2020 Director

LINDA JAY

Chief Executive Officer

Officers John Houchin (2019) n Ronda Newport (2019-2021) Martha Johnson (2018-2020) 2019 President Scott Knoeb (2019-2021) Linda Jay Wayland Louie (2011-2019) 2019 CFO Nick Megazzi (2019) n Directors Bill Mell (2017-2019) Terri Collins (2018-2020) Derek Sprague (2016-2019) Athena Collup (2019) n Open Seat (2019-2021) Greg Holland (2018-2020) n

Represents Large Brokerage

Â® LEADERSHIP SUMMIT BAKERSFIELD ASSOCIATION OF REALTORS

LE A D E RSH I P RE S OU R CE S

INFORMATION 2019 Officers and Directors 2019 PRESIDENT

2019 DIRECTORS

PRESIDENT ELECT

William Chicas Watson Realty ERA 9101 Camino Media Bakersfield CA, 93311 wchicas@watsonrealty.com (o) 661.327.5161 (f) 661.617.3705 (c) 661.912.5778

Athena Collup Miramar International, Mill Rock 1518 Mill Rock Ave. Bakersfield CA, 93311 athena@athenacollup.com (o) 661.735.8600 (f) 661.735.8601 (c) 661.747.6300

Anna Albiar Coldwell Banker Preferred, CO 3820 Coffee Road, #1 Bakersfield CA, 93308 albiar@cbbakersfield.com (o) 661.616.3600 (f) 661.616.3603 (c) 661.900.0311

Ronda Newport Watson Realty ERA 9101 Camino Media Bakersfield, CA 93311 rondanewport@gmail.com (o) 661.327.5161 (f) 661.617.3705 (c) 661.333.2901

Michele Cooper Karpe Real Estate Center 8501 Camino Media, #400 Bakersfield, CA 93311 mcooper@sjvalleymortgage.com (o) 661.847.4800 (f) 661.587.3952 (c) 661.900.2358

VICE PRESIDENT

Scott Knoeb Frontier Real Estate Services, Inc. 18912 Clarisse St. Bakersfield CA, 93314 scottknoeb@gmail.com (o) 661.588.3283 (f) 661.588.2375 (c) 661.205.4394

Martha Johnson Keller Williams Realty 5601 Truxtun Ave Suite 150 Bakersfield, CA 93309 martha@marthajohnson.net (o) 661.617.6500 (f) 661.617.6555 (c) 661.342.2260

SECRETARY/ TREASURER

Wayland Louie RE/MAX Golden Empire 3955 Coffee Road Bakersfield, CA 93308 wayland@kernrebroker.com (o) 661.615.1500 (f) 661.615.1501 (c) 661.565.5678

Bill Mell Miramar International, CO 3512 Coffee Road Suite A Bakersfield, CA 93308 billmell@att.net (o) 661.588.1989 (c) 661.301.8569

IMMEDIATE PAST PRESIDENT

Derek Sprague Mossy Oak Properties 3400 Unicorn Road, Ste. 109 Bakersfield, CA 93308 dsprague@ mossyoakproperties.com (o) 661.234.9555 (f) 661.835.0243 (c) 661.301.4871 BAKERSFIELD ASSOCIATION OF REALTORS

Kym Plivelich Marcom Real Estate 1100 Mohawk #170 Bakersfield, CA 93309 kym@plivelich.com (o) 661.489.4444 (f) 661.447.4589 (c) 661.319.6978 ®

Glenn Porter RE/MAX Golden Empire 3955 Coffee Road Bakersfield, CA 93308 glenneporter@gmail.com (o) 661.615.1500 (f) 661.615.1531 (c) 661.205.7355 Brain Tuttle Coldwell Banker Preferred, CO 3820 Coffee Road, #1 Bakersfield, CA 93308 btuttle@cbbakersfield.com (o) 661.616.3600 (f) 661.616.3603 (c) 661.979.0769

CHIEF EXECUTIVE OFFICER

Linda Jay Bakersfield Association of REALTORS® 2300 Bahamas Dr. Bakersfield, CA 93308 linda@bakersfieldrealtor.org (o) 661.635.2304 (f) 661.635.2303 (c) 661.917.2582

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REGION

NAR

ORGANIZATIONAL CONNECTIONS

BAR

REGION

CAR

California, Hawaii & Guam

BAKERSFIELD ASSOCIATION OF REALTORSÂ®

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ORGANIZATION CHART Association Board of Directors

CEO

Committees

GE/MLS Board of Directors

Attorney

CPA

BARCF/BOD 501(c)(3)

LINDA JAY

Chief Executive Officer

Ginger Edwards Controller Office Administrator

Cindy Kiser

Manager of Education and Professional Development

Jamey Lyster

Manager of Information Technology (IT) MLS Services

Linda Marie Curutchague

Member Services Manager

Marrisa Williams Member Services Specialist

BAKERSFIELD ASSOCIATION OF REALTORSÂ®

Claudia Bugarin

Professional Standards Administrator

Meghan Cooper

Member Services Specialist and Bookkeeping Assistant

Carol Duran

Communications Design & Development

Kim Schaefer Government Affairs Director

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CORPORATIONS

practices are being established

as well as the establishment and

Bakersfield Association of

and implemented.

consistent implementation of

REALTORS (BAK) - 501c6 – Not

n Ensuring

sound governance practices.

for Profit Corporation Golden

advisory groups, and working

Empire Multiple Listing Service,

groups are executing the goals

Inc.- (GEMLS) – “C” Corporation

and objectives set forth in the

Bakersfield Association of

Association’s Strategic Plan;

REALTORS® Charitable Foundation

n Maintaining

(BARCF) – 501c3-Non-Profit

NAR’s Core Standards

MEMBERSHIP

BOARD OF DIRECTORS

and federal laws, governing

Our members are the heart and

Provides governance to ensure

documents and budget. Works

soul of our Association. They

accountability and advancement

in partnership with committees

are the reason we exist. We are

of the Vision, Purpose and

as a resource and support in

committed to providing them with

Values of the Organization. This

advancing the Strategic Plan

the highest level of customer

is accomplished through setting

to add value to and protect

service possible.

a strategic course for the future,

the organization.

all committees,

STAFF Faithfully supports the goals, programs and operations set forth by the Board of Directors.

compliance with

Ensures things are done right, in compliance with local, state

COMMITTEES Members who volunteer their

COMMITTEES

time and talents in service to their colleagues and community. They are the boots on the

STAFF

ground, who make recommendations to SPF of programs, products and

Faithfully supports the goals, programs and operations set forth by the Board of Directors.

Members who volunteer their time. They make recommendations to SPF programs.

MEMBER Flow chart ENGAGEMENT Input and feedback from various member groups

services to enhance the efficiency and profitability of their fellow professionals. STRATEGIC PLANNING AND FINANCE

BAK, GEMLS & BARCF

BOARD OF DIRECTORS

Provides governance to ensure accountability and advancement of our vision

MEMBERSHIP Our members are the heart and soul of our Association. They are the reason we exist. We are committed to providing them with the highest level of customer service possible.

SPF

STRATEGIC PLANNING & FINANCE The overseer of the Association’s Strategic Plan.

COMMITTEE (SPF) n The

overseer

of the Association’s Strategic Plan. Their fiduciary role includes: n Vetting

SPF COMPLIANCE

all financial

considerations of BAK, GEMLS, and BARCF to ensure fiscally sound budgeting and investing

Maintaining compliance with NAR’s Core Standards

SPF EXECUTION

SPF VETTING

Vetting all financial considerations of BAK, GEMLS, and BARCF

Ensuring all committees, advisory groups, and working groups are executing the goals in the Strategic Plan BAKERSFIELD ASSOCIATION OF REALTORS®

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NOTES

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CODE OF ETHICS 1908 – NAREE (now NAR) is formed – The Bylaws provide for the formation of a committee on the Code of Ethics.

1910 – DUAL DUTIES RECOGNIZED – Broker duties o clients and Broker duties to fellow Brokers. 1912 – THE GOLDEN RULE – Convention report stated “We cannot suggest a better starting point than the Golden Rule. 1913 – COE IS SUBMITTED TO CONVENTION – This was the first

attempt at a national Code of Ethics with 23 articles.

1974 – COE COMPLETELY REVISED – Articles were rearranged or reworded, and others were combined. Article 10 was added.

1916 – THE TERM “REALTOR®” IS INTRODUCED – The term distinguished members from non-members. 1923 – LOCAL BOARDS REQUIRED TO ENFORCE THE CODE – National Association put a system in place to enforce the Code. 1955 – COE REVISIONS STRESS DUTIES TO CLIENTS – Articles were renumbered and renamed to follow the original 1913 Code.

1975 – STANDARDS OF PRACTICE ADDED – Twenty-one (21) SOPs were added to provide general principles to guide the REALTOR®. 1994 – COE REVISED – Articles reduced from 23 to 17; some articles moved to the Preamble; Code has been amended over 40 times.

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Why the Code exists…. nA

primary reason for NAR’s formation of the Code of Ethics was for the establishment of ethical standards. n There were no license laws or regulations for real estate professionals when the COE was formulated. n Buyers and Sellers had to be cautious of unethical and selfserving real estate dealers. n NAR’s founders believed that brokers must be organized and regulated and hold its NAR members to high standards. n Many of the original articles remain essentially unchanged today (e.g., cooperation and arbitration).

Structure of the Code of Ethics n PREAMBLE

is aspirational for REALTORS to achieve. n THREE DIVISIONS OF THE CODE are: 1) Duties to clients and customers; 2) Duties to the public; and, 3) Duties to other REALTORS®. n THERE ARE 17 ARTICLES that are statements of ethical principles enforceable at the local board of REALTORS®. n STANDARDS OF PRACTICE follow each article which support, interpret, and amplify each Article. 2013 – COE CENTENNIAL – That year marked 100 years since the national Code of Ethics was first adopted. Where the word REALTOR® is used in this Code and preamble, it shall be deemed to include REALTOR-ASSOCIATES®. While the Code of Ethics establishes obligations that may ®

BAKERSFIELD ASSOCIATION OF REALTORS®

be higher than those mandated by law, in any instance where the Code of Ethics and the law conflict, the obligations of the law must take precedence.

Preamble Under all the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilizations, REALTORS® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment. Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and patriotic duty to which REALTORS® should dedicate themselves, and for which they should be diligent in preparing themselves. REALTORS®, therefore, are zealous to maintain and improve the standards of their calling and share with their fellow REALTORS® a common responsibility for its integrity and honor. In recognition and appreciation of their obligations to clients, customers, and the public, and each other, REALTORS® continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share the fruit of their experiences and study with others. They identify and take

steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession. REALTORS® having direct personal knowledge of conduct that may violate the Code of Ethics involving misappropriation of client or customer funds or property, willful discrimination, or fraud resulting in substantial economic har, bring such matters to the attention of the appropriate Board of REALTOR®. (Amended 1/00) Realizing that cooperation with other real estate professionals promotes the best interest of those who utilize their services, REALTORS® urge exclusive representation of clients; do not attempt to gain any unfair advantage over their competitors; and they refrain from making unsolicited comments about other practitioners. In instances where their opinion is sought, or where REALTORS® believe that comment is necessary, their opinion is offered in an objective, professional manner, uninfluenced by any personal motivation or potential advantage or gain. The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal. In the interpretation of this obligation, REALTORS® can take no safer guide than that which has been handed down through the

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centuries, embodied in the Golden Rule, “Whatsoever ye would that other should do to you, do ye even so to them.” Accepting this standard as their own, REALTORS® pledge to observe its spirit in all of their activities whether conducted personal, through associates or others, or via technological means, and to conduct their business in accordance with the tenets set forth below.

Duties to Clients and Customers ARTICLE 1 When representing a buyer, seller, landlord, tenant, or other client as an agent. REALTORS® pledge themselves to protect and promote the interest of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a nonagency capacity, REALTORS® remain obligated to treat all parties honestly. (Amended 1/01) SOP 1-1: REALTORS®, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics. (Amended 1/93) SOP 1-2: The duties imposed by the code of Ethics encompass all real estate-related activities and transactions whether conducted in person, electronically, or through any other means. The duties the Code of Ethics imposes are applicable whether REALTORS® are acting as agents or in legally recognized non-agency capacities except that any duty

imposed exclusively on agents by law or regulation shall not be imposed by this Code of Ethics on REALTORS® acting in non-agency capacities. As used in this Code of Ethics, “client” means the person(s) or entity(ies) with whom a REALTORS® or a REALTOR®’S firm has an agency or legally recognized non-agency relationship; “customer” means a party to a real estate transaction who receives information, services, or benefits but has no contractual relationship with the REALTOR® or the REALTOR®’S firm; “prospect” means a purchaser, seller, tenant, or landlord who is not subject to a representation relationship with the REALTOR® or REALTOR®’S firm; “agent” means a real estate licensee (including brokers and sales associates) acting in an agency relationship as defined by state law or regulation; and “broker” means a real estate licensee (including brokers and sales associates) acting as an agent or in a legally recognized non-agency capacity. (Adopted 1/95, Amended 1/07) SOP 1-3: REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value. SOP 1-4: REALTORS®, when seeking to become a buyer/tenant representative, shall not mislead buyers or tenants as to savings or other benefits that might be realized through use of the REALTOR®’S services. (Amended 1/93) SOP 1-5: REALTORS® may represent the seller/landlord and buyer/tenant in the same

transaction only after full disclosure to and with informed consent of both parties. (Adopted 1/93) SOP 1-6: REALTORS® shall submit offers and counter-offers objectively and as quickly as possible. (Adopted 1/93, Amended 1/95) SOP 1-7: When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter -offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. REALTORS® shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord. REALTORS® shall recommend that sellers/ landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except when the acceptance is contingent on the termination of the preexisting purchase contract or leas. (Amended 1/93) SOP 1-8: REALTORS®, acting as agents or brokers of buyers/ tenants, shall submit to buyers/ tenants all offers and counteroffers until acceptance but have no obligation to continue to show properties to their clients after an offer has been accepted unless otherwise agreed in writing. REALTORS®, acting as agents or brokers of buyers/tenants, shall recommend that buyers/tenants obtain the advice of legal counsel if there is a question as to whether a pre-existing contract has been terminated. (Adopted 1/93, Amended 1/99) SOP 1-9: The obligation of REALTORS® to preserve BAKERSFIELD ASSOCIATION OF REALTORS®

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confidential information (as defined by state law provided by their clients in the course of an agency relationship or non-agency relationship recognized by law continues after termination of agency relationships or any nonagency relationships recognized by law. REALTORS® shall not knowingly, during or following the termination of professional relationships with their clients: 1). Reveal confidential information of clients; or 2). Use confidential information of clients to the disadvantage of clients; or 3). Use confidential information of clients for the REALTORS® advantage or the advantage of third parties unless: a). clients consent after full disclosure; or b). REALTORS® are required by court order; or c). it is the intention of a client to commit a crime and the information is necessary to prevent the crime, or d). it is necessary to defend a REALTOR® or REALTORS® employee or associates against an accusation of wrongful conduct. Information concerning latent material defects is not considered confidential information under this Code of Ethics. (Adopted 1/93, Amended 1/01) SOP 1-10: REALTORS® shall, consistent with the terms and conditions of their real estate licensure and their property management agreement, competently manage the property of clients with due regard for the rights, safety and health of tenants and others lawfully on

BAKERSFIELD ASSOCIATION OF REALTORS®

the premises. (Adopted 1/95, Amended 1/00) SOP 1-11: REALTORS® who are employed to maintain or manage a client’s property shall exercise due diligence and make reasonable efforts to protect it against reasonably foreseeable contingencies and losses. (Adopted 1/95) SOP 1-12: When entering into listing contract, REALTORS® must advise sellers/landlords of: 1). The REALTOR®’S company policies regarding cooperation and the amount(s) of any compensation that will be offered to subagents, buyer/tenant agents, and/or brokers acting in legally recognized non-agency capacities; 2). The fact that buyer/tenant agents or brokers, even if compensated by listing brokers, or by sellers/landlords may represent the interest of buyers/tenants; and 3). Any potential for listing brokers to act as disclosed dual agents, e.g., buyer/tenant agents. (Adopted 1/93, Renumbered 1/98, Amended 1/03) SOP 1-13: When entering into buyer/tenant agreements, REALTORS® must advise potential clients of: 1). the REALTOR®’S company policies regarding cooperation; 2). the amount of compensation to be paid by the client; 3). The potential for additional or offsetting compensations; from other brokers, from the seller or landlord, or from other parties; 4). Any potential for the buyer/ tenant representative to act as a disclosed dual agent, e.g., listing broker, subagent, landlord’s agent, etc.; and

5). The possibility that sellers or sellers’ representative may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties. (Adopted 1/93, Renumbered 1/98, Amended 1/06) SOP 1-14: Fees for preparing appraisals or other valuations shall not be contingent upon the amount of the appraisal or valuation (Adopted 1/02) SOP 1-15: REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose, if asked, whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker (Adopted 1/03, Amended 1/09). SOP 1-16: REALTORS® shall not access or use, or permit or enable others to access or use, listed or managed property on terms or conditions other than those authorized by the owner or seller. (Adopted 1/12)

ARTICLE 2 REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships

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as defined by state law. (Amended 1/00) SOP 2-1: REALTORS® shall only be obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority. Article 2 does not impose upon the REALTOR® the obligation of expertise in other professional or technical disciplines (Amended 1/96) SOP 2-2: (Renumbered as Standard of Practice 1-12 1/98) SOP 2-3: (Renumbered as Standard of Practice 1-13 1/98) SOP 2-4: REALTORS® shall not be parties to the naming of a false consideration in any document, unless it be the naming of an obviously normal consideration. SOP 2-5: Factors defined as “nonmaterial” by law or regulation or which are expressly referenced in law or regulation as not being subject to disclosure are considered not “pertinent” for purposes of Article 2. (Adopted 1/93)

ARTICLE 3 REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker. (Amended 1/95) SOP 3-1: REALTORS® acting as exclusive agents or brokers of sellers/landlords, establish the terms and conditions of offers to cooperate. Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer

of cooperation includes an offer of compensation. Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning efforts to accept the offer of cooperation. (Amended 1/99) SOP 3-2: Any change in compensation offered for cooperative services must be communicated to the other REALTOR® prior to the time that REALTOR® submits an offer to purchase/lease the property. After a REALTOR® has submitted an offer to purchase or lease property, the listing broker may not attempt to unilaterally modify the offered compensation with respect to that cooperative transaction. (Amended 1/14) SOP 3-3: Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation (Adopted 1/94) SOP 3-4: REALTORS®, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements (i.e., listings were one amount of commission is payable if the listing broker’s firm is the procuring cause of sales/ lease and a different amount of commission is payable to the sale/lease results through the efforts of the seller/landlord or a cooperating broker) . The listing broker shall, as soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in

a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their client before the client makes an offer to purchase or lease. (Amended 1/02) SOP 3-5: It is the obligation of subagents to promptly disclose all pertinent facts to the principal’s agent prior to as well as after a purchase or lease agreement is executed. (Amended 1/93) SOP 3-6: REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeing cooperation. (Adopted 5/86, Amended 1/04) SOP 3-7: When seeking information from another REALTOR® concerning the property under a management or listing agreement, REALTORS® shall disclose their REALTOR® status and whether their interest is personal or on behalf of a client and, if on behalf of a client, their relationship with the client. (Amended 1/11) SOP 3-8: REALTORS® shall not misrepresent the availability of access to show or inspect a listed property. (Amended 11/87) SOP 3-9: REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker. (Amended 1/10) SOP 3-10: The duty to cooperate established in Article 3 relates to the obligation to share information on listed property, and to make property available to other brokers for showing to prospective BAKERSFIELD ASSOCIATION OF REALTORS®

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purchasers/tenants when it is in the best interest of sellers/ landlords. (Adopted 1/11)

ARTICLE 4 REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner of the owner’s agent or broker. In selling property they own, or in which they have an interest, REALTORS® shall revel their ownership or interest in writing to the purchaser or the purchaser’s representative (Amended 1/00) SOP 4-1: For the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract. (Adopted 2/86)

ARTICLE 5 REALTORS® shall not undertake to provide professional services concerning a property of its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.

ARTICLE 6 REALTORS shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent. When recommending real estate products or services (e.g. homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.) REALTORS® shall disclose to the client or customer ®

BAKERSFIELD ASSOCIATION OF REALTORS®

to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR®S firm may receive as a direct result of such recommendations (Amended 1/99) SOP 6-1: REALTORS® shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion. (Amended 5/88)

ARTICLE 7 In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR® client or clients. (Amended 1/93)

ARTICLE 8 REALTORS® shall keep in a special account in an appropriate financial institution, separated from their own funds, monies coming into their possession in trust for other persons, such as escrows, trust funds, clients’ monies, and other like items.

ARTICLE 9 REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contract, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A

copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing. (Amended 1/04) SOP 9-1: For the protection of all parties, REALTORS® shall use reasonable care to ensure that documents pertaining to the purchase, sale, or lease of real estate are kept current through the use of written extensions of amendments. (Amended 1/93) SOP 9-2 When assisting or enabling a client or customer in establishing a contractual relationship (e.g., listing and representation agreements, purchase agreements, leases, etc.) electronically, REALTORS® shall make reasonable efforts to explain the nature and disclose the specific terms of the of the contractual relationship being established prior to it being agreed to by a contracting party. (Adopted 1/07)

Duties to the Public ARTICLE 10 REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. (Amended 1/14) REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex handicap, familial status, national origin, sexual orientation, or gender identity. Amended 1/14) SOP 10-1: When involved in the sale or lease of a residence, REALTORS® shall not volunteer

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information regarding the racial, religious or ethnic composition of any neighborhood nor shall they engage in any activity which may result in panic selling, however, REALTORS® may provide other demographic information. (Adopted 1/94, Amended 1/06) SOP 10-2: When not involved in the sale of lease of a residence, REALTORS® may provide demographic information related to a property, transaction or professional assignment to a party if such demographic information is (a) deemed by the REALTOR® to be needed to assist with or complete, in a manner consistent with Article 10, a real estate transaction or professional assignment and (b) is obtained or derived from a recognized, reliable, independent, and impartial source. The source of such information and any additions, deletions, modifications, interpretations, or other changes shall be disclosed in reasonable detail. (Adopted 1/05, Amended 1/06) SOP 10-3: REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. (Adopted 1/94, Renumbered 1/05, Amended 1/14) SOP 10-4: As used in Article 10 “real estate employment practices” relates to employees and independent contractors providing real estate-related services and

the administrative and clerical staff directly supporting those individuals. (Adopted 1/00, Renumbered 1/05 and 1/06)

ARTICLE 11 The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate. REALTORS® shall not undertake to provide specialized professional services concerning a type of property or services that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contributions to the assignment should be set forth. (Amended 1/10). SOP 11-1: When REALTORS® prepare opinions of real property value or price they must: 1). Be knowledgeable about the type of property being valued, 2). Have access to the information and resources necessary to formulate an accurate opinion, and 3). Be familiar with the area where the subject property is located Unless lack of any of these is

disclosed to the party requesting the opinion in advance. When an opinion of value or price is prepared other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, the opinion shall include the following unless the party requesting the opinion requires a specific type of report or different date set: 1) identification of the subject property 2) data prepared 3) defined value or price 4). Limiting conditions, including statements of purpose(s) and intended user (s) 5). Any present or contemplated interest, including the possibility of representing the seller/landlord or buyer/tenants 6). Basis for the opinion, including applicable market date 7). If the opinion is not an appraisal, a statement to that effect 8). Disclosure of whether and when a physical inspection of the property’s exterior was conducted 9). Disclosure of whether and when a physical inspection of the property’s interior was conducted 10). Disclosure of whether the REALTOR® has any conflicts of interest SOP 11-2: The obligations of the Code of Ethics is respect of real estate disciplines other than appraisal shall be interpreted and applied in accordance with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests considering the complexity of the transaction, the availability of BAKERSFIELD ASSOCIATION OF REALTORS®

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expert assistance, and, where the REALTOR® is an agent or subagent, the obligations of a fiduciary. SOP 11-3: When REALTORS® provide consultative services to clients which involve advice or counsel for a fee (not a commission), such advice shall be rendered in an objective manner and the fee shall not be contingent on the substance of the advice or counsel given. If brokerage or transaction services are to be provided in addition to consultative services, a separate compensation may be paid with prior agreement between the client and REALTOR®. (Adopted 1/96) SOP 11-4: The competency required by Article 11 relates to services contracted for between REALTORS® and their clients or customers; the duties expressly imposed by the Code of Ethics; and the duties imposed by law or regulation. (Adopted 1/02)

ARTICLE 12 REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional (Amended 1/08) SOP 12-1: REALTORS® may use the term “free and similar terms in their advertising and in other

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representations provided that all terms governing availability of the offered product or services are clearly disclose at the same time. (Amended 1/07) SOP 12-2: REALTORS® may represent their services as “free” or without cost even if they expect to receive compensation from a source other than their client provided that the potential for the REALTOR® to obtain a benefit from a third party is clearly disclosed at the same time. (Amended 1/07) SOP 12-3: The offering of premiums, prizes, merchandise discounts or other inducements to list, sell, purchase, or lease is not, in itself, unethical event if receipt of the benefit is contingent on listing, selling, purchasing, or leasing through the REALTOR® making the offer. However, REALTORS® must exercise care and candor in any such advertising or other public or private representations so that any party interested in receiving or otherwise benefiting from the REALTORS® offer will have clear, though, advance understanding of all the terms and conditions of the offer. The offering of any inducements to do business is subject to the limitations and restrictions of state law and the ethical obligations established by any applicable Stand of Practice. (Amended 1/95) SOP 12-4: REALTORS® shall not offer for sale/lease or advertise property without authority. When acting as listing brokers or as subagents, REALTORS® shall not quote a price different from that agreed upon with the seller/ landlord. (Amended 1/93) SOP 12-5: REALTORS® shall not

advertise nor permit any person employed by or affiliated with them to advertise real estate services or listed property in any medium (e.g., electronically, print, radio television, etc.) without disclosing the name of the REALTORS® firm in a reasonable and readily apparent manner either in the advertisement or in electronic advertising via a link to a display with all required disclosures. (Adopted 11/86, Amended 1/16) SOP 12-6: REALTORS®, when advertising unlisted real property for sale/lease in which they have an ownership interest, shall disclose their status as both owners/landlords and as REALTORS® or real estate licensees. (Amended 1/93) SOP 12-7: Only REALTORS® who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have “sold” the property. Prior to closing, a cooperating broker may post a “sold” sign only with the consent of the listing broker. (Amended 1/96) SOP 12-8: The obligation to present a true picture in representations to the public includes information presented, provide, or displayed on REALTORS® websites. REALTORS® shall use reasonable efforts to ensure that information on their websites is current. When it becomes apparent that information on a REALTORS® website is no longer current or accurate, REALTORS® shall promptly take corrective action. (Adopted 01/07) SOP 12-9: REALTOR® firm websites shall disclose the firm’s

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name and state(s) of licensure in a reasonable and readily apparent manner. Websites of REALTORS® and non-member licensees affiliated with a REALTOR® firm shall disclose the firm’s name and that REALTOR®’S or non-member licensee’s state(s) of licensure in a reasonable and readily apparent manner. (Adopted 1/07) SOP 12-10: REALTORS® obligation to present a true picture in their advertising and representations to the public includes internet content, images, and the URLs and domain names they sue, and prohibits REALTORS® from: 1). Engaging in deceptive or unauthorized framing of real estate brokerage websites: 2). Manipulating (e.g., presenting content develop by others) listing and other content in any way that produces a deceptive or misleading result: 3). Deceptively using metatags, keywords or other devices/ methods to direct, drive, or divert internet traffic; or 4). Presenting content developed by others without either attribution or without permission; or 5). Otherwise misleading consumers, including use of misleading images. (Adopted 1/07, Amended 1/18) SOP 12-11: REALTORS® intending to share or sell consumer information gathered via the internet shall disclose that possibility in a reasonable and readily apparent manner. (Adopted 1/07) SOP 12-12: REALTORS® shall not: 1). Use URLs or domain names that present les than a true picture, or 2). Register URLs or domain

names which, if used, would present less than a true picture (Adopted 1/08) SOP 12-13: The obligation to present a true picture in advertising, marketing, and representations allows REALTORS® to use a display only professional designations, certifications, and other credentials to which they are legitimately entitled (Adopted 1/08)

ARTICLE 13 REALTORS® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction required it.

ARTICLE 1 4 If charged with unethical practice or asked to present evidence or to cooperate in any other way, in any professional standards proceeding or investigation, REALTORS® shall place all pertinent facts before the proper tribunals of the Member Board or affiliated institute, society, or council in which membership, is held and shall take no action to disrupt or obstruct such processes. (Amended 1/99) SOP 14-1: REALTORS® shall not be subject to disciplinary proceedings in more than one Board of REALTORS® or affiliated institute, society, or council in which they hold membership with respect to alleged violations of the Code of Ethics relating to the same transaction or event. (Amended 1/95) SOP 14-2: REALTORS® shall not make any unauthorized disclosure or dissemination of the allegations,

finding, or decisions developed in connection with an ethics hearing or appeal or in connection with an arbitration hearing or procedural review. (Amended 1/92) SOP 14-3: REALTORS® shall not obstruct the Board’s investigative or professional standards proceedings by instituting or threatening to institute actions for libel, slander, or defamation against any party to a professional standards proceeding or their witnesses based on the filing of an arbitration request, an ethics complaint, or testimony given before any tribunal. (Adopted 11/87, Amended 1/99) SOP 14-4: REALTORS® shall not intentionally impede the Board’s investigative or disciplinary proceedings by filing multiple ethics complaints based on the same event or transaction. (Adopted 11/88)

Duties to REALTORS® ARTICLE 15 REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practice. (Amended 1/12) SOP 15-1: REALTORS® shall not knowingly or recklessly file false or unfounded ethics complaints. (Adopted 1/00) SOP 15-2: The obligation to refrain from making false or misleading statements about other real estate professionals, their business, or their business practice includes the duty to not knowingly or recklessly publish, repeat, retransmit, or republish false or misleading statements make by BAKERSFIELD ASSOCIATION OF REALTORS®

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others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the internet), or by any other means. (Adopted 1/07, Amended 1/12) SOP 15-3: The obligation to refrain from making false or misleading statements about other real estate professionals, their businesses, and their business practices includes the duty to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading. (Adopted 1/10, Amended 1/12)

ARTICLE 16 REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients. (Amended 1/04) SOP 16-1: Article 16 is not intended to prohibit aggressive or innovative business practices which are otherwise ethical and does not prohibit disagreements with other REALTORS® involving commission, fees compensation or other forms of payment or expenses. (Adopted 1/93, Amended 1/95) SOP 16-2: Article 16 does not preclude REALTORS® from making general announcements to prospects describing their services and the terms of their availability even though some recipients may have entered into agency agreements or other exclusive relationships with another REALTOR®. A general telephone

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canvass, general mailing or distribution addressed to all prospects in a give geographical area or in a give profession, business, club, or organization, or other classification or group is deemed “general” for purposes of this standard. (Amended 1/04) Article 16 is intended to recognize as unethical two basic types of solicitations: First, telephone or personal solicitations of property owners who have been identified by a real estate sign, multiple listing compilation, or other information service as having exclusively listed their property with another REALTOR® and Second, mall or other forms of written solicitations of prospects whose properties are exclusively listed with another REALTOR® when such solicitations are not part of a general mailing but are directed specifically to property owners identified through compilations of current listings. “for sale” or “for rent” signs, or other sources of information required by Article 3 and Multiple Listings Service rules to be made available to other REALTORS® under offers of sub-agency or cooperation. (Amended 1/04) SOP 16-3: Article 16 does not preclude REALTORS® from contracting the client of another broker for the purpose of offering to provide, or entering into a contract to provide, a different type of real estate service unrelated to the type of service currently being provided (e.g., property management as opposed to brokerage) or from offering the same type of service for property

not subject to other brokers’ exclusive agreements. However, information received through a Multiple Listing Service or any other of cooperation may not be used to target clients or other REALTORS® to whom such offers to provide services may be made. (Amended 1/04) SOP 16-4: REALTORS® shall not solicit a listing which is currently listed exclusively with another broker. However, if the listing broker, when asked by the REALTOR®, refuses to disclose the expiration date and nature of such listing i.e., an exclusive right to sell, and exclusive agency, open listing, or other form of contractual agreement between the listing broker and the client, the REALTOR® may contact the owner to secure such information and may discuss the terms upon which the REALTOR® might take a future listing or, alternatively, may take a listing become effective upon expiration of any existing exclusive listing. (Amended 12/94) SOP 16-5: REALTORS® shall not solicit buyer/tenant agreements from buyers/tenants who are subject to exclusive buyer/tenant agreements. However, if asked by a REALTOR®, the broker refuses to disclose the expiration date of the exclusive buyer/tenant agreement, the REALTOR® may contact the buyer/tenant to secure such information and may discuss the terms upon which the REALTOR® might enter into a future buyer/ tenant agreement or, alternatively, may enter into a buyer/tenant agreement to become effective upon the expiration of any existing exclusive buyer/tenant agreement.

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(Adopted 1/94, Amended 1/98) SOP 16-6: When REALTORS® are contacted by the client of another REALTOR® regarding the creation of an exclusive relationship to provide the same type of service, the REALTORS® have not directly or indirectly initiated such discussion, they may discuss the terms upon which they might enter into a future agreement or, alternatively, may enter into an agreement which becomes effective upon expiration of any existing exclusive agreement. (Amended 1/98) SOP 16-7: The fact that a prospect has retained a REALTOR® as an exclusive representative or exclusive broker in one or more past transitions does not preclude other RALTORS® from seeking such prospect’s future business. (Amended 1/04) SOP 16-8: The fact that an exclusive agreement has been entered into with a REALTOR® shall not preclude or inhibit any other REALTOR® from entering into a similar agreement after the expiration of the prior agreement. (Amended 1/98) SOP 16-9: REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service. (Amended 1/04) SOP 16-10: REALTORS®, acting as buyer or tenant representatives or brokers, shall disclose that relationship to the seller/ landlord’s representative or broker at first contact and shall provide written confirmation of that

disclosure to the sell/landlord’s representative or broker not lather than execution of purchase agreement or lease. (Amended 1/04) SOP 16-11: On unlisted property, REALTORS® acting as buyer/tenant representatives or brokers shall disclose that relationship to the seller/landlord at first contact for that buyer/tenant and shall provide written confirmation of such disclosure to the seller/ landlord not later than execution of any purchase or lease agreement. (Amended 1/04) REALTORS® shall make any request for anticipated compensation from the seller/landlord at first contact. (Amended 1/98) SOP 16-12: REALTORS®, acting as representatives or brokers of sellers/landlords or as subagents of listing brokers, shall disclose that relationship to buyers/tenants as soon as practicable and shall provide written confirmation of such disclosure to buyers/tenants not later than execution of any purchase or lease agreement. (Amended 1/04) SOP 16-13: All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except wither such dealings are initiated by the client. Before providing substantive services (such as writing a purchase offer or presenting a CMA) to prospects, REALTORS® shall ask prospects whether

they are a party to an exclusive representation agreement. REALTORS® shall not knowingly provide substantive services concerning a prospective transaction to prospects who are parties to exclusive representation agreements, except with the consent of the prospects’’ exclusive representatives or at the direction of prospects. (Amended 1/04) SOP 16-14: REALTORS® are free to enter into contractual relationships or to negotiate with sellers/landlords, buyers/tenants or others who are not subject to an exclusive agreement but shall not knowingly obligate them to pay more than one commission except with their informed consent. (Amended 1/98) SOP 16-15: In cooperative transactions REALTORS® shall compensate cooperating REALTORS® (principal brokers) and shall not compensate nor offer to compensate, directly or indirectly, any of the sales licensees employed by or affiliated with other REALTORS® without the prior express knowledge and consent of the cooperating broker. SOP 16-16: REALTORS®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/ lease contingent on the listing broker’s agreement to modify the offer of compensation. (Amended 1/04) SOP 16-17: REALTORS®, acting BAKERSFIELD ASSOCIATION OF REALTORS®

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as subagents or as buyer/tenant representatives or brokers, shall not attempt to extend a listing broker’s offer of cooperation and/ or compensation to other brokers without the consent of the listing broker. (Amended 1/04) SOP 16-18: REALTORS® shall not use information obtained from listing brokers through offers to cooperate made through multiple listing services or through other offers of cooperation to refer listing brokers’ clients to other brokers or to create buyer/ tenant relationships with listing brokers’ clients, unless such use is authorized by listing brokers. (Amended 1/02) SOP 16-19: Signs giving notice of property for sale, rent, lease, or exchange shall not be placed on property without consent of the seller/landlord. (Amended 1/93) SOP 16-20: REALTORS®, prior to or after their relationship with their current firm is terminated, shall not induce clients of their current firm to cancel exclusive contractual agreements between the client and that firm. This does not preclude REALTORS® (principals) from establishing agreements with their associated licensees governing assignability of exclusive agreements. (Adopted 1/98, Amended 1/10)

ARTICLE 1 7 In the event of contractual disputes or specific noncontractual disputes as defined in Standard of Practice 17-4 between REALTORS® (principals) associated with different firms arising out of their relationships as REALTORS® the REALTORS® shall mediate the dispute if the Board requires

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its members to mediate. If the dispute is not resolved through mediation, or if mediations not required, REALTORS® shall submit the dispute to arbitration in accordance with the policies of the Board rather than litigate the matter. In the event clients of REALTORS® wish to mediate or arbitrate contractual disputes arising out of real estate transitions, REALTORS® shall mediate or arbitrate those disputes in accordance with the policies of the Board, provided the clients agree to be bound by any resulting agreement or award. The obligation to participate in mediation and arbitration contemplated by this Article includes the obligation of REALTORS® (principles) to cause their firms to mediate and arbitrate and be bound by any resulting agreement or award. (amended 1/12) SOP 17-1: The filing of litigation and refusal to withdraw from it by REALTORS® in an arbitrable matter constitutes a refusal to arbitrate. (Adopted 2/86) SOP 17-2: Article 17 does not require REALTORS® to mediate in those circumstances when all parties to the dispute advise the Board in writing that they choose not to mediate through the Board’s facilities. The fact that all parties decline to participate in mediation does not relieve REALTORS® of the duty to arbitrate. Article 17 does not require REALTORS® to arbitrate in those circumstances when all parties to the dispute advise the Board in writing that they choose not to arbitrate before the Board.

(Amended 1/12) SOP 17-3: REALTORS®, when acting solely as principals in a real estate transaction, are not obligated to arbitrate disputes with other REALTORS® absent a specific written agreement to the contrary. (Adopted 1/96) SOP 17-4: Specific non-contractual disputes that are subject to arbitration pursuant to Article 17 are: 1). Where a listing broker has compensated a cooperating broker and another cooperating broker subsequently claims to be the procuring cause of the sale or lease. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being named as a respondent. When arbitration occurs between two (or more) cooperating brokers and where the listing broker is not a party, the amount in dispute and the amount paid to the respondent by the listing broker and any amount credited or paid to a party to the transaction at the discretion of the respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parities for compensation arising out of the underlying transaction. Adopted 1/97, Amended 1/07) 2). Where a buyer or tenant representative is compensated by the seller or landlord, and not by

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the listing broker, and the listing broker, as a result, reduces the commission owed by the seller or landlord and, subsequent to such actions, another cooperating broker claims to be the procuring cause of sale or leas. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being names as a respondent. When arbitration occurs between two (or more) cooperating brokers and where the listing broker is not a party, the amount in dispute and the amount of any potential resulting award is limited to the amount paid to the respondent by the seller or landlord and any amount credited or paid to a party to the transaction at the direction of the respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a their-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of underlying cooperative transaction. (Adopted 1/97, Amended 1/07) 3). Where a buyer or tenant representative is compensated by the buyer or tenant and, as a result, the listing broker reduces the commission owed by the seller or landlord and, subsequent to each actions, another cooperating broker claims to be the procuring cause of sale of lase. In such cases the complainant may name the first cooperating broker as

respondent and arbitration may proceed without the listing broker being names as a respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of the underlying cooperative transaction. Adopted 1/97) 4). Where two or more listing brokers claim entitlement to compensation pursuant to open listings with a seller or landlord who agrees to participate in arbitration (or who request arbitration) and who agrees to be bound by the decision. In cases where one of the listing brokers has been compensated by the seller or landlord, the other listing broker, as complainant, may name the first listing broker as respondent and arbitration may proceed between the brokers. (Adopted 1/97) 5). Where a buyer or tenant representative is compensated by the seller or landlord, and not by the listing broker, and the listing broker, as a result, reduces the commission owed by the seller or landlord and, subsequent to such actions, claims to be the procuring cause of sale or lease. In such cases arbitration shall be between the listing broker and the buyer or tenant representative and the amount in dispute is limited to the amount of the reduction of commission to which the listing

broker agreed. (Adopted 1/05) SOP 17-5: The obligation to arbitrate established in Article 17 includes disputes between REALTORS® (principals) in different states in instances where, absent an established inter-association arbitration agreement, the REALTOR® (principal) requesting arbitration agrees to submit to the jurisdiction of, travel to, participate in, and be bound by any resulting award rendered in arbitration conducted by the respondent(s) REALTORS® association, in instances where the respondent(s) REALTORS® association determines that an arbitrable issue exists. (Adopted 1/07) Explanatory Notes The reader should be aware of the following policies which have been approved by the Board of Directors of the National Association: In filing a change of an alleged violation of the Code of Ethics by a REALTOR® the charge must read as an alleged violation of one or more Articles of the Code. Standards of Practice may be cited in support of the charge. The Standards of Practice serve to clarify the ethical obligations imposed by the various Articles and supplement, and do not substitute for, the Case Interpretations in Interpretations of the Code of Ethics. Modifications to existing Standards of Practice and additional new Standards of Practice are approved from time to time. Readers are cautioned to ensure that the most recent publications are utilized. BAKERSFIELD ASSOCIATION OF REALTORS®

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NOTES

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NATIO NA L A SSO CIATION OF REALTORS ®

CORE STANDARDS

Fourth Compliance Cycle | January 1 - December 31, 2018 Every local and state association of REALTORS® shall annually demonstrate compliance with the following Core Standards. As used in this policy “state association” and “state association of REALTORS®” includes the territorial associations of REALTORS®. The Fourth Compliance Cycle began January 1, 2018, through December 31, 2018. Local associations will be responsible for communicating and describing the programs, products and services of national

and state associations such that all members will understand value propositions at all three levels.

for their local associations, but

Overall Procedural Highlights

compliance cycle to demonstrate

Annual Deadline Date Core Standards has transitioned to a calendar year compliance schedule. The fourth cycle began January 1, 2018, and ending December 31, 2018. Cycles will continue to be 12 months, coinciding with the calendar year. State association can establish earlier submission deadlines

local associations still have until the end of the calendar year/ their compliance. State associations have until the end of January to complete their review/ certification process. Appeals to the determinations of noncompliance can be filed in February, with the NAR appeal hearings conducted in March. The NAR Board of Directors will act on charter revocations during the May Legislative Meetings. BAKERSFIELD ASSOCIATION OF REALTORS®

Appeal Hearing Process Appeals to the determinations of noncompliance can be filed in February, with the NAR appeal hearings conducted in March or April. The NAR Board of Directors will act on charter revocations during the May Legislative Meetings. Local associations have until the end of February to appeal state associations’ determinations of noncompliance and the NAR Association Executives Committee’s appointed hearing panels will conduct appeal hearings in March. Hearing panels can grant extensions until April 30, by which time compliance must be demonstrated. Compliance extensions will be granted only when associations show substantial compliance with the Core Standards.

Code of Ethics A. Every association will provide new and continuing member Code of Ethics training as required by Article IV of the NAR Bylaws. B. Every association will maintain a viable professional standards process to enforce the Code of Ethics and provide arbitration and mediation as member services. Associations must have a fully functioning professional standards

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committee with administrative capability to conduct the program, or must administer professional standards enforcement through a multi-board (or regional) professional standards agreement with other associations or with the state association. C. Every association will provide mediation services to members as required by Article IV of the NAR Bylaws. Associations may also offer ombudsman services to members and their clients and customers and, if available in the state, may implement a “citation” enforcement policy.

Advocacy A. Unless prohibited by state law and in recognition of state law differences, each association shall include in their dues billing a voluntary contribution for the PAC or the Political Advocacy Fund (PAF) in an amount adequate to meet any NAR established RPAC fundraising goals. Dues billing for PAC or PAF contributions has been proven to be the most effective method for raising PAC or PAF dollars and in engaging our members in political advocacy*. A local association will have met this Mandatory Core Standard, regardless of whether they collect

the full amount of their NAR established goal, if they include the voluntary contribution on their dues bill. Notwithstanding the above, a local association that chooses not to include a PAC or PAF contribution on their dues bills, may, in the alternative, meet this Mandatory Core Standard if they deliver to NAR the full amount of any NAR established RPAC goal contributed by whatever legal means determined to be in the best interest of the local association (i.e. a corporate contribution in the full amount of the NAR established goal). In whatever manner the NAR established RPAC goal is met, funds shall be sent to RPAC or the PAF individually or collectively by/ through the State Association (i.e., one check concept). The intent of this standard is to provide the best opportunity for every association to meet its goal. *Unless prohibited by state law, it is recommended that to reach the highest participation levels possible, each local association include the contribution to either the PAC or the PAF “above the line” with appropriate disclaimers about the voluntary nature of the member contribution. B. Each association shall provide or distribute information and communications from NAR and the applicable state association, regarding the value of investing in and the benefits received from the individual’s participation in the PAC. C. Each association shall demonstrate participation in NAR Calls for Action (e.g., promotion through websites, newsletters,

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office visits, etc.). It is the state and local association’s obligation to provide adequate proof of participation. NAR shall monitor state association participation primarily through the REALTOR® Action Center Response Reports. If there are signs of insufficient participation, NAR shall investigate and encourage compliance. The state associations shall monitor local association participation primarily through the REALTOR® Action Center Response Reports. If there are signs of insufficient participation, the state association shall investigate and encourage compliance. D. Each local association shall demonstrate participation (if applicable) in State Calls for Action (e.g., promotion through websites, newsletters, office visits, etc.). It is the local association’s obligation to provide adequate proof of participation. E. In addition to the requirements established in subsections A-D, each association must support the REALTOR® Party’s “VoteAct-Invest” goals, and must annually conduct at least two initiatives or activities furthering or supporting each of those three goals respectively. Examples of initiatives and activities satisfying this requirement are available on NAR’s online Compliance Tool and in the Core Standards Frequently Asked Questions (“FAQs”) and in the REALTOR® Party Resource Guide.

Consumer Outreach A. Every association will demonstrate engagement in at least four meaningful

consumer engagement activities annually, including at least two activities demonstrating how the association is the “Voice for Real Estate” in its market, and at least two activities demonstrating the association’s involvement and/or investment in the community. 1. Being the “Voice for Real Estate” – promoting market statistics and/or real estate trends and issues (e.g., release through press releases, interviews, etc. of MLS statistics, local market statistics, NAR research reports, local/state analysis of NAR statistics, etc.) 2. Community involvement and investment – promoting the value proposition of using a REALTOR® and/or engaging in community activities which enhance the image of the REALTOR®, such as organizing human resources (e.g., participating in a Habitat for Humanity build) or conducting fundraising activities to benefit local community or charitable organizations. To meet this four activity per year requirement, each association must execute a minimum of two “Being the ‘Voice for Real Estate’” activities and two “Community involvement and investment” activities during the year. It will not be enough, for example, for an association to engage in the same activity 4 times each year nor will financial support of a charitable organization alone be considered to have met this Mandatory Core Standard. Additionally, any one activity can only be quantified in one category.

Unification Efforts and Support of the REALTOR® Organization A. Every association will maintain, have access to or will have legal counsel available. B. Associations shall adopt and maintain corporate documents, policies and procedures that conform to local, state and federal laws. Associations will timely file legally required reports and documents (e.g., corporate renewal documents, state and federal tax returns, etc.) C. Every association shall annually certify that its board of directors has reviewed and discussed the association’s business or strategic plan, that the plan includes an advocacy component and a consumer outreach component, and that those components have actionable implementation strategies. D. Local and state association chief staff must complete at least six hours of REALTOR® association professional development on an annual basis. In associations without paid/salaried staff, this requirement is applicable to the individual primarily responsible for performing the functions ordinarily carried out by paid staff in other associations. E. Each state individually or in cooperation with another state association must annually provide at least six hours of professional development opportunities for local association executives. F. Associations will promote to their members the importance of participating in any NAR-

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conducted effort to assess

ability to move between websites

member understanding of the overall value provided by associations at all three levels of the REALTOR® organization. G. Licensees in limited function referral organizations (LFRO) shall be identified by the local and/or state associations for the purpose of inviting their participation in political advocacy (e.g., PAF and Calls for Action). H. To ensure proper dues reporting and collection, every state association will provide to each local association a comparative list of non-member licensees to the state membership records, at least semi-annually. I. Associations must annually offer, promote or provide at least one professional development opportunity for their members. J. Associations must annually certify they have conducted or promoted a REALTOR® Safety activity. K. Associations will annually provide resources for or access to leadership development education and/or training for their elected REALTOR® leaders, and will document the training, tools, programs, and resources they offer or provide access to. L. Associations with paid staff must adopt policies and procedures for conducting annual performance reviews of their chief paid staff, and must annually certify that a performance review for their chief paid staff has been conducted.

and create active links), post

Technology A. Every association must have an interactive website (defined as the

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access to professional standards and arbitration filing processes on the website and create a link to the websites of the other levels of the association for promotion of member programs, products and services. B. Every association must utilize an email and/or internet based means for member communication.

Financial Solvency A. Every association must adopt policies to ensure the fiscal integrity of their financial operations. B. All associations, state or local, with revenue of $50,000 or more must annually submit a report from a CPA which includes either an audit opinion or an accountant’s review report. For those associations with annual revenues of less than $50,000 (including MLS-generated revenue and revenue from other business subsidiaries), a compilation report prepared by a CPA will be acceptable. These thresholds apply to all associations whether tax exempt or for profit. It will be left to the discretion of each association as to the frequency of an audit versus a review, recognizing that the costs of each type of engagement vary greatly. C. Any association considering bankruptcy must first obtain NAR’s consent to file for bankruptcy. To the extent permitted by law, any association that declares bankruptcy will be subject to automatic charter review.

Compliance with the Mandatory Core Standards for Associations of REALTORS® These Mandatory Core Standards for Associations of REALTORS® will apply to every local and state association regardless of the membership they serve, including associations that serve business specialty members (e.g. commercial, appraisal, property management, etc.) in addition to, or exclusive of, residential practitioners. Enforcement of the Mandatory Core Standards for Associations of REALTORS® will be a collaborative effort between local associations, state associations and the national association. As a condition of continued membership in the National Association of REALTORS® every local and state association of REALTORS® shall, on an ongoing basis, comply with all mandatory policies adopted by the NAR Board of Directors from time to time including, but not limited to policies governing education on and enforcement of the Code of Ethics, membership, dues collection, NRDS reporting, and MLS. Additionally, every local and state association shall annually certify compliance with the Mandatory Core Standards for Associations of REALTORS® using the certification form or other applicable process provided by NAR (or, where applicable, by the state association). Certification of compliance (including all required supporting documentation) must be signed by the association’s chief staff officer,

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by the current elected president (or chairman of the board where the chief staff officer holds the title of “president”), and by the president-elect (or individual next in line to be the association’s REALTOR® president or chairman of the board). The signers of any attestation, certification or representation made on behalf of a local or state association with respect to the association’s compliance with these Mandatory Core Standards for Associations of REALTORS® shall be jointly and individually responsible for the accuracy and truthfulness of the representations made, and any misrepresentation or intentional inaccuracy can result in revocation of the association’s charter. Failure to maintain compliance with the Mandatory Core Standards for Associations of REALTORS® or

any other mandatory NAR policy on an ongoing basis can also result in disciplinary proceedings being initiated under the NAR Association Policy Violation Resolution Procedure. Every state association shall review the representations made by their constituent local associations and annually confirm to NAR that each local association’s certification is accurate and complete to the best of the state association’s knowledge and belief. State associations and NAR may request additional written documentation or other evidence of compliance from a local or state association if there is a question of compliance. If a state association does not confirm that a local association is compliant with the Mandatory Core Standards,

that local association’s charter as a member board of the NATIONAL ASSOCIATION OF REALTORS® will be revoked. However, no association will lose its charter without first being given an opportunity to appear before a hearing panel of the NAR Association Executives Committee to show cause why the association’s charter status as a member board should not be terminated. In such cases the panel’s recommendation will be reported to the NAR Board of Directors for final action. If a local association does not challenge the state’s conclusion that the local association did not meet the Core Standards, the fact that the association’s charter is being revoked will be included in the NAR Board of Directors consent agenda. BAKERSFIELD ASSOCIATION OF REALTORS®

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NOTES

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BYLAWS

Bakersfield Association of REALTORS® Approved by NAR 9/28/17

ARTICLE I NAME

(REQUIRED VERBATIM ADOPTION BY MEMBER BOARDS AND ASSOCIATIONS) Section 1. Name. The name of this organization shall be the BAKERSFIELD ASSOCIATION OF REALTORS®, Incorporated, hereinafter referred to as the “BAofR”. The term “Association” is used when referring to any Association of REALTORS®.) Section 2. REALTOR® Membership Mark in Name of Association. Inclusion and retention of the registered

collective membership mark “REALTORS®” in the name of the A.O.R. shall be governed by the Constitution and Bylaws of the NATIONAL ASSOCIATION OF REALTORS® (hereinafter “NAR”) as from time to time amended.

ARTICLE II

OBJECTIVES (REQUIRED VERBATIM ADOPTION BY MEMBER BOARDS AND ASSOCIATIONS) Section 1. Objectives. The

objectives of the A.O.R. are: (a) To unite those engaged in the recognized branches of the real estate profession for the purpose of exerting a beneficial influence upon the profession and related interests. The “recognized branches of the real estate profession include buying, selling, exchanging, renting or leasing, managing, appraising for others for compensation, financing, building, developing or subdividing real estate. (b) To promote and maintain high standards of conduct in the real

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estate profession as expressed in the Code of Ethics of the NAR (hereinafter “Code of Ethics”). (c) To provide a unified medium for real estate owners and those engaged in the real estate profession whereby their interests may be safeguarded and advanced. (d) To further the interests of home and other real property ownership. (e) To unite those engaged in the real estate profession in this community with the CALIFORNIA ASSOCIATION OF REALTORS® (hereinafter sometimes “C.A.R.”) and NAR thereby furthering their own objectives throughout the state and nation, and obtaining the benefits and privileges of membership therein. (f) To designate for the benefit of the public, those individuals within the state of California authorized to use the terms REALTOR® and REALTORS® as licensed, prescribed, and controlled by NAR

ARTICLE III

NATIONAL AND STATE MEMBERSHIPS (REQUIRED VERBATIM ADOPTION BY MEMBER BOARDS AND ASSOCIATIONS) Section 1. Association Membership in NAR and C.A.R. The BAofR shall be a member of NAR and C.A.R. as defined in the governing documents of NAR and C.A.R. By reason of the BAofR’s membership in NAR and C.A.R., each REALTOR® member of the BAofR shall be entitled to membership in NAR and C.A.R. without further payment of dues. The BAofR shall continue as a member of the NAR and C.A.R.,

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unless by a majority vote of all of its REALTOR® members the decision is made to withdraw, in which case NAR and C.A.R. shall be notified in writing at least one month in advance of the date designated for the termination of the BAofR membership. Section 2. Ownership and Use of REALTOR® Membership Marks. The BAofR recognizes the exclusive property rights of NAR in the terms REALTOR® and REALTORS®. The BAofR may use the terms while it is a member in good standing of NAR The BAofR shall discontinue use of the terms in any form in its name, upon ceasing to be a member of NAR, or upon a determination by the Board of Directors of NAR that it has violated the conditions imposed upon the terms. Section 3. Adoption & Enforcement of NAR Code of Ethics: Compliance with NAR & C.A.R. Governing Documents & Policies. The BAofR adopts the Code of Ethics and agrees to enforce the Code of Ethics among its REALTOR® members. The BAofR and all of its members agree to abide by the Constitution, Bylaws, Rules and Regulations, Code of Ethics, and policies of NAR and C.A.R. Section 4. Other Association Rules, Regulations & Policies. The BAofR may adopt any Rules and Regulations or policies not inconsistent with the Constitution, Bylaws, Rules and Regulations, Code of Ethics, and policies of NAR and C.A.R. and these Bylaws. Any inconsistencies between the BAofR’s Rules and Regulations or

policies and these Bylaws of the BAofR (hereinafter “Bylaws”) shall be controlled by the Bylaws.

ARTICLE IV

JURISDICTION (REQUIRED VERBATIM ADOPTION BY MEMBER BOARDS AND ASSOCIATIONS) Section 1. Description of Jurisdiction. The territorial jurisdiction of the BAofR as a member of NAR is: FIRST NORTHERN BOUNDARY LINE: Beginning at the northwest corner of Township 25 South, Range 23 East, Mount Diablo Base and Meridian, Kern County, California, said point being on the North line of said County of Kern; thence easterly along said North line to the centerline of Highway 65, Porterville Highway; thence FIRST EASTERN BOUNDARY LINE: southerly, along said centerline of State Highway 65, Porterville Highway, to the centerline of Lerdo Highway, a point on the North line of Section 16, Township 28 South, Range 27 East; thence SECOND NORTHERN BOUNDARY LINE: easterly along the North line of said Section 16, Sections 15, 14, 13 of said township; thence continue easterly along the North line of the following: Township 28 South, Range 29 East: Township 28 South, Range 30 East: Sections 18, 17, 16, 15 of Township 28 South, Range 31 East, to the northeast corner of said Section 15; thence SECOND EASTERN BOUNDARY LINE: southerly along the East line of said Section 15, Sections 22, 27, 34 of last said township to the southeast corner of said

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Section 34, being on the North line of Section 2, Township 29 South, Range 31 East; thence easterly along the North line of said Section 2, to the northeast corner of said Section 2; thence southerly along the easterly line of the following Sections: said Sections 2, 11, 14, 23, 26, 35, of last said township: Sections 2, 11, 15, 23, 26, 35, Township 30 South, Range 31 East, to the southeast corner of said Section 35: thence westerly along the south line of said Section 35 to the El Tejon Rancho line; thence continue westerly along said Rancho line being the North line of Section 2 and partial Section 3 of Township 31 South, Range 31 East to a point on said partial Section 3: thence southwesterly along said Rancho Line common to said partial Section 3 and partial Sections 4, 9, 8, 17, 18, 19 to the westerly line of said partial Section 19; thence departing from said Rancho line, southerly along the East line of partial Section 24, partial Section 25 and Section 36 of said township; thence continue southerly along the East line of partial Township 32 South, Range 30 East, to the North line of partial Section 28, township 12 North, Range 17 West, San Bernardino Base and Meridian: thence southerly along the southerly prolongation of the East line of Township 32 South, Range 30 East, to the El Tejon Rancho Line; thence southeasterly along said Rancho Line to the East line of Section 13 Township 11 North, Range 17 West; thence departing from said Rancho Line southerly along said East line of said Section

13 and the East line of Section 24, 25, 36 of last said Township; thence continue southerly along the East line of Sections 1, 12, 13, 24, 25, fractional Section 36 of last said township; thence SOUTHERN BOUNDARY LINE: westerly along the South line of fractional Sections 36, 35, 34, 33, 32 of said township to the aforesaid El Tejon Rancho Line; thence continue westerly along the westerly prolongation of the South line of said township to the centerline of right of way of Highway Interstate 5; thence southerly along said centerline to a point on the easterly prolongation of the South line of Township 10 North, Range 19 West; thence westerly along said easterly prolongation and the South line of partial Sections 32, 31 of last said township; thence continue westerly along the South line of Sections 36, 35, Township 10 North, Range 20 West, to the Northern boundary of the Los Padres National Forest; thence continue westerly along said South line and said Northern boundary to the southwest corner of Township 10 North, Range 20 West; thence northerly along the West line of said township and said Northern boundary to the southeast corner of Township 10 North, Range 21 West; thence westerly along the South line of last said township and said Northern boundary to the southwest corner of last said township and boundary; thence southerly along the East line of Township 10 North, Range 22 West, to the southeast corner of last said township; thence westerly along last said South line and

North line to a point on the South line of Section 31, Township 10 North, Range 23 West, being the northwest corner of Section 6, Township 9 North, Range 23 West, also being a point on the Kern County, Ventura County boundary; thence continue westerly along said South line and said boundary to the southwest corner of said Section 31; thence WESTERN BOUNDARY LINE: departing from said county line northerly along the West line of Township 10 North, Range 23 West, Township 11 North, Range 23 West, and fractional Township 12 North, Range 23 West, to the northwest corner of fractional Section 3 of said fractional township; thence westerly along the South line of Section 34, Township 32 North, Range 24 East, Mount Diablo Base and Meridian to the southwest corner of said Section 34; thence northerly along the West line of said Section 34, Sections 27, 22, 15, 10, 3, of said township; thence continue northerly along the West line of Sections 34, 27, 22, Township 31 South, Range 24 East, to the centerline of State Highway 33; thence northerly along said centerline to the North line of Section 4, Township 31 South, Range 25 East; thence westerly along the South line of Sections 33, 32, 31, Township 30 South, Range 25 East; thence continue westerly along the South line of Township 30 South, Range 24 East, and Township 30 South, Range 23 East, to the southwest corner of last said township; thence northerly along the West line of last said township and BAKERSFIELD ASSOCIATION OF REALTORSÂŽ

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Township 29 South, Range 23 East, to the northwest corner of last said township, being the centerline of Seventh Standard Road; thence easterly along the North line of last said township (Seventh Standard Road) to the southwest corner of Township 28 South, Range 23 East; thence northerly along the West line of adjacent townships to the North line of Kern County and the true point of beginning. Section 2. Jurisdictional Rights. Territorial jurisdiction is defined to mean: The right and duty to control the use of the terms REALTOR® and REALTORS® subject to the conditions set forth in these Bylaws and those of NAR, and to protect and safeguard the property rights of NAR in those terms.

ARTICLE V

MEMBERSHIP, QUALIFICATION, APPLICATION AND ACCEPTANCE Section 1. Classes of Membership. There shall be six (6) classes of membership: (a) REALTOR® Members; (b) Institute Affiliate Members; (c) Affiliate Members; (d) Public Service Members; (e) Honorary Members; and f) Student Members. Section 2. Qualifications of REALTOR® Members. 2.1 REALTOR® Members, whether primary or secondary, who are principals, partners, corporate officers or branch office managers of real estate firms shall: (a) Maintain a current, valid California real estate broker license or salesperson license or California real estate appraisal certification or license; and

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(b) Act as a sole proprietor, partner, or corporate officer of a real estate firm or office manager of a real estate firm acting on behalf of the firm’s principal(s); and (c) Remain actively engaged in the real estate profession; and (d) Maintain or be associated with a real estate office located within the state of California or a state contiguous thereto; and (e) Have no record of official sanctions rendered by the courts or other lawful authorities for (i) violations of civil rights laws or real estate license laws within the past three years or (ii) criminal convictions within the past ten years where the crime was punishable by death or imprisonment in excess of one year under the law under which the applicant was convicted (ten years is measured from the date of the conviction or the release of the applicant from the confinement imposed for that conviction, whichever is the later date). 2.2 REALTOR® members, whether primary or secondary, other than principals, partners, or corporate officers or branch office managers of real estate firms shall: (a) Maintain a current, valid California real estate broker or salesperson license or California real estate appraisal certification or license; and (b) Remain actively engaged in the real estate profession; and (c) Remain employed by or affiliated as an independent contractor with a REALTOR® member who meets the

requirements in Section 2.1 of this Article V for any REALTOR® association in California or a state contiguous thereto; and (d) Have no record of official sanctions rendered by the courts or other lawful authorities for (i) violations of civil rights laws or real estate license laws within the past three years or (ii) criminal convictions within the past ten years where the crime was punishable by death or imprisonment in excess of one year under the law under which the applicant was convicted (ten years is measured from the date of the conviction or the release of the applicant from the confinement imposed for that conviction, whichever is the later date). 2.3 REALTOR® members may be franchise corporate officers as described below in Article V, Section 2.8. 2.4 Designated REALTORS®. Each firm shall designate in writing one REALTOR® member (the “Designated Realtor”) who shall be responsible for the conduct of individuals affiliated with the firm and accountable to the BAofR for all duties and obligations of BAofR membership, including, but not limited to, certification as set forth in Article VI, Section 10. The Designated REALTOR® must be the sole proprietor, partner, corporate officer or an office manager acting on behalf of the firm’s principal(s) and must have the authority to bind the firm in arbitrations and must meet all the other qualifications for REALTOR® membership set forth in Article V, Section 2.1 of these Bylaws.

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2.5. Association of Choice. (a) Primary Membership. Licensees affiliated with a REALTOR® firm may choose as their “primary” association any REALTOR® Association within California where the firm maintains a Designated REALTOR®. If a REALTOR® is a primary member of the BAofR, the BAofR pays C.A.R. and NAR dues for that individual. (b) Secondary Membership. A REALTOR® who has joined another REALTOR® Association as a primary member may join the BAofR as a secondary member. There need not be a Designated REALTOR® member of this BAofR for licensees to select this BAofR as their secondary Association. The conditions for secondary membership shall be no more stringent than for primary membership, and the privileges of membership shall be the same including the right to vote and hold office. 2.6 Required REALTOR® Membership of Officers and Partners. All persons who are partners in a partnership or officers in a corporation, and actively engaged in the real estate profession within the state of California or a state contiguous thereto or are franchise corporate officers as described below shall be ineligible for any class of membership other than REALTOR® membership. Each is required to hold REALTOR® membership individually in a local REALTOR® Association in California or in a state contiguous thereto, if they meet all the other qualifications set forth in Article V, Sections 2.1,

2.2, or 2.3 of these Bylaws unless they otherwise qualify for Institute Affiliate membership as described in Article V, Section 3. 2.7. In the case of a real estate firm, partnership or corporation whose business activity is substantially all commercial, only those principals actively engaged in the real estate business in connection with the same office, or any other offices within the jurisdiction of the BAofR in which one of the firm’s principals holds REALTOR® membership, shall be required to hold REALTOR® membership unless otherwise qualified for Institute Affiliate Membership as described in Article V, Section 3. 2.8 Franchise Corporate Officers. Notwithstanding any other provision herein, franchise corporate officers of real estate brokerage franchise organizations with at least one hundred fifty franchisees located within the United States, its insular possessions and the commonwealth of Puerto Rico, may be elected to membership pursuant to the Constitution and Bylaws of NAR (hereinafter “Franchise Corporate Officers”). Franchise Corporate Officers may or may not be licensed for California real estate broker or salesperson or appraisal activities. Franchise Corporate Officers shall enjoy all of the rights, privileges and obligations of REALTOR® membership, including compliance with the NAR Code of Ethics, except: obligations related to BAofR mandated education, meeting attendance, or indoctrination classes or other

similar requirements, if any; the right to use the term REALTOR® in connection with their franchise organization’s name; and the right to hold elective office in the BAofR, C.A.R., and NAR Section 3. Qualifications of Institute Affiliate Members. Institute Affiliate members shall be individuals who hold a professional designation awarded by a qualified Institute, Society or Council affiliated with the NAR that addresses a specialty area other than residential brokerage or individuals who otherwise hold a class of membership in such Institute, Society or Council that confers the right to vote or hold office. Any such individual, if otherwise eligible, may elect to hold REALTOR® membership, subject to payment of applicable dues for such membership. Section 4. Qualifications of Affiliate Members. Affiliate members shall be real estate owners, and other individuals or firms engaged in activities related to the real estate profession, who do not qualify for REALTOR® membership, or are certified or licensed appraisers in the State of California, who do not maintain an active real estate license. Affiliate members have interests requiring information concerning real estate and sympathy with the objectives of the BAofR. Affiliate membership shall also be granted to individuals licensed or certified to engage in real estate practice who, if otherwise eligible, do not elect to hold REALTOR® membership in the Association, provided the applicant is engaged exclusively in a specialty of the BAKERSFIELD ASSOCIATION OF REALTORS®

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real estate business other than brokerage of real property. Section 5. Qualifications of Public Service Members. Public Service members shall be those members who maintain an interest in the real estate profession as employees or affiliates of educational, public utility, governmental or other similar organizations and are not engaged in the real estate profession on their own account or in association with an established real estate business. Section 6. Qualifications of Honorary Members. Honorary members shall be those persons recognized by the Board of Directors as persons who have performed notable service for the real estate profession, for the BAofR, or for the public though not engaged in the real estate profession. If the Honorary Member has been a REALTOR® member of the Association who is retiring from active engagement in the real estate business, he shall not be entitled to vote nor hold office and shall not be required to pay that portion of local Association dues retained by the Association. However, if such Honorary Member wishes to continue to be termed a REALTOR® and receive C.A.R. and NAR services, then such member shall inform the Association and continue to pay that portion of local Association dues necessary to enable the Association to meet its dues obligations to the California Association of REALTORS® and the National Association of REALTORS®.

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Section 7. Qualifications for Student Members. Student members shall be students enrolled in an undergraduate or graduate degree program at an institution of higher education with a specialization or major in real estate, or who are seeking to obtain a real estate license or appraiser’s license but who are not eligible for REALTOR® membership. Section 8. Membership Application. (a) Each applicant for membership shall submit an application in such manner and form as may be prescribed by the BAofR Board of Directors (hereinafter “Board of Directors”) and give his or her consent that the Board of Directors, through its Membership Committee (hereinafter “Membership Committee”) or otherwise, may obtain information about the applicant from any member, other persons or Associations and that any information furnished to the Board of Directors by any member, person or Association shall not form the basis of any action for slander, libel or defamation of character. The Board of Directors, through its Membership Committee or otherwise, will consider the following in determining an applicant’s qualifications for membership: (1) all final findings of NAR Code of Ethics violations and violations of other membership duties in any other Associations within the past three (3) years; (2) pending ethics complaints or hearings; (3) unsatisfied discipline pending; (4) pending arbitration

requests or hearings; (5) unpaid arbitration awards or unpaid financial obligations to any other Association or its Multiple Listing Service (“MLS”). (b) Applicants for membership shall be familiar with and agree to abide by the Bylaws and Rules and Regulations of the BAofR, the Bylaws of C.A.R. and the NAR Constitution, Bylaws and Code of Ethics, to the extent they are applicable, and pass such reasonable and nondiscriminatory written examination thereon as may be required by the Membership Committee. Applicants must also attend an orientation program as may be required by the Board of Directors, its Membership Committee, or otherwise, said program to be attended in person or upon request by remote means. (c) Applicants for REALTOR® membership shall certify: that they have no record of official sanctions rendered by the courts or other lawful authorities for (i) violations of civil rights laws or real estate license laws within the past three years; or (2) that they have no criminal convictions within the past 10 years where the crime was punishable by death or imprisonment in excess of one year under the law under which the applicant was convicted (ten years is measured from the date of the conviction or the release of the applicant from the confinement imposed for that conviction, whichever is the later date); and (3) that they have not been suspended or expelled from a Association within the past three (3) years for violations of

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the NAR Code of Ethics. (d) Applicants who are sole proprietors, general partners, corporate officers, or branch office managers (Article V, Section 2) of a real estate firm must disclose: (1) whether they or their firms are subject to any pending bankruptcy proceedings; and (2) whether they or their firms have been adjudged bankrupt within the past three (3) years. If the applicant is party to pending bankruptcy or insolvency proceedings or has been adjudged bankrupt within the past three (3) years, the applicant may be required to pay cash in advance for BAofR and MLS fees for up to one year from the date that membership is approved or from the date that the applicant is discharged from bankruptcy, whichever is later. If the Board of Directors determines that such prepayments will not protect the interests of the BAofR or its members, such application may be rejected. Section 10. Prior Membership Records. The BAofR may consider information received from other Associations in determining whether an applicant satisfies BAofR’s membership requirements. BAofR may request from any Association where the applicant held prior membership, minimum “core” information including: (a) All final findings of Code of Ethics violations and violations of other membership duties within the past three (3) years; (b) Pending complaints alleging violations of the Code of Ethics or alleging violations of other membership duties;

(c) Incomplete or (pending) disciplinary measures; (d) Pending arbitration requests (or hearings); (e) Unpaid arbitration awards or unpaid financial obligations to the Association or its MLS; and (f) Any misuse of the term REALTOR® or REALTORS® in the name of the applicant’s firm. The BAofR will also consider all final findings of Code of Ethics violations and violations of other membership duties in the BAofR within the past three (3) years. NOTE: Article IV, Section 2, of the NAR Bylaws prohibits a Member A.O.R. from knowingly granting REALTOR® or REALTORASSOCIATE® membership to any applicant who has an unfulfilled sanction pending which was imposed by another Association for violation of the Code of Ethics. Section 11. Application Review and Acceptance. The procedure for acceptance to REALTOR® membership shall be as follows: (a) The Membership Committee shall determine whether the applicant is applying for the appropriate class of membership. If the A.O.R. does not have a standing membership committee, the A.O.R. Executive Officer/ staff may act in its capacity. The Membership Committee may request “core” information as defined in Article V, Section 10, from any Association of which the applicant was previously a member. The Membership Committee shall thereafter make a written report of its findings. The Membership Committee shall conduct all proceedings with strict attention to the principles of due

process and compliance with the Bylaws. (b) Within thirty (20) days, or when practicable, the Membership Committee shall report its recommendation to the applicant and Board of Directors in writing. If the recommendation is to reject the application, the applicant shall also receive a report and the reasons shall be specifically stated. If any member of the Membership Committee submits a dissenting recommendation, it shall also be reported to the applicant and Board of Directors. The applicant shall also be notified of his or her right to appear before the Board of Directors. (c) The Board of Directors shall review the qualifications of the applicant and the recommendations of the Membership Committee and then vote on the applicant’s eligibility for membership. If the applicant appears, he or she may be represented by counsel, call witnesses on his or her behalf and make such statements as he or she deems relevant. The Board of Directors may also have counsel present. If the applicant receives a majority vote of the Board of Directors, he or she shall be declared accepted as a member and shall be advised by written notice. An application for Institute Affiliate Membership shall be acted upon by the Board of Directors within forty-five days from the date of application for membership. (d) If the Board of Directors determines that the application should be rejected, it shall record its reasons. If the Board BAKERSFIELD ASSOCIATION OF REALTORS®

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of Directors believes that denial of membership to the applicant may become the basis of litigation and a claim of damage by the applicant, it may specify that denial shall become effective upon entry in a suit by the BAofR for a declaratory judgment by a court of competent jurisdiction of a final judgment declaring that the rejection violates no rights of the applicant. (e) The Board of Directors, through its Membership Committee or otherwise, may grant “provisional” membership to an applicant in instances where the applicant for membership has unsatisfied discipline pending in another REALTOR® association (except for violation of Code of Ethics) provided all other qualifications for membership have been satisfied. Provisional members shall be considered REALTORS® and shall be subject to all of the same privileges and obligations of REALTOR® membership. The Board of Directors may reconsider the membership status of provisional members when all unsatifsfied discipline has been resolved or if such matters are not resolved within six (6) months from the date that provisional membership is approved. At the time of reconsideration, if the Board of Directors determines that the individual has not satisfactorily resolved the unsatisfied discipline, at the discretion of the Board of Directors, membership may be terminated. (f) Upon withdrawal of an application for REALTOR® membership, either by voluntary decision of the applicant, by

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change of license status to no longer be eligible for membership, or by failure to complete the course of instruction outlined in Section 12 of this Article, dues and initiation fee submitted with the application shall be returned to the applicant. The Association may, however, retain a processing fee of $25 plus 1/12th of the amount of annual local dues multiplied by the number of months the application was pending. Section 12. New Member Code of Ethics Orientation. Applicants for REALTOR® membership and provisional REALTOR® members (where applicable) shall complete an orientation program on the Code of Ethics, meeting the minimum criteria established by NAR for new member ethics training. This requirement does not apply to applicants for REALTOR® membership or provisional members who have completed comparable orientation in another association, provided that REALTOR® membership has been continuous, or that any break in membership is for one year or less. Failure to satisfy this requirement within sixty (60) days of the date of application (or, alternatively, the date that provisional membership was granted), will result in denial of the membership application or termination of provisional membership. (Mandated) Section 13. Continuing Member Code of Ethics Training. Every two-year period, starting with the period from January 1, 2017 through December 31, 2018 for the successive two-year

period thereafter, each REALTOR® member of the A.O.R. shall be required to complete a course on the Code of Ethics, meeting the minimum criteria established by NAR for biennial Ethics Training. This requirement will be satisfied by presentation of documentation that the member has completed such course of instruction conducted by this or another Association, C.A.R., NAR or any other recognized educational institution. REALTOR® members who have completed training as a requirement of membership in another Association and REALTOR® members who have completed the new member code of Ethics Orientation during any two-year cycle shall not be required to complete additional Code of Ethics training until a new two-year period commences. Failure to satisfy this requirement shall be considered a violation of a membership duty and will result in suspension of membership for the first two months (January and February) of the year following the end of any two-year cycle or until the requirement is met, whichever occurs sooner. On March 1 of that year, the membership of a member who is still suspended as of that date for failure to complete the training requirement, will automatically be terminated (adopted 1/01 revised 01/17). Section 14. Status Changes. (a) REALTORS® who change the conditions under which they hold membership shall be required to provide written notification to the BAofR within thirty (30) days. A non-principal REALTOR® who becomes a principal in the firm

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with which he or she has been licensed or, becomes a principal in a new firm which will be comprised of REALTOR® principals, may be required to satisfy any previously unsatisfied membership requirements applicable to principal REALTOR® members. During the period of transition from one status of membership to another, such members shall be subject to all of the privileges and obligations of a principal REALTOR® member. The Board of Directors, at its discretion, may waive any qualification which the member has already fulfilled in accordance with the Bylaws of the BAofR. If the REALTOR® does not satisfy the requirements established in the Bylaws for the category of membership to which they have transferred within thirty (30) days of the date they advised the Association of their change in status, their application for change of status will terminate automatically unless otherwise so directed by the Board of Directors. (b) If the licensed status of any member is terminated, his or her membership in the BAofR shall terminate automatically. If any member ceases to meet any other ongoing qualification of membership, his or her membership may be terminated by the Board of Directors. Each member shall have the affirmative duty to notify the BAofR of any changes in their licensee status. (c) Any application fee related to a change in membership status shall be reduced by an amount equal to any application fee previously paid by the applicant. Dues shall be prorated from the first day of

the quarter in which the member is notified of acceptance by the Board of Directors of his or her change in status and shall be based on the new membership status for the remainder of the year. Section 15. Resignation. Resignations of members shall become effective when received in writing by the Board of Directors, provided, however, that if any member submitting the resignation is indebted to the BAofR for dues, fees, fines or other assessments of the BAofR or any of its services, departments, divisions or subsidiaries, the BAofR will use any means at its disposal for collection and may condition the right of the resigning member to reapply for membership upon payment in full of all such monies owed.

ARTICLE VI

PRIVILEGES AND DUTIES OF MEMBERSHIP Section 1. Member Compliance with Bylaws, Policies, Rules and Regulations. It shall be the duty of every member of the BAofR to abide by the Bylaws, Policies and Rules and Regulations of the BAofR. Any member of the BAofR may be reprimanded, fined, placed on probation, suspended or expelled by the Board of Directors for a violation of the Bylaws or the Rules and Regulations of the BAofR. If a hearing is required it shall be held in accordance with the California Code of Ethics and Arbitration Manual. Although only REALTOR® members are subject to the Code of Ethics and its enforcement by the BAofR, all members are encouraged to

abide by the principles established in the Code of Ethics and conduct their business and professional practices accordingly. Further, any non-REALTOR® member may, upon recommendation of a hearing panel of the Professional Standards Committee, be subject to discipline as described above, for any conduct, which in the opinion of the Board of Directors, reflects adversely on the real estate industry or the terms REALTOR® or REALTORS® and for conduct that is inconsistent with or adverse to the objectives and purposes of the BAofR, C.A.R. or NAR Section 2. Member Discipline. (a) Any member of the BAofR may be reprimanded, placed on probation, suspended or expelled for harassment of an Association or MLS employee or Association officer or director after an investigation in accordance with the procedures of the BAofR. As used in this section, harassment means any verbal or physical conduct including threatening or obscene language, unwelcome sexual advances, stalking, actions including strikes, shoves, kicks, or other similar physical contact, or threats to do the same, or any other conduct with the purpose or effect of unreasonably interfering with an individual’s work performance by creating a hostile, intimidating or offensive work environment. The decision of the appropriate disciplinary action to be taken shall be made by the investigatory team comprised of the President, President-Elect and one member of the Board of Directors selected by the highest BAKERSFIELD ASSOCIATION OF REALTORS®

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ranking officer not named in the complaint, upon consultation with counsel for the BAofR. Disciplinary action may include any sanction authorized in the California Code of Ethics and Arbitration Manual. If the complaint names the President or President-Elect, they may not participate in the proceedings and shall be replaced by the Immediate Past President or, alternatively, by another member of the Board of Directors selected by the highest ranking officer not named in the complaint. (b) Any REALTOR® member of the BAofR may be disciplined by the Board of Directors for violations of the Code of Ethics or other duties of membership after a hearing as described in the California Code of Ethics and Arbitration Manual, provided that the discipline imposed is consistent with NAR policy as set forth in the California Code of Ethics and Arbitration Manual. Section 3. Resignation with Pending Arbitration or Disciplinary Hearing. If a member resigns from the BAofR or otherwise causes membership to terminate with a disciplinary complaint pending, the complaint shall be processed until the decision of the A.O.R. with respect to disposition of the complaint is final by this BAofR. (if respondent does not hold membership in any other Association) or by any other Association in which the respondent continues to hold membership. If an ethics respondent resigns, or otherwise causes membership in all Associations to terminate

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before an ethics complaint is filed alleging unethical conduct occurred while the respondent was a REALTOR®, the complaint once filed shall be processed until the decision o the Association with respect to disposition of the complaint is final. In any instance where an ethics hearing is held subsequent to an ethics respondent’s resignation or membership termination, any discipline ratified by the Board of Directors, shall be held in abeyance until such time as the respondent rejoins the Association of REALTORS®. If a member resigns or otherwise causes membership to terminate, the duty to submit to arbitration continues in effect even after membership lapses or is terminated provided that the dispute arose while the former member was a member. Section 4. Voting Rights and Eligibility for Elective Office. Only REALTOR® members, whether primary or secondary, in good standing whose financial obligations to the BAofR are paid in full shall be entitled to vote and to hold elective office in the BAofR. Proxy voting is not allowed. Section 5. Privileges and Duties of REALTOR® Members. (a) It shall be the duty and responsibility of every REALTOR® member of this Association to abide by the Constitution and Bylaws of C.A.R., the Constitution and Bylaws of NAR and to abide by the Code of Ethics, as set forth in Article VII, Section 2 of these Bylaws. (b) REALTOR® members have the primary responsibility to safeguard and promote the standards,

interests and welfare of the BAofR and the real estate profession. (c) REALTOR® members may use the terms REALTOR® and REALTORS® subject to the provisions of Article VIII. (d) If a REALTOR® member who is a sole proprietor, principal in a firm, partner in a partnership, officer of a corporation, or branch office manager is suspended or expelled, his or her firm, partnership or corporation shall not use the terms REALTOR® or REALTORS® in connection with its business during the period of suspension or expulsion and the membership of all other principals, partners or corporate officers shall suspend or terminate during the period of suspension or expulsion, unless: (1) the disciplined member severs his or her connection with the firm, partnership or corporation; or (2) the disciplined member relinquishes management control of the firm. The membership of REALTORS® who are employed or affiliated as independent contractors with the disciplined member shall suspend or terminate during the period of suspension or expulsion unless: unless: (1) the disciplined member severs his or her connection with the firm, partnership or corporation; (2) the disciplined member relinquishes management control of the firm; or (3) the non-principal REALTOR® member elects to sever his or her connection with the disciplined member and affiliates with another REALTOR® member in good standing in the Association. If a REALTOR® member other than a sole proprietor in a firm,

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partner in a partnership, officer of a corporation or branch office manager is suspended or expelled, the use of the terms REALTOR® or REALTORS® by the firm, partnership or corporation shall not be affected. Removal of an individual from any form or degree of management control must be certified to the BAofR by the disciplined member and by the individual who is assuming management control. The signatures on such certification must be notarized. The foregoing is not intended to preclude a suspended or expelled member from functioning as an employee or independent contractor, provided no management control is exercised. (e) In any action taken against a principal REALTOR® member for suspension or expulsion, notice of such action shall be given to all REALTORS® employed by or affiliated as independent

contractors with such REALTOR® member and they shall be advised that the provisions in this Article VI, Section 5 shall apply. Section 6. Privileges and Duties of Institute Affiliate Members. Institute Affiliate members shall have the rights and privileges and be subject to the obligations prescribed by the Board of Directors consistent with the NAR Constitution and Bylaws. Section 7. Privileges and Duties of Affiliate Members. Affiliate members shall have the rights and privileges and be subject to the obligations prescribed by the Board of Directors. Section 8. Privileges and Duties of Public Service Members. Public Service members shall have the rights and privileges and be subject to the obligations prescribed by the Board of Directors. Section 9. Privileges and Duties of Honorary or Merited Members.

Honorary membership and Merited membership shall confer only the right to attend meetings and participate in discussions. However, if the Honorary or Merited member maintains an active real estate license, previously qualified for REALTOR® membership, continues to pay that portion of local Association dues necessary to enable the Association to meet its dues obligations to C.A.R. and NAR, they shall retain the privileges and duties of REALTOR® members. Section 10. Privileges and Duties of Student Members. Student members shall have the rights and privileges and be subject to the obligations prescribed by the Board of Directors. Section 11. Certification by Designated REALTOR®. Designated REALTORS® shall certify to the BAofR during

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the first month of each fiscal year, on a form provided by the BAofR, a complete listing of all individuals licensed or certified under California law with the REALTOR® firm(s) and shall designate the primary REALTOR® Association, if any, for each individual. These declarations shall be used for purposes of

responsibility of every REALTOR® member of this BAofR to abide by the Constitution and Bylaws and the Rules and Regulations of this BAofR, the Constitution and Bylaws of C.A.R., the Constitution and Bylaws of NAR, and the Code of Ethics, including the duty to arbitrate controversies arising out of real estate transactions

jointly and in full cooperation with NAR, use of the terms within its jurisdiction. Any misuse of the terms by members is a violation of a membership duty and may subject members to disciplinary action by the Board of Directors after a hearing as provided for in the California Code of Ethics and Arbitration Manual.

calculating dues under Article IX, Section 2 of these Bylaws. Designated REALTOR® members shall also notify the BAofR of any additional individual(s) licensed or certified with the firm(s) and of any individual whose affiliation with the firm was severed within thirty days of the date of affiliation or severance of the individual(s).

as specified by Article 17 of the NAR Code of Ethics and as further defined and in accordance with the procedures set forth in the California Code of Ethics and Arbitration Manual as from time to time amended by C.A.R. By becoming and remaining a member, every REALTOR® member agrees that he or she and the corporation or firm for which he or she acts as a partner, officer, principal, or branch office manager, will submit to arbitration through the BAofR all disputes with any other member or member of the public subject to the conditions set forth in the California Code of Ethics and Arbitration Manual.

Section 2. Jurisdictional Limits on Use of REALTOR® Membership Marks. REALTOR® members of the BAofR shall have the privilege of using the terms REALTOR® and REALTORS® in connection with their places of business within California, or a state contiguous thereto, so long as they remain REALTOR® members in good standing. No other class of members shall have this privilege.

ARTICLE VII

PROFESSIONAL STANDARDS AND ARBITRATION (REQUIRED VERBATIM ADOPTION BY MEMBER BOARDS AND ASSOCIATIONS) Section 1. Professional Standards and Arbitration. The responsibility of the BAofR and its members relating to the enforcement of the Code of Ethics, the disciplining of members, the arbitration of disputes, and the organization and procedures incident thereto shall be governed by the California Code of Ethics and Arbitration Manual, as published and from time to time amended by C.A.R., which by this reference is made a part of these Bylaws. Section 2. Member Compliance with NAR and C.A.R. Constitution, Bylaws, Policies, Rules, Regulations, and Code of Ethics. It shall be the duty and

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ARTICLE VII

USE OF THE TERMS REALTOR® AND REALTORS® (REQUIRED VERBATIM ADOPTION BY MEMBER BOARDS AND ASSOCIATIONS) Section 1. Use and Control of REALTOR® Membership Marks. Use of the terms REALTOR® and REALTORS® by members shall, at all times, be subject to the provisions of the Constitution and Bylaws of NAR and to the Rules and Regulations prescribed by its Board of Directors. The BAofR shall have the authority to control,

Section 3. Use of REALTOR® Membership Marks Dependent on Status of Firm Principals. A REALTOR® member who is a principal of a real estate firm, partnership, or corporation may use the terms REALTOR® and REALTORS® only if all the principals of such firm, partnership, or corporation who are actively engaged in the real estate profession within California, or a state contiguous thereto, are REALTOR® members. (a) In the case of a REALTOR® member who is a principal of a real estate firm, partnership or corporation whose business activity is substantially all commercial, the right to use the term REALTOR® or REALTORS® shall be limited to office locations in which a principal, partner, corporate officer or branch office manager of the firm, partnership

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or corporation holds REALTOR® membership. If a firm, partnership or corporation operates additional places of business in which no principal, partner, corporate officer or branch office manager holds REALTOR® membership, the term REALTORR® or REALTORS® may not be used in any reference to those additional places of business. Section 4. Institute Affiliate Members Ineligible to Use REALTOR® Membership Marks. Institute Affiliate members shall not use the terms REALTOR® or REALTORS® nor the imprint of the emblem seal of NAR

ARTICLE IX

DUES AND ASSESSMENTS Section 1. Application Fee. The Board of Directors may adopt a reasonable application fee for membership in the BAofR The application fee for REALTOR® membership shall not exceed three times the amount of the annual dues for REALTOR® membership. The application fee shall be required to accompany each application for membership in the BAofR and shall become the property of the BAofR upon final approval of the application. The Board of Directors may adopt an application fee for Institute Affiliate membership not in excess of the annual dues for Institute Affiliate members. Section 2. Dues. (a) The Board of Directors shall determine annually the amount of annual dues to be paid by each class of membership. (b) The dues of each Designated REALTOR® member shall be a base amount plus an amount multiplied

by the number of real estate licensees and licensed or certified appraisers under California law to which he or she certified under Article VI, Section 10, and who: (1) are employed by or affiliated as independent contractors or who are otherwise directly or indirectly licensed or certified with such REALTOR® member; and (2) are not REALTOR® members of any REALTOR® Association within California or a state contiguous thereto or Institute Affiliate members of this BAofR. In calculating the dues payable to the BAofR by a Designated REALTOR® member, non-member licensees as defined in (1) and (2) of this subparagraph shall not be included in the computation of dues if the Designated REALTOR® has paid dues based on nonmember licensees to another Association within the state of California or a state contiguous thereto, provided the Designated REALTOR® notifies the BAofR in writing of the identity of the Association to which dues have been remitted. The Corporation may issue dues billing direct to each individual member, but such fees, if unpaid, will be the obligation of the Designated REALTOR®. A REALTOR® with a direct or indirect ownership interest in an entity engaged exclusively in soliciting and/or referring clients and customers to the REALTOR® for consideration on a substantially exclusive basis (LFRO) shall annually file with the Association on a form approved by the Association a list of the licensees affiliated with that entity

and shall certify that all of the licensees affiliated with the entity are solely engaged in referring clients and customers and are not engaged in listing, selling, leasing, managing, counseling, appraising or arranging financing for real property and are not a Participant or Subscriber in a Multiple Listing Service (“MLS”). The individuals disclosed on such form shall not be deemed to be licensed with the REALTOR® filing the form for purposes of this Article IX, Section 2(b) and shall not be included in calculating the annual dues of the Designated REALTOR®. A REALTOR® with a direct or indirect ownership interest in an entity engaged in the real estate business which provides services for which a Mortgage Loan Originator licensee endorsement (MLO) is required, may annually file with the association, on a form approved by the association, a list of the MLO licensees and certify that the listed licensees (1) have a MLO license or endorsement, (2) are not engaged in real estate licensed activities except those for which and MLO is required, and (3) are not participants or subscribers in any Multiple Listing Service. The individuals disclosed on such forms shall not be deemed to be licensed with the REALTOR® filing the form for purposes of this Article IX, Section 2(b) and shall not be included in calculating the annual dues of the Designated REALTOR®. The exemption for any licensee included on the certification form for a LFRO shall automatically be revoked upon an individual being engaged in real estate licensed BAKERSFIELD ASSOCIATION OF REALTORS®

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activities (listing, selling, leasing, renting, managing, counseling or appraising or arranging financing for real property), other than referrals, or being a participant or subscriber of any Multiple Listing Service, and dues for the current fiscal year shall be due and payable. The exemption for any licensee, included on the certification form for an MLO exemption, shall automatically be revoked upon the individual being engaged in real estate licensed activities other than those activities for which an MO license or endorsement is required or upon their joining an MLS, and dues for the current fiscal year shall be due and payable. Membership dues shall be prorated for any licensee included on a certification form submitted to the Association who during the same calendar year applies for REALTOR® membership in the Association. However, membership dues shall not be prorated if the licensee held REALTOR® membership during the preceding calendar year. (c) The annual dues of REALTOR® members shall not include any allocation for C.A.R., if the member is a member of a REALTOR® association of C.A.R. and that association has paid C.A.R. dues for the member. (d) The annual dues of REALTOR® members shall not include any allocation for NAR, if the member is a member of a REALTOR® association of NAR and that association has paid NAR dues for the member. (e) In the case of a Designated

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REALTOR® member in a firm, partnership, or corporation whose business activity is substantially all commercial, any assessments for non-member licensees shall be limited to licensees affiliated with the Designated REALTOR® (as defined in subparagraph (b) of this Section) in the office where the Designated REALTOR® holds membership, and any other offices of the firm located within the jurisdiction of this Association. (f) The annual dues of each Institute Affiliate Member shall be as established in Article II of the Bylaws of the NATIONAL ASSOCIATION OF REALTORS®. NOTE: The Institutes, Societies and Councils of the National Association shall be responsible for collecting and remitting dues to the National Association for Institute Affiliate Members ($75.00). The National Association shall credit $25.00 to the account of a local association for each Institute Affiliate Member whose office address is within the assigned territorial jurisdiction of that association, provided, however, if the office location is also within the territorial jurisdiction of a Commercial Overlay Board (COB), the $25.00 amount will be credited to the COB, unless the Institute Affiliate Member directs that the dues be distributed to the other board. The National Association shall also credit $25.00 to the account of state associations for each Institute Affiliate Member whose office address is located within the territorial jurisdiction of the state association. Local and state associations may not establish

any additional entrance, initiation fees or dues for Institute Affiliate Members, but may provide service packages to which Institute Affiliate Members may voluntarily subscribe. (Amended 1/02) (g) The dues established by the Board of Directors shall be consistent with the annual budget approved by the Board of Directors. (h) The amount of local dues will be published to members thirty (30) days in advance of billing. Section 3.Dues Payable. The Board of Directors shall have discretion to bill for local dues separately from the portion the dues allocated to C.A.R. and NAR on a calendar year basis and may bill the local dues portion on the basis of a fiscal year as determined by the Board. In such event, the due date for the dues portion allocated to C.A.R. and NAR shall be payable annually in advance of the 1st day of January, and the due date for the local dues shall be payable annually in advance on the 1st day of the new fiscal year. Dues shall be computed from the first day of the month in which a new member is notified of acceptance and shall be prorated for the remainder of the year. Any member who initiates bankruptcy proceedings may be placed on a “cash basis” from the date the bankruptcy petition is filed until one year from the date that the member has been discharged from bankruptcy. All dues or fees paid to the BAofR are nonrefundable, except for those dues returned to a terminated provisional member as provided in Article V, Section 10.

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(a) Except as provided in Article V, Section 10, dues become the property of the Association when paid and no portion is refundable after final approval of any application. (b) Any increase in annual dues assessed after January 1 by C.A.R. NAR or the Local Association, shall be due 30 days after written notification to the member of the additional assessment. Section 4. Nonpayment of Financial Obligations. (a) The Board of Directors may assess a late payment charge if dues, fees, fines, or other assessments are not paid by the due date, which late payment charge may be increased with the passage of time but in no event shall ever exceed fifty percent (50%) of the unpaid amount. (b) If dues, fees, fines, or other assessments including amounts owed to the BAofR are not paid by the due date, the nonpaying member is subject to suspension. Three (3) months after the due date, membership of the nonpaying member shall automatically terminate unless within that time the amount due is paid. Furthermore, no member shall be suspended or expelled until twenty (20) days after notice of a proposed suspension or expulsion and the reason therefore has been noticed to the member in writing, which notice may be given before or after the expiration of the one-month limit, two-month limit, or three-month limit. (c) If within ten (10) days after the mailing of a notice the member requests a hearing, the

effective date of the suspension or expulsion shall be deferred until after such hearing. The Board of Directors shall mail by regular first class mail to the member at least five (5) days prior to the hearing a notice of the time and place of the hearing. At the hearing the Board of Directors shall receive evidence from the member and may receive evidence from any other person on the issue of whether the member was delinquent in the payment of fees or charges and on the issue of whether it would be in the best interest of the Association to suspend or expel the member. (d) If the Board of Directors determines that the member was delinquent, the Board of Directors may decide, as it deems in the best interest of the Association, to suspend or expel the member, to decline to suspend or expel the member, or to decline to suspend or expel the member on condition that the member pay the delinquency on or before a specified date or pay the delinquency in specified installments on or before specified dates. The member shall be automatically suspended or expelled without further hearing if the member fails to perform such condition. (e) Any suspension or expulsion occurring after a hearing shall be effective five (5) days after notice thereof is mailed to the member, subject to the right of the Board of Directors to specify that the suspension or expulsion shall become effective upon the entry, in a suit by the BAofR for declaratory relief, of the final judgment of a Court of competent

jurisdiction declaring that the suspension or expulsion violates no rights of the member. (f) In the event the membership of a real estate licensee or certified or licensed appraiser who holds REALTOR® membership is terminated for nonpayment of BAofR dues, and the licensee or appraiser remains affiliated with the same firm, the dues obligation of the Designated REALTOR®, as set forth in this Article IX , Section 2(b), will be increased to reflect the addition of a non-member licensee or appraiser. Dues shall be calculated from the first day of the current fiscal year and are payable within thirty (30) days of the notice of termination. (g) Any member who initiates bankruptcy proceedings may be placed on a “cash basis” from the date that bankruptcy is initiated until one year from the date that the member has been discharged from bankruptcy. Section 5. Reinstatement After Termination for Nonpayment of Financial Obligations. A former member who has had his or her membership terminated for nonpayment of dues, fees, fines, or other assessments duly levied in accordance with the provisions of these Bylaws or the provisions of other Rules and Regulations of the BAofR or any of its services, departments, divisions or subsidiaries may apply for reinstatement in the manner prescribed for new applicants for membership, only after making payment in full of all accounts due as of the date of termination, and after complying with all sanctions imposed by a disciplinary panel, BAKERSFIELD ASSOCIATION OF REALTORS®

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reimbursement to the Association for any collection fees paid, together with the payment of the application fee required of new applicants; provided, however, that if the member has been expelled for non-payment of dues and if the member applies for reinstatement prior to the end of the fiscal year in which his or her expulsion occurred, said member need only pay the delinquent amount and any late charge in order to be reinstated. Section 6. Deposit. All monies received by the BAofR for any purpose shall be deposited to the credit of the BAofR in a financial institution or institutions selected by resolution of the Board of Directors. Section 7. Notice of Delinquent Dues, Fees, Fines, Assessments and Other Financial Obligations of Members. All delinquent dues, fees, fines, assessments or other financial obligations to the BAofR shall be noticed to the delinquent member in writing, setting forth the amount owed and due date.

ARTICLE X

OFFICERS AND DIRECTORS Section 1. Officers. The elected officers of the BAofR shall be President, President-Elect, Vice President, and Secretary/ Treasurer (Chief Financial Officer). The President-Elect shall automatically ascend to the presidency at the end of his or her term as President-Elect. The term of each office shall be one year from January through December. No person shall hold more than one office at the same time. The Executive Officer is the chief staff

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person of the BAofR, but is not an officer or member of the Board of Directors. Section 2. Powers and Duties of Officers. The powers and duties of the officers shall be such as their titles, by general usage, would indicate and such as may be assigned to them by the Board of Directors. It shall be the duty of the Secretary to keep the records of the Board of Directors and to carry on all necessary correspondence with NAR and C.A.R. Duties of the Secretary/ Treasurer may be accomplished through the office of the Association’s Executive Officer at the discretion of the Board of Directors. Section 3. Board of Directors. The governing body of the BAofR shall be a Board of Directors consisting of the elected officers, eight REALTOR® members of the BAofR, plus the immediate Past President. All directors including the elected officers have one vote. Directors shall be elected to serve for terms of three years, except that at organization, one-third of the elected Directors shall be elected for terms of one, two and three years, respectively, or for lesser terms as may be necessary to complete the first fiscal year. Thereafter, as many Directors shall be elected each year as are required to fill vacancies. Section 4. Limited Number of Directors from One Agency. The number of persons from the Board of Directors from any Designated REALTOR® agency shall be limited to two. In the event that an Officer/ Director transfers his or her

license to a Designated REALTOR® that has two persons currently serving on the Board of Directors, the Directors from that office will caucus within thirty (30) days to determine who will relinquish their office/directorship. Section 5. Powers and Duties of the Board of Directors. Subject to the provisions of the California Nonprofit Corporation Law and any limitations in the Articles of Incorporation or Bylaws relating to action required to be approved by the members or a majority of all the members, the activities and affairs of the BAofR shall be conducted by and all management powers shall be exercised by or under the direction of the Board of Directors. The Board of Directors may delegate the management of the activities of the BAofR to any committee so long as the ultimate direction is provided by the Board of Directors. Section 6. Election of Officers and Directors. (a) Delivery of Notices, Reports and Ballots. All notices, reports and ballots in connection with the election or removal of officer and directors may be accomplished by personal delivery, first class mail, facsimile, electronic mail or other electronic means. (b) Nomination by the Nominating Committee. At least two months before the annual election, a Nominating Committee of at least five (5) REALTOR® members shall be appointed by the President with the approval of the Board of Directors. The Nominating Committee shall select a minimum of one candidate for each office and a minimum of one candidate

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for each place to be filled on the Board of Directors. No member of the Nominating Committee may be a candidate for office or the Board of Directors. No person may be nominated for office unless they will meet all of the qualifications for the office at the beginning of the term for which they are a nominee. The report of the Nominating Committee shall be mailed to each member eligible to vote at least four weeks preceding the election. (c) Nomination by Petition. Additional candidates for the offices to be filled may be placed in nomination by petition signed by at least 25% of the REALTOR® members eligible to vote. The petition shall be filed with the Secretary at least five weeks before the election. The Secretary shall deliver notice of such additional nominations to all members eligible to vote at least four weeks before the election. (d) Election Committee. The President, with the approval of the Board of Directors, shall appoint an Election Committee of three (3) REALTOR® members to conduct the election. No member of the Election Committee may be a candidate for office or the Board of Directors. The Election Committee shall set a date on or before the annual meeting, on which the election will be held. (e) Elections. Elections shall be by ballot delivered to all REALTOR® members qualified to vote. The ballot shall contain the names of all candidates and specify the office for which each is nominated. No person may be a candidate for more than one

position whether nominated by the Nominating Committee or by petition. Ballots may be submitted by the members in the manner and by the date specified by the Election Committee. There shall be no proxy votes. The candidate receiving the most votes for the position shall be considered elected whether or not the number of REALTOR® members providing ballots would have been sufficient to constitute a quorum at a duly called membership meeting. In case of a tie vote, the issue shall be determined by lot. Section 7. Vacancies. Vacancies among the officers and the Board of Directors shall be filled by a simple majority vote of the Board of Directors until the next annual election. If an officer or director is unable to assume office after being elected, his or her seat becomes vacant and shall be filled by the Board of Directors. Section 8. Removal of Officers and Directors. In the event that an officer or director is deemed to be incapable of fulfilling the duties for which he or she is elected, but will not resign from office voluntarily, the officer or director may be removed from office under the following procedure: (a) A petition requiring the removal of an officer or director and signed by not less than one-third of the voting membership or a majority of all directors shall be filed with the President, or if the President is the subject of the petition, with the next ranking officer, and shall specifically set forth the reasons the individual is deemed to be disqualified from further service. (b) Upon receipt of the petition,

and not less than twenty-five (25) days or more than forty-five (45) days thereafter, a special meeting of the voting membership of the BAofR shall be held. The sole business of the meeting shall be to consider the charge against the officer or director, and to render a decision on such petition. (c) The special meeting shall be noticed, including the general nature of the meeting, to all voting members at least ten (10) days prior to the meeting, and shall be conducted by the President unless the President’s continued service in office is being considered at the meeting. In such case, the next ranking officer will conduct the meeting. Provided a quorum is present, a three-fourths vote of members present and voting shall be required for removal from office. Section 9. Expenditures. The Board of Directors shall administer the day to day finances of the BAofR. Unbudgeted capital expenditures in excess of $200,000 may not be made unless authorized by a majority of the BAofR members eligible to vote and present at a duly held membership meeting. However, unbudgeted expenditures required for the protection of capital assets or to respond to emergency situations may be incurred by the Board of Directors without the prior approval of the full membership of the BAofR. Capital expenditures are those expenditures for long term improvements chargeable to the capital asset account. Section 10. Annual Report. An annual report as required by California Corporations Code Section 8321 shall be prepared BAKERSFIELD ASSOCIATION OF REALTORS®

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not later than 120 days following the close of the Association’s fiscal year. The Association shall notify each member yearly of the member’s right to receive the annual report, and shall promptly cause the most recent report to be sent to any requesting member. The report shall also contain any information required by California Corporations Code Section 8322. The Board of Directors in its discretion may have the financial statements contained in such report audited or reviewed by independent accountants and the report shall be accompanied by any report thereon by such independent accountants or by a certificate from the Secretary/ Treasurer that the statements in the report were prepared without audit from the Association’s books and records.

ARTICLE XI MEETINGS

Section 1. Annual Meetings. The annual meeting of the BAofR shall be held during June of each year, the date, place and hour to be designated by the Board of Directors. Section 2. Meetings of Directors. The Board of Directors shall designate a regular time and place of meetings. Absence from three consecutive regular and/ or special meetings without an excuse deemed valid by the Board of Directors shall be construed as resignation by the absent director, and the Board of Directors may declare the office or position vacant without the need to remove the person as an officer or director pursuant to the procedure set

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forth in Section 8 of Article X of these Bylaws. Section 3. Other Meetings. Meetings of the members may be held at other times as the President or the Board of Directors may determine, or upon the written request of at least 25% of the members eligible to vote. Section 4. Notice of Meetings. Written notice of membership meetings shall be delivered personally or sent by first class mail, facsimile, electronic mail or other electronic means to the address shown on the current BAofR records of every member entitled to participate in the meeting at least twenty (20), but no more than ninety (90), calendar days preceding all meetings. The BAofR may also publish notice of membership meetings in any publication regularly sent, with the regular distribution procedure, to all members of the BAofR. If a special meeting is called, it shall be accompanied by a statement of the purpose of the meeting. Section 5. Quorum. A quorum for the transaction of business by the general membership shall consist of fifteen percent (15%) of the members eligible to vote and present at a duly held membership meeting. A quorum for the transaction of business by the Board of Directors shall consist of fifty-one percent (51%) of the Directors. Section 6. Voting of Membership. At any annual or special meeting duly called and noticed to all voting members, a membership vote on any motion or proposal shall be conducted, provided

the substance of the motion or proposal is plainly stated in the notice of the meeting. If the President, with the approval of the Board of Directors, desires to conduct voting on the motion or proposal in the absence of a quorum, such fact shall be included in the notice of the annual or special meeting. In that event, the President, with the approval of the Board of Directors, shall appoint a Voting Committee of three (3) disinterested REALTOR® members to conduct the voting. If a quorum is not present and a Voting Committee has been established to conduct the voting on the motion or proposal, those in attendance at the meeting may cast their votes by ballots at the meeting. Those not in attendance at the meeting shall cast their votes by ballot at the time and in the manner prescribed by the Voting Committee provided that all voting is completed within ten (10) business days after the meeting. In the event less than a quorum of the members eligible to vote cast a ballot, then notwithstanding anything in these bylaws to the contrary, the Board of Directors shall be entitled by majority vote to adopt the motion or proposal being voted upon by the members within thirty (30) days of conclusion of the voting. Section 7. Action without a Meeting. Any action that may be taken at any regular membership meeting or special membership meeting may be taken without a meeting if the Association distributes a written or electronic ballot to every member entitled

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to vote on the matter. Approval by written or electronic ballots shall be valid only when the number of votes cast by ballot within the time period specified equals or exceed the Quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of toes that would be required to approve such action at a meeting had the vote been taken in a face-to-face meeting.

ARTICLE XII

COMMITTEES Section 1. Standing Committees. The Association shall have the following standing committees: n Education n Finance/Long Range Planning n Membership n Equal Opportunity n Grievance n Professional Standards n Executive n Local Government Relations. The Executive Committee shall consist of the President, the immediate Past President, the President Elect, the VicePresident, and the Secretary/ Treasurer. The President shall appoint from among the REALTOR® members, subject to confirmation by the Board of Directors, the members of all other standing committees. Section 2. Other Committees. In addition to committees named in Section 1, the President shall appoint other standing or special committees as deemed necessary. Section 3. Term of Committee Appointments. Committee members shall be appointed to one year terms except that

the members of the Grievance, Finance/Long Range Planning and Professional Standards committees shall be appointed to staggered three-year terms. Section 4. Organization. All committees shall be of such size and shall have duties, functions and powers as assigned by the President or the Board of Directors except as otherwise provided in these Bylaws. Section 5. President. The President shall be an ex-officio non-voting member of all standing committees and shall be notified of their meetings. Section 6. Removal. The President shall have the power, subject to confirmation by the Board of Directors, to remove any member from a committee. Section 7. Attendance by Telephone. Members of a committee may participate in any meeting through the use of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Such participation shall be at the discretion of the President and shall constitute presence at the meeting.

ARTICLE XIII

FISCAL AND ELECTIVE YEAR Section 1. Fiscal and Elective Year. The fiscal and elective year of the BAofR shall be the fiscal year beginning July 1 and ending June 30.

ARTICLE XIV

RULES OF ORDER (REQUIRED VERBATIM ADOPTION

BY MEMBER BOARDS AND ASSOCIATIONS) Section 1. Robert’s Rules of Order. Robert’s Rules of Order, latest edition, shall be recognized as the authority governing the meetings of the BAofR, its Board of Directors, and committees, in all instances wherein its provisions do not conflict with the California Nonprofit Corporations Code or these Bylaws.

ARTICLE XV

AMENDMENTS Section 1. Amendment Upon Majority Vote of Membership. These Bylaws may be amended by: (a) a majority vote of the members present and qualified to vote at any annual or special meeting at which a quorum is present provided the substance of such proposed amendment or amendments shall be plainly stated in the call for the meeting; or (b) by written ballot if a quorum is not present at such meeting, under the procedure provided in Section 6 of Article XI. These Bylaws may be amended by the Board of Directors under the procedure provided in Section 6 of Article XI if insufficient ballots to constitute a quorum are cast by voting members. In addition, the Board of Directors may, at any regular or special meeting of the Board of Directors at which a quorum is present, approve amendments to the Bylaws which are mandated by NAR or C.A.R. policy. Section 2. Notice. Notice of all meetings of the membership at which amendments are to be considered shall be delivered BAKERSFIELD ASSOCIATION OF REALTORS®

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personally, by regular mail, facsimile, electronic mail, or other electronic means to every member eligible to vote at least twenty (20) calendar days prior to the meeting and shall plainly state the substance of the proposed amendment or amendments. Section 3. Approval of Amendments by NAR Amendments to these Bylaws affecting the admission or qualification of REALTOR® and Institute Affiliate members, the use of the terms REALTOR® and REALTORS®, or any alteration in the territorial jurisdiction of the BAofR, shall become effective upon their approval as authorized by the Board of Directors of NAR

ARTICLE XVI DISSOLUTION

(REQUIRED VERBATIM ADOPTION BY MEMBER BOARDS AND ASSOCIATIONS) Section 1. Dissolution. Upon the dissolution or winding up of affairs of this BAofR, the Board of Directors, after providing for the payment of all obligations, shall distribute any remaining assets to C.A.R. or, within its discretion, to any other non-profit tax exempt organization.

ARTICLE XVII

MULTIPLE LISTING SERVICE Section 1. Authority and Governing MLS Rules. The Association through its wholly owned subsidiary, Golden Empire MLS, Inc. (“GE MLS”) may maintain for the use of licensed real estate brokers and salespersons, and licensed or certified appraisers, a Multiple

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Listing Service (“MLS”) which shall be operated consistent with the Bylaws of the Association and the California Model MLS Rules as from time to time amended by C.A.R., which are hereby incorporated by reference and such additional local MLS Rules and Regulations as may be hereinafter adopted by the board of directors of GE MLS. In the event of a conflict between the California Model MLS Rules and the local MLS Rules and Regulations, the local MLS Rules and Regulations will control. Section 2. Purpose. A Multiple Listing Service is a means by which authorized MLS broker participants establish legal relationships with other participants by making a blanket unilateral contractual offer of compensation and cooperation to other broker participants; by which information is accumulated and disseminated to enable authorized participants to prepare appraisals and other valuations of real property; by which participants engaging in real estate appraisal contribute to common databases; and is a facility for the orderly correlation and dissemination of listing information among the participants so that they may better serve their clients and the public. Section 3. MLS Board of Directors. The Association President shall appoint, subject to the confirmation of the Association’s Board of Directors, the members of the board of directors of GE MLS which

members shall be REALTOR® members and MLS participants or subscribers. The Board of Directors of GE MLS shall select the officers of GE MLS from among the board of directors of GE MLS, and the President of the Association may be selected to also be the president of GE MLS. Section 4. Access to Comparable and Statistical Information. Providing the MLS generates such publications, members of the Association who are actively engaged in real estate brokerage, management, mortgage financing, appraising, land development or building, but who do not participate in the MLS, are nonetheless entitled to receive, by purchase or lease, information other than current listing information that is generated wholly or in part by the MLS including “comparable” information, “sold” information and statistical reports. This information is provided for the exclusive use of Association members and individuals affiliated with Association members who are also engaged in the real estate business. Except as otherwise specified in the MLS Rules and Regulations, this information may not be transmitted, retransmitted or provided in any manner to any unauthorized individual, office or firm. Association members who receive such information are subject to the applicable provisions of the MLS Rules and Regulations whether they participate in the MLS or not.

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POLICIES

BAKERSFIELD ASSOCIATION OF REALTORS® FINANCIAL MANAGEMENT Managing the financial affairs of the Bakersfield Association of REALTORS®, Inc., requires prudent management, proving maximum protection to members’ money within established guidelines. (11/03) Association to support Better Business Bureau, Chamber of Commerce, Hispanic Chamber, Kern County Farm Bureau and Kern Tax. (Classified as dues/ subscriptions) (11/03) Association to provide allocation of $5,000 from General Operating Budget for charitable contributions. (10/06) Budget expenditure limit of $2500 not requiring Board of Directors approval. (3/08) Trustees for employee pension plan to be Executive Officer and two (2) members from the Association current Executive Board, each serving a minimum of three (3) years with staggered terms.

(6/09) Pension Plan: Association / GEMLS BOD concurred assuming responsibility for the Fidelity and NextStep fees associated with the employees 401K Pension Plan, according to their established proportionate share (Assoc. 35% / 65% GEMLS). Target Wealth Management fees to continue to be the responsibility of participating employees. (12/13) The Bakersfield Association of REALTORS® (the Association) and its wholly owned subsidiary, the GEMLS share personnel, office space, utilities, equipment, supplies and other ordinary and necessary business expenses. The Association and GEMLS shall share common expenses on a fair and equitable basis. Costs of personnel shall be based on the time each personnel spends on Association and GEMLS matters. Allocations of common costs and expenses may be based on reasonable estimates and determined by and reviewed by the Strategic Planning and Finance

Committee. The Association may charge GEMLS reasonable rent on the portion or percentage of the building reasonably determined to be used by GEMLS as determined by the Strategic Planning and Finance Committee. (12/13) Annual Audit: The Association will have an outside CPA conduct an annual audit of the corporation’s finances, which may be the same CPA conducting the wholly-owned subsidiary’s, the GEMLS’ audit. ADMINISTRATION/STAFF (9/03) Staff granted 21 days of vacation after 20 years of employment. (5/05) Employee retirement contribution/allocation changed to two entry dates per year (January and July) and add “will be eligible if employee retires during the plan year”. (12/13) Adoption of Record Retention and Destruction Policy (copy attached). BAKERSFIELD ASSOCIATION OF REALTORS®

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(12/13) Software Licenses: Any software installed in the organization’s computers must have appropriate licenses. AWARDS COMMITTEE/ RECOGNITION (7/98) (7/10) Members will be able to submit nominations for Affiliate of the Year Award. One honoree will be selected by a polled vote of the Board of Directors and Committee Chairs. Award to be made to individuals, not firms. Eligible persons will be associated with Affiliate offices. Award to be announced at Inaugural. Judging based on: 50 points professional reputation, knowledge of industry and service to our clients; 30 points services and contributions made to the Association, and 20 points services and contributions to the community. (10/98) (7/10) Title of awards program to be R&S Awards. Judging of Salesperson of the year based on: 30 points service to the real estate industry, 20 points cooperation with other offices & REALTORS®, 20 points number of sales, 20 points professional reputation, 10 points service and contributions to community. Judging for REALTOR® of the year based on: 40 points professional reputation; 30 points service and contributions to organized real estate, 30 points service & contributions to community, state and nation. GOVERNANCE (2/05) Adopt amendment to Article IX of Bylaws, Dues and Assessments, regarding computation of dues for the

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Designated REALTOR® to comply with NAR mandate. Our bylaws provide that the BOD, at any regular or special meeting, may approve amendments to the bylaws which are mandated by NAR policy. (1/08) Board of Director’s agenda to provide opportunity for member comment at beginning of Board meeting. (8/10) Association Bylaws Article IX Section 3 – Dues payable amended to allow for local dues to be paid on a fiscal year basis (C.A.R. and NAR portion of the dues to continue on a calendar year basis) (8/10) Directors unanimously approved recommended policy and procedure changes to nominating process to allow for contested elections. (11/12) Conflict of Interest Policy Adopted (1/13) Board & Leadership Guidelines (including Responsibilities, Engagement) as set forth in document presented on 1/29/2013. (1/13) Confidentiality of Documents and Conversations as set forth in Bakersfield Association of REALTORS® Confidentiality Agreement. (12/13) Antitrust Compliance: The Bakersfield Association of REALTORS®, Inc. has a policy that the corporation and its members fully comply with California and United States antitrust laws. The Association will provide information to members on real estate antitrust issues on a regular basis, which will occasionally

be published in the Bakersfield Association REALTOR® Magazine. (12/13) Authority Policy: It shall be the policy of this corporation that any communications on behalf of the corporation shall be official, at the direction of the president, board or staff. No statements shall be made, either verbal or written that conflict with the position or policy of the corporation. Leadership should understand, that by virtue of their position, that statements may be perceived by the public as official and on behalf of the corporation. To control official communications, stationary and business cards shall be for the use of the elected president and staff only. Members of the board and committees may not use the corporation’s stationary. Staff will prepare letters sent on behalf of the organization with a copy remaining in the office. Exceptions may be made to the policy so long as the purpose of the letter is made known and approved by the board in advance. (12/13) Association Policy Document adopted. (3/12) Bylaws Amended: Article 10, Section 4. Limited Number of Directors from One Firm. The number of persons from the Board of Directors from any real estate brokerage firms shall be limited to two. In the vent that any Director (including and Officer) during the term of office becomes employed or affiliated as a broker, owner, or independent contractor with a real estate brokerage firm that already has two persons currently serving on the Board of Directors, then the three directors from that

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firm shall meet and determine which of the three shall resign as a Director within thirty (30) days of the disqualifying event. If one of the three directors fails to resign within the thirty day period, then the office of the director who changed firms shall be declared vacant and the replacement director shall be appointed as provided in Section 7 of this article III. For purposes of this Section 4, all real estate brokerage firms with separate office locations which either (a) engage in joint marketing activities with respect to agents and/or listings, (b) jointly recruit agents, and/or (c) do not compete against one another in the same manner as independent firms, shall be treated as a single real estate brokerage firm even if the two firms are separate legal entities and/or have different Designated REALTORS®. REALTOR® GOVERNMENT RELATIONS (RGR) (10/12) 2013 NAR Golden “R” Renewal in the amount of $2000, regardless of level of recognition received. (Golden R renewal is $5000; Sterling R is $1000). (2009 Association became NAR Golden “R” at initial level of $5000 with $2000 annual renewal.) (6/16) Crystal R Renewal, $2,500 MEMBERSHIP (12/01) Association to discontinue selling real estate forms to the public. (4/04) Association to open on Monday mornings at 9 a.m. to allow for one-hour staff meeting. (9/08) Dues billing to include

REALTOR® RAF fair share and Housing Affordability Fund above the line. January 10 late fee held over to end of month, at which time, $150 late fee to be assessed for unpaid dues. (2/09) Effective with 2011 dues billing cycle, the Association will recover from our members, a late fee assessed by C.A.R. for late payment of the C.A.R. dues. (1/08) Upon member’s cancellation of membership for non-payment, if reinstated within one (1) year’s time, a fee of $100 for local and $150 for NAR/ C.A.R. will be assessed. If a member’s dues are not paid by January 31, of any given year, the licensee’s status will be changed to nonmember sales and the broker will be assessed the required fees. Broker will have 30 days to pay outstanding non-member sales fees or return their license. If correction is not completed within 30 days, office will be subject to suspension until in compliance with Association bylaws. GRIEVANCE/PROFESSIONAL STANDARDS (12/02) Association to continue sending notice of ethics/ arbitration complaints against salespersons to their current Designated REALTORS®. (9/04) Establish cooperative agreements with neighboring association(s) (Fresno/Tulare, Antelope Valley, Tehachapi and Lake Isabella) and be bound to and to enforce any disciplinary action rendered against one of our members by the association that agrees to cooperate. If legal expense incurred, the association

whose member(s) are involved in the complaint would need to reimburse the cooperating association. (12/09) Request for Hearing Continuance assessment increased to $500 for second request. (2/10) Administrative fee charged to respondent if found in violation of a Code of Ethics Article increased from $250 to $500. (06/11) If a member is found in violation of the Code of Ethics a second time within a three (3) year time period, the member’s name, the fact that the member has been found in violation of the Code of Ethics, the Article(s) violated, and the discipline imposed, shall be published in the official communication vehicle of the Association. Such publication shall not include the name of the firm the member is, or was, licensed or affiliated with. In cases where the member’s name is similar to another Association member’s or MLS Participant’s or Subscriber’s name, the member’s real estate license number or office address (or both) may also be published. (8/13) Ethics Citation Policy Adopted (8/13) Ethics Request for Review/ Rehearing increased from $250 to $500 (8/13) Arbitration Processing Fee & Request for Review increased from $250 to $500 (12/13) Ethics Citation Fine Schedule Adopted Adopted 12/3/2013 BAKERSFIELD ASSOCIATION OF REALTORS®

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NOTES

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CITATION POLICY

BAKERSFIELD ASSOCIATION OF REALTORS As REALTORS®, in 2013 we had the privilege of celebrating the Centennial Celebration of the adoption of the NAR Code of Ethics. There has never been or may never be a greater opportunity to bring awareness and strive to improve the professionalism of our REALTORS®. — Linda Jay, CEO Code of Ethics Citation Policy Established January 1, 2014. When a Bakersfield Association REALTOR® is charged with violating certain articles of the Code of Ethics, he/she will have the option of accepting a citation rather than go through the traditional professional standards hearing process. Here are answers to some of the most common questions about the citation policy. Why was the citation policy adopted? In April of 2013 the Association’s leadership team adopted a new Strategic Plan for 2013 – 2017 to guide our Association’s successive

volunteer leaders, committees and professional staff. Key elements of the plan include a statement of purpose for the Association and a newly adopted vision statement establishing the long term outcome of how the Association should be perceived, which states: “Improving the real estate industry through professionalism and service.” Five goals were established as our core competencies. The first and most important of the five goals is to Educate our members with regard to professionalism and standards. In keeping with that goal and commitment, a combined leadership task force of the Association’s Professional Standards Committee, Grievance Committee, Ombudsman Joe Newton, then President David Knoeb, CEO Linda Jay and Professional Standards Administrators Claudia Bugarin and Karen Huffman, reviewed this model policy and recommended its adoption. This special task force

identified several benefits: 1) Faster resolution for complaints of lesser severity that can be substantiated with documented evidence, completing a process that often takes six months in less than 30 days; 2) Savings of money, Association resources and volunteer time by Bakersfield REALTORS®; 3) Improved compliance with the Code of Ethics. Are all ethics charges eligible for the citation program? No, only those charges relating to specific articles of the Code that can be substantiated with written or otherdocumented evidence, such as a print advertisement that violates Article 12 of the Code. Which articles of the Code are covered by the citation policy? Articles 3, 4, 5, 6, 12, 14, and 16. Can a Bakersfield REALTOR® fight a citation? The respondent has the option of accepting the citation or requesting the full due process BAKERSFIELD ASSOCIATION OF REALTORS®

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of a professional standards hearing. What if a Bakersfield REALTOR® ignores a citation? If the respondent does not reply to the citation within 10 days, respondent will be sent a letter of warning that the matter will be forwarded for full Ethics hearing if no response is received within 10 more days. Failure to respond to citation within 20 days from date of citation automatically results in full ethics hearing , which opens up the possibility of any allowable sanction(s) determined by the hearing panel. Who can file a complaint? Anyone. Anonymous complaints can be filed if the potential violation involves an article identified in the citation program. Why are anonymous complaints allowed? A complaint must be substantiated with documentation; otherwise, it is not eligible for a citation. Anonymous complaints allow Bakersfield REALTORS® to file complaints that pertain to the citation policy without the fear of retribution by a competitor. What happens to an anonymous complaint if the respondent does not accept the citation? The matter proceeds through the traditional professional standards process. If the grievance committee decides the complaint has merit, a grievance tribunal becomes the complainant. If there is no convincing evidence of a violation, the grievance committee will dismiss the complaint. What happens if the respondent accepts the citation?

BAKERSFIELD ASSOCIATION OF REALTORS®

A first offense carries a fine of $300. The respondent also must complete a live ethics training within 60 days. (optional: for first offence, fine may be refunded once ethics training has been completed.) The fine for a second offense is $600 and for a third offense is $900. After three citations within a 36-month period, all further complaints automatically go to a hearing. What is the fine if multiple articles have been cited in the complaint? The fine is the same regardless of the number of articles cited in the complaint. For example, if it’s a first citation and it includes violations of two articles of the Code covered by the citation policy, the fine is still $300. What if the complaint contains one charge related to an article covered by the citation policy and one charge that isn’t? To be eligible for a citation, all charges on a complaint must apply to the citation policy. If not, the complaint goes through the regular professional standards process. Can a REALTOR® receive a Code of Ethics citation if he has received an MLS citation for the same event and conduct? No. It is the responsibility of the person receiving the Code of Ethics citation to demonstrate to the association that he has already paid a fine to the MLS for the same event and conduct. WHAT PARTS OF THE CODE ARE ELIGIBLE FOR A CITATION? Article 3 Failure to disclose existence of dual or variable rate commission.

Failure to disclose existence of accepted offers to cooperating brokers. Article 4 Failure to disclose REALTOR® interest in property being bought or sold. Article 5 Providing professional service without disclosing interest in property. Article 6 Accepting any commission, rebate, or profit on expenditures without client’s knowledge or consent. Article 12 Failure to present a true picture in real estate communications and advertising. Failure to disclose professional status in advertising and other representations. Failure to disclose compensation from a third party for services provided free to a client. Advertisement offering to sell/lease property without authority of owner or listing broker. Failure to disclose name of firm in advertisement for listed property. Failure to disclose status as both owner/landlord and REALTOR® or licensee when advertising property in which REALTOR® has ownership interest. Falsely claiming to have “sold” property. Registration or use of deceptive URL or domain name. Article 14 Failure to cooperate in any professional standards proceeding or investigation. Article 16 Use of terms of an offer to modify listing broker’s offer of compensation. Placement of for sale/lease sign on property without permission of seller/landlord

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VISION 2020 STRATEGIC PLAN 2017-2020 Mid-year progress report as of July 2018

what it offers. The vision is an aspirational statement. The values are guiding principles of the organization.

Mission, Vision and Value Statements The mission or statement of purpose identifies the organization, who it serves and

Strategic Plan 2017 - 2020 The newly adopted plan spans the period of 2017 to 2020, guiding successive volunteer leaders, committees and professional staff. n Purpose – Statement of purpose for the Association. n Vision – The long-term outcome of how the Association should be perceived. n Values – Guiding principles for the leadership and staff. n Goals – The core competencies of the Association to which sufficient resources will be allocated. n Strategies – Approaches and programs to advance the goals. n Tactics – Performance measures, assignments and deadlines to get the work done. (These are most likely identified and tracked in an annual program of work.) Vision Statement Improving the real estate industry through professionalism and service. Statement of Purpose The Bakersfield Association of REALTORS® is the leading advocate for Real Estate, our Members, and the Community we serve. Tagline Growing a Stronger Community Values Statement

ounded in 1905, the Bakersfield Association of REALTORS® is a dynamic Association with a dedicated volunteer leadership and a membership of approximately 2,000. The Bakersfield Association of REALTORS® supports its members by providing critical resources, promoting a better quality of life in our community, encouraging and protecting private property rights. The objective of the Association is to promote and maintain high standards of conduct in the real estate profession as expressed in the Code of Ethics. The leadership team of the Bakersfield Association of REALTORS® and GEMLS met on February 23, 2016 to review and update the strategic plan. The previous plan was adopted in 2013 and has effectively guided the Association with continued success and growth. The Bakersfield Association of REALTORS® is a model for strategic plan deployment, as oversight officers take responsibility for each core competency and committees are aligned to carry out these strategies. Discussions at last year’s mid-year review focused less on “change” and more on “enhancement.”

n Excellence – The highest professional and ethical standards will govern our work and our relationships with others. n Leadership – A commitment to provide a positive and effective influence within our professional and regional community. n Diversity – A respect for serving members representing all cultures and business models. n Collaboration – A commitment to working with other organizations as a trusted and supportive community partner to benefit our member/stakeholders. n Innovation – We will continually explore new avenues to provide better service to our members. Our Goals and Strategies Five goals were established as the core competencies of the Association for which resources will be allocated. The five goals set in 2013 were re-affirmed, with new and continued strategies recommended. Three of the goals are primary purposes, while two of the goals are the foundation that supports Advocacy, Education and Service. I. EDUCATE — Standards of Professionalism: Maintaining REALTOR® ethics and standards through education and knowledge. II. ENGAGE — Member Service and Value: Serving the needs of members by providing programs, products and services that positively impact professional success. BAKERSFIELD ASSOCIATION OF REALTORS®

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III. LEAD — Association Leadership and Operations: Leading a state and nationally acclaimed REALTORS® Association.

B. Enhanced competence and

Know? C.A.R./Association Posts

knowledge through education

violators on website/publications.

and training.

D. Deliver timely, relevant

IV. ADVOCATE — Government Relations and the Voice of Real Estate: Vigilant in monitoring and influencing issues impacting real

for training & education

estate.

u Earned designations (eg:

V. SERVE — Community Service: Positively impacting our community through goodwill and campaigns led by REALTORS®. Strategies to Advance the Plan Strategies are programs and priorities to achieve the goals and advance the mission. The strategies suggested are indicated in the following pages with each goal and the main subject.

I. EDUCATE

STANDARDS OF PROFESSIONALISM: Maintaining the REALTOR® ethics and standards through education and knowledge. A. Increase compliance with the Code of Ethics. n On Track – 80|20|0 n Clear, concise information to the members – CE classes meeting NAR Code of Ethics Biennial requirements n Broker Involvement/support and accountability of agents

n On Track – 79|21|0 n Offering multiple opportunities n Increased Broker engagement/ support

BAKERSFIELD ASSOCIATION OF REALTORS®

professional excellence. Deliver timely, relevant programs n Needs attention - 41|59|0 n For membership – on track

n Increased Incentivization:

n For consumer – *Could do better!*

BPro, GRI) u New members – free basic contract/disclosure classes if completed within first 6

u Statistics, call to action, social media E. Enhance educational offerings by investing in

months u If new member completes required classes, they are

strategic speakers. n On Track – 82|18|0 n Members – Gov Hutchinson

given an opportunity to attend Legislative day ($148 still required)

and Leslie Appleton-Young, etc. n Local Experts – Spotlight at events

u Recognition of agents at Association events, etc., completing various levels of education/classes u Offering of free Inaugural Tickets.

n Consumers – “Build a Better Board, commercial construction F. Create a Leadership Academy and mentoring model. n On Track – 95|05|0 n Maintain well established

C. Promote the benefits of

program with timely periodic

ethical practice.

updates

n On Track – 61|39|0

n Recognize Leadership Academy

n Effectively Communicate to

more throughout the year at

Consumers – Telling our story

various events.

n Proactively promote REALTOR

G. Maintain a centralized

Brand

on-line resource to promote

n Demonstrate value of investing

educational programs.

in education

n Needs Attention – 0|83|17

u Career Excellence

n Promote website (vs. direct

u Advance your knowledge

u Provides confidence

page containing important

n Build member awareness of

member information on website

lack of ethical practice: Did You

cannot be circumvented)

LEGEND n On Track n Needs attention n Off Track

programs to support

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II. ENGAGE

MEMBER SERVICE AND VALUE: Serving the needs of members by providing programs, products and services that positively impact professional success. A. Provide a superior membership experience for all members. n On Track – 81|19|0 B. Maintain productive and responsive relationships within the industry, including brokers, agents and affiliated organizations. n Needs Attention – 24|76|0 n Utilize CPR to develop a strategy and follow through. n Continue to strengthen relationships with community leaders. n Include Instagram in communications n Promote committee events through livestream C. Update and expand programs, products and services to meet the demands of an evolving marketplace and provide value. n Needs Attention – 0|100|0 D. Set growth metrics to monitor recruitment, retention and marketshare; focus on quality over quantity growth initiatives. n On Track – 89|11|0 n Note: Membership numbers of 2000 and above create greater director/leadership opportunities at State and National level. n Obtain better analytics from membership questionnaires.

E. Develop forums and advisory groups to engage the varied interests of members, transforming their discussions into educational content as applicable. n Needs Attention – 27|73|0 n Chairs and vice-chairs more proactive with recruiting colleagues to join their committee. F. Promote available resources and value of C.A.R. and NAR. n Needs Attention – 27|40|33 n Utilize CPR to develop strategy for delivery of promoting additional benefits G. Identify and build relations with allied organizations, i.e. property management, commercial brokers, new constructions as well as geographic opportunities (for statistical gathering.) n Needs Attention – 0|69|31 n Do a better job of telling our story n Develop library of videos promoting committees and what they do. n Send personal/in-person invites. n Utilize buddy program to engage new member participation.

III. LEAD

ASSOCIATION LEADERSHIP AND OPERATIONS: – Leading a state and nationally acclaimed REALTORS® Association. A. Maintain efficient programs and best use of resources to

serve the members and advance the mission. n On Track – 50|50|0 B. Rely on metrics and performance measures to monitor strategic plan progress. n On Track – 100|0|0 C. Invest in the Association office to maintain a sense of professional pride; explore investing in additional parking and classroom space to accommodate growth. n Needs Attention – 47|53|0 n Continue efforts. D. Position REALTORS® in volunteer leadership roles who have completed the Leadership Academy and other paths to leadership. n Needs Attention – 79|21|0 n Nearly all Leadership Academy members to date have been placed in leadership roles. n Additional items listed under Advocate E. Invest in the technology necessary to support Association functions. n On Track – 56|44|0 n Suggest Association purchase green screen/videography/ photobooth equipment for member use ‘on site’ at the Association to create market materials for their business. F. Maintain professional staffing sufficient to support Association growth and advancement of the strategic plan. n On Track – 100|0|0

LEGEND n On Track n Needs attention n Off Track BAKERSFIELD ASSOCIATION OF REALTORS®

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G. Align committees with strategic plan to produce significant results. n On Track – 64|36|0 n Increase membership participation through various methods n Develop library of videos promoting committees and what they do. n Send personal/in-person invites. n Utilize buddy program for committee members to invite new members to participate H. Grievance and Professional Standards (new). n Grievance and Professional Standards Committee to play an enhanced advisory role to SPF with regard to recommending practical/situational educational courses (perhaps quarterly) targeted at improving ethical practices. n Increase members’ awareness of Code of Ethics Citation program. n Association sent three REALTOR® members to C.A.R. sponsored Pepperdine University Mediation Classes to prepare them to assist with Association Mandated Mediation. Continue identifying members to assist with mediation/ombudsman services.

IV. ADVOCATE

GOVERNMENT RELATIONS AND THE VOICE OF REAL ESTATE: Vigilant in monitoring and influencing issues impacting real estate. A. Maintain policy platforms that correspond with the strategic

plan on issues impacting our industry. n Needs Attention – 27|73|0 n Policy platforms reviewed and updated 6/2018 to conform with NAR/C.A.R. Policies. B. Lead coalition efforts with industry partners. n Needs Attention – 22|78|0 n Organized community coalition to successfully revoke PACE at County and City levels. n Continue to strengthen relationships with community leaders. n Increase in Association leadership participation. C. Support RPAC, “The voice and muscle of the REALTOR®” n Needs Attention – 22|78|0 n Increase RPAC Contributions – Develop a business plan for RPAC Fundraising. n Continue to conduct phone banks to increase awareness/ contributions. n In conjunction with CPR Committee, develop strategies and build membership awareness of: v Political “wins” (e.g. PACE) to demonstrate value and importance of contributing. v Opportunities to be a valued resource to community and provide REALTOR® brand exposure/ v Recognize contributors at Association events. n Strengthen ‘Calls to Action’. n Modify Dues billing statements to include all levels of political contributions n Include payment plan option. n C.A.R. RAF flyer distributed to members listing contribution levels and payment options.

LEGEND n On Track n Needs attention n Off Track

BAKERSFIELD ASSOCIATION OF REALTORS®

D. Increase awareness and grassroots involvement of members. n Needs attention - 0|75|25 n Identify and equip members to be REALTOR® Brand/Advocate Ambassadors. n Identify new leaders to train for involvement in community leadership/conversations and roundtables. E. Allocate sufficient resources to support an effective government affairs program. n Needs attention - 20|80|0 n Association allocates funds yearly as a budgeted line item to support our contracted Government Affairs Director (GAD). n Manages PAC funds available to our Association via our members’ REALTOR® Action Fund contributions to ensure effective public relations with local, state and federal elected officials. n Provides funding for GAD to provide presence and support at State and National governance meetings. n GAD coordinates efforts with Local Candidate Recommendations Committee to interview and make recommendation to the Association BOD with regard to supporting local candidates who are REALTOR® Champions. n GAD works closely with REALTOR® Government Review Advisory Council to review Issues arising that can negatively impact or strengthen our business and private property rights, to ensure swift and effective action is recommended and implemented.

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F. Enhance involvement as a leader and stakeholder in economic development and local public policy. n Needs attention - 8|83|8 n Enhance awareness of members’ opportunity to serve in an advisory role to government agencies and organizations, providing facts and data to assist in their legislative efforts to create sound policies for economic development and public policy. n Allocate sufficient resources to improve visibility and brand awareness in community. G. Be cognizant of resources from C.A.R. and NAR that can be used to support local advocacy. n Needs attention - 0|62|38 H. Consider feasibility of developing a task force or coalition of members dedicated to advancing public policy programs, working within approved messaging and channels of communication. n Needs attention - 0|25|75 n Work with CPR to develop as appropriate. I. Include a module on “advocacy and government relations” in the training of future leaders. n On Track – 31|23|46 n Module already included in Leadership Academy and other leadership training.

V. SERVE

COMMUNITY SERVICE: Positively impact our community through goodwill and campaigns lead by REALTORS®.

A. Position REALTORS® as a positive force in the community; and a means to engage members. n On Track – 54|46|0 n Do a better job of telling our story. n Celebrate our accomplishments n Work with CPR to develop strategy for effective communication campaign B. Evaluate and strategically coordinate fundraising efforts and philanthropic giving, being sure to allocate overhead costs appropriately. n On Track – 89|11|0 n Add Charitable Foundation donation option to dues billing n In progress. To be addressed in BARCF Strategic Plan C. Develop a strategic plan for the Bakersfield Association of REALTORS® Foundation that will advance member awareness and raise adequate funds. n Needs Attention – 20|70|10 n In progress. D. Provide scholarships for students pursuing a course of study in real estate or a related field at college or graduate levels. n To be re-evaluated under BARCF E. Rely on open channels of communications (e.g. suggestion box, social media, etc.). n Needs Attention – 38|63|0 n Do a better job of telling our story. n Video thank you to all sponsors F. Boys & Girls Club

n Educating public – do a better job of telling our story n Helping workforce G. Sally’s Place n Low on funding n Need more engagement – help n Ask for funding necessary for year v Live video from Sally’s place v Shout out on regular basis v Break up work time v Placemats with REALTOR® on it H. Golf n REALTORS® name always out in front I. Campout Against Cancer v needs help with fundraising v Own networking from chair (notifications, e-mails should come from chair not association)

Statement of Purpose The Bakersfield Association of REALTORS® is the leading advocate of the Real Estate Industry, its Members, and the community we serve.

Vision Statement Improving the real estate industry through professionalism and service.

Our Values Proposition n Ethical

and Honest Standards of Professionalism n Proven Leadership n Driven by Mission, Vision and Values n Inclusive and Diverse n Decisive for Benefit of Members n Effective Industry Voice n Trusted and Supportive Community Partner

LEGEND n On Track n Needs attention n Off Track BAKERSFIELD ASSOCIATION OF REALTORS®

2017-2020 Strategic Plan/Goals

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I. EDUCATE

II. ENGAGE

III. LEAD

IV. ADVOCATE

V. SERVE

2019 Oversight Executive

Scott Knoeb

Ronda Newport

Professionalism and Standards

Member Service and Value

GOAL 1 #

Maintaining REALTOR® ethics and standards through education and knowledge.

A. Increase compliance with the Code of Ethics. B. Enhance competence and knowledge through education and training.

C. Promote the benefits of ethical practice. D. Deliver timely, relevant programs to support professional excellence.

E. Enhance educational offerings by investing in strategic speakers. F. Create a Leadership Academy and mentoring model.

G. Maintain a centralized online resource to promote educational programs.

OVERSIGHT EXECUTIVE ROLE: n To provide watchful and responsible care of the work being done by the various committees within their strategic goal category. n The Oversight Officer is a resource for the Chair and Vice Chair of their committees, advocates on their behalf to the Board of Directors and provides direction and performance tracking to ensure the prescribed policies and procedures are carried out for the benefit of our members and community. *Scholarship Trustees

GOAL #2

Serving the needs of members by providing programs, products and services that positively impact professional success. A. Provide a superior membership experience for all members. B. Maintain productive and responsive relationships within the industry, including brokers, agents and affiliated organizations. C. Expand and provide relevant and high quality programs, products and services to meet the demands of an evolving marketplace. D. Set growth metrics to monitor recruitment, retention and market share; focus on quality over quantity growth initiatives. E. Develop forums and advisory groups to engage the varied interests of members, transforming their discussions into educational content as applicable. F. Promote available resources and value of C.A.R. and NAR. G. Identify and build relations with allied organizations, i.e. property management, commercial brokers, new construction as well as geographic opportunities (for statistical gathering.)

NOTE: DC = Director Coordinator SL = Staff Liaison

BAKERSFIELD ASSOCIATION OF REALTORS®

Wayland Louie

GOAL #3

Association Leadership and Operations

Leading a state and nationally acclaimed REALTORS® Association.

A. Maintain efficient programs and best use of resources to serve the members and advance the mission. B. Rely on metrics and performance measures to monitor strategic plan progress. C. Invest in the Association office to maintain a sense of professional pride; explore investing in additional parking and classroom space to accommodate growth.

D. Position REALTORS® in volunteer leadership roles who have completed the Leadership Academy and other paths to leadership. E. Invest in the technology necessary to support Association functions.

F. Maintain professional staffing sufficient to support Association growth and advancement of the strategic plan. G. Align committees with strategic plan to produce significant results.

Athena Collup

GOAL #4

Governmental Relations and the Voice of Real Estate

Vigilant in monitoring and influencing issues impacting real estate.

A. Maintain policy platforms that correspond with the strategic plan on issues impacting our industry.

B. Lead coalition efforts with industry partners. C. Support RPAC, “The voice and muscle of the REALTOR®” D. Increase awareness and grassroots involvement of members.

E. Allocate sufficient resources to support an effective government affairs program. F. Enhance involvement as a leader and stakeholder in economic development and local public policy.

G. Educate membership to be Ambassadors in the community and to increase the REALTOR® brand awareness. H. Be cognizant of resources from C.A.R. and NAR that can be used to support local advocacy.

I. Consider feasibility of developing a task force or coalition of members dedicated to advancing public policy programs, working within approved messaging and channels of communication. J. Include a module on “advocacy and government relations” in the training of future leaders.

Derek Sprague

GOAL #5

Community Service

Positively impact our community through goodwill and campaigns lead by REALTORS®.

A. Position REALTORS® as a positive force in the community; and a means to engage members. B. Evaluate and strategically coordinate fund raising efforts and philanthropic giving, being sure to allocate overhead costs appropriately. C. Develop a strategic plan for the Bakersfield Association of REALTORS® Foundation that will advance member awareness and raise adequate funds.

D. Provide scholarships for students pursuing a course of study in real estate or a related field at college or graduate levels. E. Maintain the integrity and innovation of the MLS. F. Rely on open channels of communications (i.e. suggestion box, social media, etc.).

2019 Committee/Task Force Chart

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Athena Collup 2019 President

Strategic Goals

I. EDUCATE

II. ENGAGE

III. LEAD

IV. ADVOCATE

Wayland Louie

Athena Collup

2019 Oversight Executive

Vice President

President Elect

Secretary Treasurer

Scott Knoeb

Ronda Newport

V. SERVE

2019 Oversight Executive

President

Immediate Past President

Derek Sprague

Strategic Alliances n Affiliates DL: Kym Plivelich Chair: Deana Witwer Vice-Chair: Suzi Beaty SL: Meghan Cooper

n Grievance Chair: Faby Dees Vice-Chair: Kathy Kotsiomitis SL: Claudia Bugarin & Linda Jay

n Commercial Investment DL: Bill Mell Chair: Clint Bear Vice-Chair: TBD SL: Claudia Bugarin

n Attendance & Reception DL: Martha Johnson Co-Chair: Martha Johnson Co-Chair: Shari George SL: Cindy Kiser & Marrisa Williams

n Leadership Academy Dark in 2019

n Diversity & Equal Opportunity DL: Glenn Porter Chair: Glenn Porter Vice-Chair: Loren Hall SL: Claudia Bugarin

n Brokers Advisory Group DL: Brian Tuttle Chair: Saul Bernal Vice-Chair: Frank Abbot SL: Linda Jay

n Professional Standards Chair: Traci Garza Vice-Chair: Frank Abbot SL: Claudia Bugarin & Linda Jay

n Membership/ Orientation (Includes Career Booster) DL: Brian Tuttle Chair: Jenny Magana Vice-Chair: John Houchin SL: Linda Marie Curutchague

n Brokers Forum DL: Bill Mell Chair: Vali Nemetz Vice-Chair: Bill Mell SL: Linda Jay

n REALTOR® & Salesperson of the Year DL: Derek Sprague Chair: Derek Sprague Vice-Chair: Pam Epps SL: Linda Jay & Claudia Bugarin

n Education Advisory DL: Scott Knoeb Chair: Scott Knoeb Vice-Chair: Carrie Williams SL: Linda Jay & Cindy Kiser

n Technology DL: Anna Albiar Co-Chair: AJ Bhuee Co-Chair: Anna Albiar SL: Jamey Lyster OVERSIGHT EXECUTIVE ROLE: n To provide watchful and responsible care of the work being done by the various committees within their strategic goal category. n The Oversight Officer is a resource for the Chair and Vice Chair of their committees, advocates on their behalf to the Board of Directors and provides direction and performance tracking to ensure the prescribed policies and procedures are carried out for the benefit of our members and community. *Scholarship Trustees NOTE: DC = Director Coordinator SL = Staff Liaison

n Communications & Public Relations (CPR) DL: Derek Sprague Chair: Derek Sprague Co-Vice Chair: Ronda Newport Co-Vice Chair: Kyle Lawson SL: Linda Jay, Carol Duran & Kim Schaefer n MLS Open Forum DL: Glenn Porter Chair: Vanessa Hartwig Vice-Chair: Kyle Lawson SL: Jamey Lyster n YPN Chair: Michelle Valverde Vice-Chair: Ryan Dobbs SL: Marrisa Williams n WCR President Jenny Magana

n Nominating DL: Derek Sprague Chair: Derek Sprague SL: Linda Jay

n Strategic Planning/Finance DL: Wayland Louie Chair: Wayland Louie Vice-Chair: Scott Knoeb SL: Linda Jay n C.A.R. Directors Athena Collup Ronda Newport Scott Knoeb Derek Sprague Jeanne Radsick David Knoeb Sheri Anthes Theresa Olson Midge Jimerson

n LCRC DL: Wayland Louie Chair: Wayland Louie SL: Kim Schaefer n REALTOR® Government Review Advisory Council (RGR) DL: Scott Knoeb Chair: David Knoeb Vice-Chair: Sheri Anthes SL: Kim Schaefer

*REALTORS® CARE n Bakersfield Association of REALTORS® Charitable Foundation Inc. [BARCF-501(c)(3)] DL: Derek Sprague President: Derek Sprague SL: Linda Jay n Boys & Girls Club DL: Wayland Louie Chair: William Chicas SL: Claudia Bugarin & Marrisa Williams n Sally’s Place DL: Wayland Louie Chair: Cheri Romero Vice-Chair: Lisa Hook-Estes SL: Claudia Bugarin n Golf Tournament DL: Michele Cooper Chair: Walt Newport Vice-Chair: Nick Megazzi SL: Linda Marie Curutchague n Bringing Home the Cure: v Campout Against Cancer v Relay for Life v Wine Tasting Event DL: Kym Plivelich Chair: Kym Plivelich Vice-Chair: Tammi Jo Marchand SL: Cindy Kiser n Scholarship Trustees SL: Claudia Bugarin & Linda Jay

n NAR Directors Jeanne Radsick Derek Sprague n YPN Advisory DL: Athena Collup Chair: Michelle Valverde Vice-Chair: Ryan Dobbs SL: Marrisa Williams BAKERSFIELD ASSOCIATION OF REALTORS®

2019

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Committees and Leaders

EDUCATE

EDUCATION ADVISORY Serves members by providing, promoting and developing timely, high-quality educational opportunities for members. Provides courses that will assist members in maximizing their ability to successfully conduct their individual businesses. Chair: Scott Knoeb Vice-Chair: Carrie Williams COMMERCIAL INVESTMENT Plans and organizes monthly Commercial Investment meetings, including pitch sessions and educational speakers geared towards commercial and industrial real estate. Chair: Clint Bear Vice-Chair: TBD

BAKERSFIELD ASSOCIATION OF REALTORS®

DIVERSITY & EQUAL OPPORTUNITY Identifies the challenges, opportunities and benefits of diversity and inclusiveness in our multicultural community and real estate market. Provides education and best practices for members on how they can effectively work with our diverse population and enhances awareness as to the importance of equal opportunity in housing. Chair: Glenn Porter Vice-Chair: Loren Hall MEMBERSHIP / ORIENTATION Promotes membership in the Association by presenting benefits of membership, encouraging participation, and seeking ways to enhance the value of membership. Plans and conducts orientation

sessions for new members of the Association. Chair: Jenny Magana Vice-Chair: John Houchin TECHNOLOGY Evaluates and advises with respect to available technology to enhance and promote member professionalism and efficiency. Increases the comfort and technological skill level of our members. Chair: AJ Bhuee Vice-Chair: Anna Albiar

ENGAGE

AFFILIATES Affiliate partners’ support and participation has always been a vital part of our Association’s success and membership experience.

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Chair: Deana Witwer Vice-Chair: Suzi Beaty ATTENDANCE & RECEPTION Promotes attendance at Association events. Encourages membership participation in programs and activities that enhance cooperation and harmony among all members. Assists in planning and arranging for special events. Co-Chair: Martha Johnson Co-Chair: Shari George BROKERS ADVISORY GROUP (Invitation Only). Drawing on the experience, knowledge and strategic wisdom of our Broker community, this forum is a vehicle for the sharing of ideas and perspectives in order to identify opportunities to enhance services for our Broker partners. Chair: Saul Bernal Vice-Chair: Frank Abbot BROKERS FORUM Provides a forum for dissemination of information to brokers and sales managers. Fosters communication between designated REALTORS® by setting regular, informal meetings for the purpose of sharing ideas. Provides input to the Board of Directors on industry policies and practices. Brokers and Designated Managers only. Chair: Vali Nemetz Vice-Chair: Bill Mell COMMUNICATIONS & PUBLIC RELATIONS (CPR) The CPR committee is to keep a strong pulse on our membership and our community through effective communication and feedback. Chair: Derek Sprague Co-Vice Chair: Ronda Newport

Co-Vice Chair: Kyle Lawson MLS OPEN FORUM Forum engages our MLS participants and subscribers for educational purposes, sharing of information and obtaining feedback regarding ways to improve MLS services. Chair: Vanessa Hartwig Vice-Chair: Kyle Lawson YOUNG PROFESSIONALS NETWORK (YPN) Focused on building tomorrow’s leaders by being inclusive and proactively engaging our younger REALTOR® members. Helps members excel in their careers through leadership opportunities, gaining industry knowledge, networking with their peers, and participating in community activities. Chair: Michelle Valverde Vice-Chair: Ryan Dobbs

LEAD

GRIEVANCE Analyzes complaints involving alleged violations of the Code of Ethics, membership duties or bylaws, and makes recommendations regarding disposition of said complaints. Chair: Faby Dees Vice-Chair: Kathy Kotsiomitis

of identifying, reviewing, vetting and interviewing Officer and Director Candidate applicants. Chair: Derek Sprague PROFESSIONAL STANDARDS Promotes and enforces the Code of Ethics of the National Association of REALTORS® and conducts ethics and arbitration hearings. *Note: Consists of REALTORS® with sufficient background to make informed and objective determinations. Chair: Traci Garza Vice-Chair: Frank Abbot REALTOR® & SALESPERSON OF THE YEAR We celebrate excellence with a tradition of recognizing members of our Association for their exemplary service to our Association, profession and community. Two of the four highly regarded and prestigious awards date back to 1955. Chair: Derek Sprague Vice-Chair: Pam Epps

LEADERSHIP ACADEMY (Presidential Appointment). Team of seasoned Association leaders whose objective is developing effective leaders, who create value within our Association. Dark in 2019

STRATEGIC PLANNING AND FINANCE The committee coordinates the planning and budgetary activities of the Association. It is responsible for setting the long-term direction for the Association by identifying critical issues, and ensures the strategic direction for BAK, GEMLS and BARCF are carried out in accordance with their respective Strategic Plans and NAR Core Standards. Chair: Wayland Louie Vice-Chair: Scott Knoeb

NOMINATING (Presidential Appointment). A committee of REALTOR® members specially appointed for the purpose

YPN ADVISORY A team of successful young REALTOR® professionals, plans and promotes YPN educational BAKERSFIELD ASSOCIATION OF REALTORS®

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programs and provides insights to Association leadership when requested, and offers overall directions for YPN activities. Chair: Michelle Valverde Vice-Chair: Ryan Dobbs

ADVOCATE

LCRC Our local political action committee, funded by voluntary contributions from REALTORS® to support candidates for public office who understand the importance of REALTOR® issues and who will take positions on those issues that help promote the cause of housing and private property rights. Chair: Wayland Louie REALTOR® Government Review Advisory Council (RGR) Creates a forum for members to engage in local, regional and national issues that affect our industry. Members meet to review local government policies, ordinances and programs that impact real estate transactions. They serve as advisors to the

BAKERSFIELD ASSOCIATION OF REALTORS®

Board of Directors regarding the Association’s position on issues. Chair: David Knoeb Vice-Chair: Sheri Anthes

SERVE

REALTORS® CARE BAKERSFIELD ASSOCIATION OF REALTORS® CHARITABLE FOUNDATION (BARCF) President: Derek Sprague BOYS & GIRLS CLUB Plan and promotes outreach activities to support the noble work of the Boys and Girls Club of Kern County to enable the young people of our community, especially those who need assistance the most, to reach their full potential as productive, caring and responsible citizens. Our efforts include hosting a “Launching Youth for Success” Event to encourage, inspire and challenge boys and girls as they prepare to enter college or pursue a career path. Chair: William Chicas SALLY’S PLACE A seniors hot lunch program. It’s

a partnership with the Salvation Army where volunteers prepare and serve hot meals to the elderly in our community. Chair: Cheri Romero Vice-Chair: Lisa Hook-Estes GOLF TOURNAMENT Plans, promotes and coordinates the annual REALTOR® Golf Tournament. Brings together members in a relaxed setting and environment that promotes goodwill and fellowship. Proceeds benefit local non-profit organizations. Chair: Walt Newport Vice-Chair: Nick Megazzi BRINGING HOME THE CURE n Campout Against Cancer n Relay for Life n Wine Tasting Event Each year our members come together to raise funds and awareness to save lives from cancer through the Campout Against Cancer Event and Relay For Life movement. Chair: Kym Plivelich Vice-Chair: Tammi Jo Marchand

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BYLAWS

GOLDEN EMPIRE MULTIPLE LISTING (GEMLS) ARTICLE 1.

NAME, PURPOSE, AND OFFICES Section 1.1. Name. The name of this corporation is GOLDEN EMPIRE MLS, INC. (the “Corporation”). The Corporation is a wholly owned subsidiary of the Bakersfield Association of Realtors®, Incorporated (the “Association”) Section 1.2. Primary Purpose. The primary purpose of the

corporation is to conduct a multiple listing service (“MLS”) business in the greater Bakersfield, California area and such other areas as determined by the Board of Directors of the Corporation (the “Board”). A multiple listing service is a means by which authorized participants make blanket unilateral offers of compensation to other participants (acting as subagents, buyer agents, or in other agency or non-agency capacities defined by

law); by which cooperation among participants is enhanced, by which information is accumulated and disseminated to enable authorized participants to prepare appraisals, analyses, and other valuations of real property for bona fide clients and customers; by which participants engaging in real estate appraisal contribute to common databases; and is a facility for the orderly correlation and dissemination of listing information so participants BAKERSFIELD ASSOCIATION OF REALTORS®

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may better serve their clients and the public. Entitlement to compensation is determined by the cooperating broker’s performance as procuring cause of the sale (or lease). Section 1.3. Participation and Authorized Access. A Participant is any individual who applies and is accepted by the MLS, meets and continues to meet all of the following requirements of either a Broker Participant or an Appraiser Participant as defined below in sections 1.3.1 and 1.3.2. 1.3.1. Broker Participant. A Broker Participant is a Participant who meets all of the following requirements: a. The individual or corporation, for which the individual acts as a broker/officer, holds a valid California real estate broker’s license; b. The individual is a principal, partner, corporate officer, or branch office manager acting on behalf of a principal; c. The individual or corporation for which the individual acts as a broker/officer offers and/ or accepts compensation in the capacity of a real estate broker;* d. The individual has signed a written agreement to abide by the rules and regulations of the service in force at that time and as from time to time amended; e. The individual pays all applicable MLS fees; and f. The individual has completed any required orientation program of no more than eight (8) classroom hours within thirty (30) days after access has been provided. *Note: Mere possession of a

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broker’s license is not sufficient to qualify for MLS participation. Rather, the requirement that an individual or firm “offers and/or accepts compensation” means that the Participant actively endeavors during the operation of its real estate business to list real property of the type listed on the MLS and/or to accept offers of cooperation and compensation made by listing brokers or agents in the MLS. “Actively” means on a continual and ongoing basis during the operation of the Participant’s real estate business. The “actively” requirement is not intended to preclude MLS participation by a Participant or potential Participant that operates a real estate business on a part time, seasonal, or similarly time-limited basis or that has its business interrupted by periods of relative inactivity occasioned by market conditions. Similarly, the requirement is not intended to deny MLS participation to a Participant or potential Participant who has not achieved a minimum number of transactions despite good faith efforts. Nor is it intended to permit an MLS to deny participation based on the level of service provided by the Participant or potential Participant as long as the level of service satisfies state law. The key is that the Participant or potential Participant actively endeavors to make or accept offers of cooperation and compensation with respect to properties of the type that are listed on the MLS in which participation is sought. This requirement does not permit an

MLS to deny participation to a Participant or potential Participant that operates a Virtual Office Website (“VOW”) (including a VOW that the Participant uses to refer customers to other Participants) if the Participant or potential Participant actively endeavors to make or accept offers of cooperation and compensation. An MLS may evaluate whether a Participant or potential Participant “actively endeavors during the operation of its real estate business” to “offer and/or accept compensation” only if the MLS has a reasonable basis to believe that the Participant or potential Participant is in fact not doing so. The membership requirement shall be applied on a nondiscriminatory manner to all Participants and potential Participants. 1.3.2. Appraiser Participant. An Appraiser Participant is a Participant who meets all of the following requirements: a. The individual holds a valid California Appraisers certification or license; b. The individual is a principal, partner, corporate officer, or branch office manager acting on behalf of a principal; c. The individual has signed a written agreement to abide by the rules and regulations of the service in force at that time and as from time to time amended; d. The individual pays all applicable MLS fees; and e. The individual has completed any required orientation program of no more than eight (8) classroom hours within thirty (30) days after access has been provided.

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1.3.3. Subscriber. For purpose of these Bylaws, the term “Subscriber” is any individual who meets the qualifications set forth below and applies and is accepted by the Board as a subscriber in the MLS business: (a) The individual holds either a valid California real estate salesperson’s broker’s license or a valid California real estate appraiser’s certification or license; (b) The individual is employed by or affiliated as an independent contractor with a Participant of the type of business (appraisal or real estate brokerage) that the individual is engaged in; (c) The individual has signed a written agreement to abide by the rules and regulations of the MLS in force at the time and as from time to time amended; (d) The individual pays all applicable MLS fees, fines, and/or other assessments; and (e) The individual has completed the required MLS orientation program of no more than eight (8) classroom hours within sixty (60) days after access to the MLS has been provided. 1.3.4. Rules and Regulations. The Board shall from time to time establish rules and regulations to govern the conduct of the MLS business by the Corporation, which rules and regulations shall contain provisions mandated by the California Model MLS Rules as published and amended from time to time by the California Association of Realtors® (“CAR”) as well as other rules and regulations not inconsistent therewith. The rules and regulations may be amended from

time to time with the approval of the Board; provided, however, that any changes to the rules and regulations which are mandated by CAR shall automatically be incorporated into the rules and regulations and do not require approval of the Board. All rules and regulations of the MLS, other than those mandated by CAR, and any amendments or revisions thereto, are subject to the approval by the Association. 1.3.5. No Restriction of General Purpose. Nothing in Section 1.2 and Subsections 1.23.1 through 1.23.35 shall be construed as limiting or otherwise restricting the general purpose of the Corporation as set forth in its Articles of Incorporation. Section 1.4. Offices of the Corporation. The Board of Directors of the Corporation (the “Board”) shall fix the location of the principal executive office of the Corporation at any place within or outside the State of California. If the principal executive office is located outside California and the Corporation has one or more business offices in California, the Board shall fix and designate a principal business office in California. The Board may, at any time, establish branch or subordinate offices at any place or places that the Corporation is qualified to do business.

ARTICLE 2

SHAREHOLDERS Section 2.1. Place and Conduct of Meetings. Meetings of shareholders shall be held at any place within or outside the State of California designated by the Board.

In the absence of a designation by the Board, shareholders’ meetings shall be held at the Corporation’s principal executive office. If authorized by the Board (in its sole discretion) and subject to the consent requirement in California Corporations Code § 20(b) and any guidelines and procedures adopted by the Board, shareholders not physically present in person or by proxy at a meeting of shareholders may, by electronic transmission by and to the Corporation or by electronic video screen communication, participate in a meeting of shareholders, be deemed present in person or by proxy, and vote, whether the meeting is to be held at a designated place or in whole or in part by means of electronic transmission by and to the Corporation or by electronic video screen communication. A meeting of shareholders may be conducted, in whole or in part, by electronic transmission by and to the corporation or by electronic video screen communication if: (a) The Corporation implements reasonable measures to provide shareholders (in person or by proxy) a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders; and (b) The Corporation maintains a record of the vote or action and any shareholder votes or other shareholder action is taken at the meeting by means of electronic transmission to the Corporation or electronic video screen communication. Any request by the Corporation to a shareholder under California BAKERSFIELD ASSOCIATION OF REALTORS®

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Corporations Code § 20(b) for consent to conduct a meeting of shareholders by electronic transmission must include a notice that absent consent of the shareholder, the meeting will be held at a physical location. Section 2.2. Annual Meeting. The annual meeting of shareholders shall be held each year on a date and at a time designated by the Board. The date so designated shall be within five (5) months after the end of the Corporation’s fiscal year, and within fifteen (15) months after the last annual meeting. At each annual meeting, directors shall be elected and any other proper business within the power of the shareholders may be transacted. Section 2.3. Special Meetings. A special meeting of the shareholders may be called at any time by the Board, by the chairman of the Board, by the president or vice-president, or by one or more shareholders holding shares that in the aggregate are entitled to cast ten percent (10%) or more of the votes at that meeting. If a special meeting is called by anyone other than the Board, the person or persons calling the meeting shall make a request in writing, delivered personally or sent by registered mail or by telegraphic or other facsimile transmission, to the chairman of the Board or the president, vicepresident, or secretary, specifying the time and date of the meeting (which is not less than thirty-five (35) nor more than sixty (60) days after receipt of the request) and the general nature of the business

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proposed to be transacted. Within twenty (20) days after receipt, the officer receiving the request shall cause notice to be given to the shareholders entitled to vote, in accordance with Section 2.5, stating that a meeting will be held at the time requested by the person(s) calling the meeting, and stating the general nature of the business proposed to be transacted. If notice is not given within twenty (20) days after receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph shall be construed as limiting, fixing, or affecting the time when a meeting of shareholders called by action of the Board may be held. Section 2.4. Notice of Shareholders’ Meetings. All notices of meetings of shareholders shall be sent or otherwise given in accordance with this section. 2.4.1. Time for Notice; Content. All notices of meetings shall be sent or otherwise given not fewer than ten (10) nor more than sixty (60) days before the date of the meeting. Shareholders entitled to notice shall be determined in accordance with Section 2.10. The notice shall specify the place, date, and hour of the meeting, and (i) in case of special meeting, the general nature of the business to be transacted, or (ii) in the case of the annual meeting, those matters which the Board, at the time of giving the notice, intends to present for action by the shareholders. If directors are to be elected, the notice shall include the names

of all nominees whom the Board intends, at the time of the notice, to present for election. If the meeting is to be held in whole or in part by electronic transmission, the notice shall state the means of electronic transmission by and to the Corporation or electronic video screen communication, if any, by which shareholders may participate in that meeting. The notice shall also state the general nature of any proposed action to be taken at the meeting to approve any of the following matters: (a) A transaction in which a director has a financial interest, within the meaning of section 310 of the California Corporations Code (hereinafter referred as the “Code”); (b) An amendment of the Articles of Incorporation under section 902 of the Code; (c) A reorganization under section 1201 of the Code; (d) A voluntary dissolution under section 1900 of the Code which shall acquire the approval of the Association as the Corporation’s parent; or (e) A distribution in dissolution that requires approval of the Association as the owner of all the outstanding shares under section 2007 of the Code. 2.4.2. Manner of Giving Notice. Notice of any shareholders’ meetings shall be given either personally, by first-class mail, or by telegraphic or other written communication (including telegram, facsimile, or other electronic transmission by the Corporation), charges prepaid, addressed to the shareholder at the physical or electronic address

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appearing on the Corporation’s books or given by the shareholder to the Corporation for purposes of notice. If no address appears on the Corporation’s books or has been given as specified above, notice shall be either (i) sent by first-class mail addressed to the shareholder at the Corporation’s principal executive office, or (ii) published at least once in a newspaper of general circulation in the county where the Corporation’s principal executive office is located. Notice is deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication. 2.4.3. Returned Notices. If any notice or report mailed to a shareholder at the address appearing on the Corporation’s books is returned marked to indicate that the United States Postal Service is unable to deliver the document to the shareholder at that address, all future notices or reports shall be deemed to have been duly given without further mailing if the Corporation holds the document available for the shareholder on written demand at the Corporation’s principal executive office for a period of one (1) year from the date that the notice or report was given to all other shareholders. 2.4.4. Special Rules for Electronic Notices. Notice shall not be given by electronic transmission by the Corporation after either of the following: (1) The corporation is unable to deliver two consecutive notices to the shareholder by that means, or (2) the inability to so deliver

such notices to the shareholder becomes known to the secretary, any assistant secretary, the transfer agent, or other person responsible for the giving of the notice. 2.4.5. Affidavit of Notice. An affidavit of the mailing, or other authorized means of transmitting, of any notice of shareholders’ m eeting, report, or other document sent to shareholders, may be executed by the Corporation’s secretary, assistant secretary, or a transfer agent, and shall be filed and maintained in the minute book of the Corporation. Section 2.5. Quorum. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of the shareholders shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to make less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. Section 2.6. Adjourned Meetings; Notice. Any shareholders’ meeting, annual or special, whether or not a quorum is present, may be adjourned from tim e to tim e by the vote of a majority of the shares represented at that meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at that meeting, except

as provided in Section 2.5. When any meeting of shareholders, either annual or special, is adjourned to another tim e or place, notice of the adjourned meeting need not be given if the tim e and place (or the means of electronic transmission by and to the Corporation or electronic video screen communication, if any, by which shareholders may participate) are announced at the meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is fixed, or unless the adjournment is for more than forty-five (45) days from the date set for the original meeting, in which case the Board shall set a new record date. Notice of any such adjourned meeting, if required, shall be given to each shareholder of record entitled to vote at the adjourned meeting, in accordance with Section 2.4. At any adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting. Section 2.7. Voting. The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with Section 2.10, subject to the provisions of sections 702 through 704 of the Code (relating to voting shares held by a fiduciary, in the name of a Corporation, or in joint ownership). The shareholders’ vote may be by voice vote or by ballot, provided, however, that any election for directors must be by ballot if demanded by any shareholder before the voting has begun. On any m atter other than the election of directors, any shareholder may vote part of the BAKERSFIELD ASSOCIATION OF REALTORS®

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shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the shareholder fails to specify the number of shares that the shareholder is voting affirmatively, it will be conclusively presumed that the shareholder’s approving vote is with respect to all shares that the shareholder is entitled to vote. If a quorum is present (or if a quorum has been present earlier at the meeting but some shareholders have withdrawn), the affirmative vote of a majority of the shares represented and voting, provided such shares voting affirmatively also constitute a majority of the number of shares required for a quorum, shall be the act of the shareholders unless the vote of a greater number or voting by classes is required by law or by the Articles of Incorporation. At a shareholders’ meeting at which directors are to be elected, no shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a number of votes greater than the number of votes which that shareholder would normally be entitled to cast), unless the candidates’ names have been placed in nomination before commencement of the voting and a shareholder has given notice at the m eeting, before voting has begun, of the shareholder’s intention to cumulate votes. If any shareholder has given such a notice, then all shareholders entitled to vote may cumulate their votes for candidates in nom ination, and may give one candidate a number of votes equal to the number of

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directors to be elected multiplied by the number of votes to which that shareholder’s shares are normally entitled, or distribute the shareholder’s votes on the same principal among any or all of the candidates, as the shareholder thinks fit. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected. Section 2.8. Waiver of Notice or Consent by Absent Shareholders. The transactions of any meeting of shareholders, either annual or special, however called and noticed and wherever held, shall be valid as though they were had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if each person entitled to vote who was not present in person or by proxy, either before or after the meeting, signs a written waiver of notice or a consent to holding the meeting or an approval of the minutes of the meeting. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of shareholders, except that if action is taken or proposed to be taken for approval of any of those matters specified in section 601(f) of the Code, the waiver of notice or consent is required to state the general nature of the action or proposed action. All waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. A shareholder’s attendance at a meeting also constitutes a waiver of notice of that meeting, unless

the shareholder at the beginning of the meeting objects to the transaction of any business on the ground that the meeting was not lawfully called or convened. In addition, attendance at a meeting does not constitute a waiver of any right to object to consideration of matters required by law to be included in the notice of the meeting which were not so included if that objection is expressly made at the meeting. Section 2.9. Shareholder Action by Written Consent Without a Meeting. Any action that could be taken at an annual or special m eeting of shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the actions so taken, is signed by the holders of outstanding shares having not less than the minim um number of votes that would be necessary to authorize or take that action at a meeting at which all shares are entitled to vote on that action were present and voted. Directors may be elected by written consent of the shareholders without a meeting only if the written consents of all outstanding shares entitled to vote are obtained, except that vacancies on the Board (other than vacancies created by removal) not filled by the Board may be filled by the written consent of the holders of a majority of the outstanding shares entitled to vote. All consents shall be filed with the secretary of the Corporation and shall be maintained in the corporate records. Any shareholder or other authorized person who

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has given a written consent may revoke it by a writing received by the secretary of the Corporation before written consents of the number of shares required to authorize a proposed action have been filed with the secretary. Unless the consents of all shareholders entitled to vote have been solicited in writing, prompt notice shall be given of any corporate action approved by shareholders without a meeting by less than unanimous consent, to those shareholders entitled to vote who have not consented in writing. As to approvals required by California Corporations Code [section 310 (transactions in which a director has financial interest), section 317 (indemnification of corporate agents), section 1201 (corporate reorganization), or section 2007 (certain distributions on dissolution)], notice of the approval shall be given at least ten (10) days before the consummation of any action authorized by the approval. Notice shall be given in the m anner specified in Section 2.4. Section 2.10. Record Date. For purposes of determining the shareholders entitled to receive notice of and vote at a shareholder’s meeting or give written consent to corporate action without a meeting, the Board may fix in advance a record date that is not more than sixty (60) nor less than (10) days before the date of a shareholders’ meeting, or not more than sixty (60) days before any other action. If no record date is fixed: (a) The record date for determining

shareholders entitled to receive notice of and vote at a shareholders’ meeting shall be the business day next preceding the day on which notice is given, or if notice is waived as provided in Section 2.8, the business day next preceding the day on which the meeting is held; (b) The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, if no prior action has been taken by the Board, shall be the day on which the first written consent is given; and (c) The record date for determining shareholders for any other purpose shall be set forth in Section 8.1 of these Bylaws. A determination of shareholders of record entitled to receive notice of and vote at a shareholders’ meeting shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting. However, the Board shall fix a new record date if the adjournm ent is to a date more than forty-five (45) days after the date set for the original meeting. Only shareholders of record on the Corporation’s books at the close of business on the record date shall be entitled to any of the notice and voting rights described in this Article 2 notwithstanding any transfer of shares on the Corporation’s books after the record date, except as otherwise required by law. Section 2.11. Proxies. Every person entitled to vote for directors or any other matter shall have the right to do so either

in person or by one or more agents authorized by a written proxy signed by the person and filed with the secretary of the Corporation. A proxy shall be deemed signed if the shareholder’s name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise) by the shareholder or the shareholder’s attorney in fact. A validly executed proxy that does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to the Corporation stating that the proxy is revoked, or by attendance at the meeting and voting in person by the person executing the proxy or by a subsequent proxy executed by the same person and presented at the meeting; or (ii) written notice of the death or incapacity of the maker of that proxy is received by the Corporation before the vote pursuant to that proxy is counted; provided, however, that no proxy shall be valid after the expiration of eleven (11) months from the date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of sections 705(e) and 705(f) of the Code. Section 2.12. Inspectors of Election. Before any meeting of shareholders, the Board may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors are so appointed, the chairman of the meeting BAKERSFIELD ASSOCIATION OF REALTORS®

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may, and on the request of any shareholder or a shareholder’s proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one (1) or three (3). If inspectors are appointed at a meeting on the request of one or more shareholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one (1) or three (3) inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any shareholder or a shareholder’s proxy shall, appoint a person to fill that vacancy. These inspectors shall: (a) Determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies; (b) Receive votes, ballots, or consents; (c) Hear and determine all challenges and questions in any way arising in or in connection with the right to vote; (d) Count and tabulate all votes or consents; (e) Determine when the polls shall close; (e) Determine the result; and (f) Do any other acts that may be proper to conduct the election or vote with fairness to all shareholders.

ARTICLE 3

DIRECTORS Section 3.1. Powers. Subject to the applicable provisions of

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the Code and any limitations in the Articles of Incorporation and these Bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board. W ithout prejudice to these general powers, and subject to the same limitations, the Board shall have the power to: (a) Select and remove all officers, agents, and employees of the Corporation; prescribe any powers and duties for them that are consistent with law, with the Articles of Incorporation, and with these Bylaws; fix their compensation; and require from them security for faithful service; (b) Change the principal executive office or the principal business office in the State of California from one location to another; cause the Corporation to be qualified to do business in any other state, territory, dependency, or country and conduct business within or outside the State of California; and designate any place within or outside the State of California for the holding of any shareholders’ meeting or meetings, including annual meetings; (c) Adopt, make, and use a corporate seal; prescribe the forms of certificates of stock; and alter the form of the seal and certificates; (d) Authorize the issuance of shares of stock of the Corporation on any lawful terms, in consideration of m oney paid, labor done, services actually

rendered, debts or securities canceled, or tangible or intangible property actually received; and (e) Borrow money and incur indebtedness on behalf of the Corporation, and cause to be executed and delivered for the Corporation’s purposes, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations, and other evidences of debt and securities. Section 3.2. Number of Directors. The authorized number of directors shall be twelve (12) until changed by duly adopted amendment to the Articles of Incorporation or by amendment to this bylaw adopted by the vote or written consent of a majority of the outstanding shares entitled to vote. Section 3.3. Qualification of Directors. Directors must be Participants or Subscribers to the Corporation’s MLS business. At least five (5) of the directors shall be Participants. If any duly acting director ceases to be qualified as a director, the office of that director shall be declared vacant and a replacement director shall be appointed as provided in Section 3.6. 3.3.1. Limited Number of Directors from One Firm. The number of directors from any one real estate brokerage firm shall be limited to two (2), whether elected pursuant to Section 3.4 or 3.5. In the event that any director during the term of office becomes employed or affiliated as a broker, owner, or independent contractor with a real estate brokerage firm

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that already has two persons currently serving as directors of the Corporation, then the three directors from that firm shall meet and determine which of the three shall resign as a director within thirty (30) days of the disqualifying event. In the event that a director elected pursuant to Section 3.4 is the one who resigns, then the Participant which elected said director under Section 3.4 shall designate which of the other two directors shall be the “Large Broker Director” (as defined in Section 3.4). If one of the three directors fails to resign within the thirty day period, then the office of the director who changed firms shall be declared vacant and the replacement director shall be appointed as provided in Section 3.6. Section 3.4. Election of Three Directors by Large Participants. Each Participant representing one of the three (3) largest real estate brokerage firms determined on the basis of the number or closed sides of residential sales transactions of properties listed in the Corporation’s MLS business and located in the territorial jurisdiction of the Bakersfield Association of Realtors® for the im mediate preceding calendar year shall have the right to elect one (1) of the directors and to remove such director and appoint a replacement of such director at any tim e. Such a director shall be referred to as a “Large Broker Director” and each person so elected shall be deemed to be a Participant for purposes of determining whether at least five (5) directors are Participants

under Section 3.3. W ithin thirty (30) days after the end of each calendar year, the Secretary of the Corporation shall notify each such Participant of the ability to elect a director pursuant to this Section 3.4. Such election shall be in writing signed by the Participant entitled to make the election and delivered to the Secretary of the Corporation. The term of any director elected pursuant to this Section shall be for one (1) year. 3.4.1. Failure to Appoint. If there is a failure to elect any of the three directors to be elected pursuant to this Section 3.4 within thirty (30) days after notice has been given by the Secretary to the Participants of the election rights, then any person previously elected pursuant to this Section 3.4 shall continue to act as a director unless such person is unable to or no longer qualified to act as director, in which case there shall be a vacancy in the office which shall be filled according to Section 3.6 for the remaining term of the director whose office has been vacated, which director may not be removed or replaced during that term pursuant to Section 3.4. Section 3.5. Election and Term of Office of Other Directors. The other nine (9) directors shall be elected at each annual meeting of the shareholders to hold office for the term set forth below. The normal term for the directors (other than Large Broker Directors) shall be three (3) years; provided, however, that for the initial three years following adoption of these Bylaws, there shall be three (3) directors whose term is two (2) years and three

directors whose term is only one (1) year, so that one third of the directors (other than the Large Broker Directors) are elected each year. Notwithstanding the terms set forth above, any term shall not expire until the annual meeting held concurrently with or im mediately after the scheduled expiration of the director’s term. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified. No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires. Section 3.6. Removal of Officers and Directors. In the event that an officer or director of the Corporation is deemed to be incapable of fulfilling the duties for which elected, but will not resign from office voluntarily, the officer or director may be removed from office under the following procedure: (a) A petition requiring the removal of an officer or director and signed by not less than one-third of the Participants or a majority of all directors of the Board shall be filed with the president of the Corporation, or if the president is the subject of the petition, with the next- ranking officer, and shall specifically set forth the reasons the individual is deemed to be disqualified from further service. (b) Upon receipt of the petition, and not less than twenty (20) days or more than forty-five (45) days thereafter, a special meeting of the Participants of the MLS shall BAKERSFIELD ASSOCIATION OF REALTORS®

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be held, and the sole business of the meeting shall be to consider the charge against the officer or director, and to render a decision on such petition. (c) The special meeting shall be noticed to all participants at least ten (10) days prior to the meeting, and shall be conducted by the president of the Corporation unless the president’s continued service in office is being considered at the meeting. In such case, the next- ranking officer will conduct the meeting or the hearing by the participants. Provided a quorum is present, a three-fourths vote of Participants present and voting shall be required for removal from office. (d) Any vote taken by the Participants to remove an officer or director must ultimately be confirmed by a majority vote of the directors of the shareholder(s). Notwithstanding the foregoing, the Association may remove an officer or director by a majority vote of the directors of the Association. Section 3.7. Vacancies. A vacancy in the Board shall be deemed to exist if (i) a director dies, resigns, or is removed by the shareholders or an appropriate court as provided in sections 303 or 304 of the Code; (ii) the Board declares vacant the office of a director who has been convicted of a felony or declared of unsound mind by an order of court; (iii) the authorized number of directors is increased; (iv) a director ceases to qualify as a director pursuant to Section 3.3; or (v) at any shareholders’ meeting at which one or more directors are elected, the shareholders fail to elect the

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full authorized number of directors to be voted for at that meeting. Any director may resign effective on giving written notice to the chairman of the Board, the president, the secretary, or the Board, unless the notice specifies a later effective date. If the resignation is effective at a future time, the Board may elect a successor to take office when the resignation becomes effective. Except for a vacancy caused by the removal of a director, vacancies on the Board may be filled by approval of the Board or, if the number of directors then in office is less than a quorum, by (a) the unanimous written consent of the directors then in office, (b) the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice complying with section 307 of the Code or (c) a sole remaining director; provided, however, that any such vacancy of a Large Broker Director shall be filled by election of the Participants entitled to elect the director whose office is vacant as provided in Section 3.4 except as otherwise provided in Section 3.4.1. A vacancy on the Board caused by the removal of a director (including a Large Broker Director unless removed by the person or persons entitled to elect such director under Section 3.4), may be filled only by the shareholders, except that a vacancy created when the Board declares the office of a director vacant as provided in clause (ii) of the first paragraph of this section may be filled by the Board. The shareholders may elect

a director at any time to fill a vacancy not filled by the Board. The term of office of a director elected to fill a vacancy shall run until the next annual meeting of the shareholders, and such a director shall hold office until a successor is elected or qualified. Section 3.8. Place of Meetings; Telephone Meetings. Regular meetings of the Board may be held at any place within or outside the State of California as designated from tim e to time by the Board. In absence of a designation, regular meetings shall be held at the principal executive office of the Corporation. Special meetings of the Board shall be held at any place within or outside of the State of California designated in the notice of the meeting, or if the notice does not state a place, or if there is no notice, at the principal executive office of the Corporation. Any meeting, regular or special, may be held by conference telephone, electronic video screen communication, or electronic communication by and to the Corporation. Participation in a meeting through the use of conference telephone or electronic video screen communication will constitute presence in person at the meeting as long as all directors participating in the meeting are able to hear one another. Participation through electronic transmission by or to the Corporation (other than by conference telephone and electronic video screen communication) constitutes presence in person if all directors participating can communicate with the other directors

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concurrently, and each director is provided the means of participating in all matters before the board, including, without limitation, the capacity to propose, or to interpose an objection to, a specific action to be taken by the corporation. Section 3.9. Annual Board Meeting. Immediately after each annual shareholders’ meeting, the Board shall hold a regular meeting at the same place, or at any other place that has been designated by the Board, to consider matters of organization, election of offices, and other business as desired. Notice of this meeting shall not be required unless some place other than the place of the annual shareholders’ meeting has been designated. Section 3.10. Other Regular Meetings. Other regular meetings of the Board shall be held without call at tim es to be fixed by the Board from time to time. Such regular meetings may be held without notice. Section 3.11. Special Meetings. Special meetings of the Board may be called for any purpose or purposes at any tim e by the chairm an of the Board, the president, any vice-president, the secretary, or any two (2) directors. Special meetings shall be held on four (4) days notice by mail or forty-eight (48) hours notice delivered personally or by telephone (including a voice messaging system or other system or technology designed to record and communicate messages), telegraph, or electronic transmission by the corporation.

Oral notice given personally or by telephone, or written notice given by electronic mail or facsimile, may be transmitted either to the director or to a person at the director’s office who can reasonably be expected to communicate it promptly to the director. Written notice, if used, will be addressed to each director at the address shown on the Corporation’s records. The notice need not specify the purpose of the meeting, nor need it specify the place if the meeting is to be held at the principal executive office of the Corporation.

otherwise required, need not be given to any director who (i) either before or after the meeting signs a waiver of notice or a consent to holding the m eeting without being given notice, (ii) signs an approval of the minutes of the meeting, or (iii) attends the meeting without protesting the lack of notice before or at the beginning of the meeting. W aivers of notice or consents need not specify the purpose of the meeting. All waivers, consents, and approvals of the minutes shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 3.12. Quorum. A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 3.13. Every act or decision done or made by a m ajority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, subject to the provisions of California Corporations Code section 310 (as to approval of contracts or transactions in which a director has a direct or indirect m aterial financial interest), section 311 (as to appointment of committees), and section 317(e) (as to indemnification of directors). A meeting at which a quorum is initially present may continue to transact business, notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

Section 3.14. Adjournment of Meeting. Whether or not a quorum is present, a majority of the directors present may adjourn any m eeting to another time or place. Notice of the tim e and place of resuming a meeting that has been adjourned need not be given unless the adjournm ent is for more than twenty-four (24) hours, in which case notice shall be given, before the tim e set for resuming the adjourned meeting, to the directors who were not present at the time of the adjournment. Notice need not be given in any case to directors who were present at the tim e of adjournment.

Section 3.13. Waiver of Notice. Notice of a meeting, although

Section 3.15. Action Without a Meeting. Any action required or permitted to be taken by the Board may be taken without a m eeting, if all m embers of the Board shall individually or collectively consent in writing to that action. Any action by written consent shall have the same force and effect as a unanim ous vote of the Board. All written BAKERSFIELD ASSOCIATION OF REALTORS®

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consents shall be filed with the minutes of the proceedings of the Board. Section 3.16. Fees and Compensation of Directors. Directors and members of committees of the Board may be compensated for their services, and shall be reim bursed for expenses, as fixed or determined by resolution of the Board. This section shall not be construed to preclude any director from serving the Corporation in any other capacity, as an officer, agent, employee, or otherwise, and receiving compensation for those services.

ARTICLE 4. COMMITTEES Section 4.1. Executive and Other Committees of the Board. The Board may, by resolution adopted by a majority of the authorized number of directors, designate an executive committee or one or more other committees, each consisting of two or more directors. The Board may designate one or more directors as alternate members of any committee, to replace any absent member at a committee meeting. The appointment of committee members or alternate members requires the vote of a majority of the authorized number of directors. A committee may be granted any or all of the powers and authority of the Board, to the extent provided in the resolution of the Board establishing the committee, except with respect to: (a) Approving any action for which the California Corporations Code also requires the approval of the shareholders or of the

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outstanding shares; (b) Filling vacancies on the Board or any committee of the Board; (c) Fixing directorsâ&#x20AC;&#x2122; compensation for serving on the Board or a committee of the Board; (d) Adopting, amending, or repealing these Bylaws; (e) Amending or repealing any resolution of the Board which by its express terms is not so amendable or repealable; (f) Making distributions to shareholders, except at a rate or in a periodic amount or within a price range determined by the Board; and (g) Appointing other committees of the Board or their members. Section 4.2. Meetings and Action of Committees. Meetings and action of committees shall be governed by, and held and taken in accordance with, bylaw provisions applicable to meetings and actions of the Board, with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members except that (i) the time of regular meeting of committees may be determined either by resolution of the Board or by resolution of the committee; (ii) special meetings of committees may also be called by resolution of the Board; and (iii) notice of special meetings of committees shall also be given to all alternative members who shall have the right to attend all meetings of the committee. The Board may adopt rules for the governance of any committee not inconsistent with the provisions of these Bylaws.

ARTICLE 5 OFFICERS

Section 5.1. Officers. The officers of the Corporation shall be a president, a secretary, and a chief financial officer. The Corporation may also have, at the discretion of the Board, a chairman of the Board, one or m ore vice chairman, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and such other officers as may be appointed in accordance with the provisions of Section 5.3. Any number of offices may be held by the same person. Section 5.2. Election of Officers. The officers of the Corporation, except for subordinate officers appointed in accordance with the provisions of Section 5.3, shall be chosen annually by the Board, and shall serve at the pleasure of the Board. Section 5.3. Subordinate Officers. The Board may appoint, and may empower the president to appoint, other officers as required by the business of the Corporation, whose duties shall be as provided in these Bylaws, or as determined from time to time by the Board or the president. Section 5.4. Removal and Resignation of Officers. Subject to the rights, if any, of an officer under any contract of employment, any officer m ay be removed at any tim e, with or without cause or notice, by the Board. Subordinate officers appointed by persons other than the Board under Section 5.3, may be removed at any tim e, with or without cause or notice, by the Board or by

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the officer by whom appointed. Officers may be employed for a specified term under a contract of employment if authorized by the Board; provided, however, such officers may be removed from office at any tim e under this section, and shall have no claim against the Corporation or individual officers or Board m embers because of the removal, except any right to monetary compensation to which the officer may be entitled under the contract of employment. Any officer may resign at any tim e by giving written notice to the Corporation. Resignations shall take effect on the date of receipt of the notice, unless a later tim e is specified in the notice. Unless otherwise specified in the notice, acceptance of the resignation is not necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Corporation to monetary damages under any contract of employment to which the officer is a party. Section 5.5. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or any other cause shall be filled in the manner prescribed by these Bylaws for regular election or appointment to that office. Section 5.6. Responsibilities and Duties of Officers. 5.6.1. Chairman of the Board. The board of directors may elect a chair, who will preside, if present, at Board meetings and will exercise and perform such other powers and duties as m ay be assigned from tim e to tim e by the

Board. If there is no president, the chair of the Board will in addition be the chief executive officer of the corporation, and will have the powers and duties as set forth in Subsection 5.6.3 below. 5.6.2. President. Except to the extent that the bylaws or the Board assign specific powers and duties to the chair of the board (if any), the president will be the corporation’s general manager and chief executive officer and, subject to the control of the Board, will have general supervision, direction, and control over the Corporation’s business and its officers. The managerial powers and duties of the president will include, but are not lim ited to, all the general powers and duties of managem ent usually vested in the office of president of a corporation, and the president will have other powers and duties as prescribed by the Board or the bylaws. The president will preside at all meetings of the shareholders and, in the absence of the chair of the board or if there is no chair of the board, will also preside at meetings of the Board. 5.6.3. Vice President. If desired, one or more vice presidents may be chosen by the Board in accordance with the provisions for electing officers set forth in Section 5.2. In the absence or disability of the president, the president’s duties and responsibilities will be carried out by the highest ranking available vice president if vice presidents are ranked or, if not, by a vice president designated by the Board. W hen so acting, a vice president will have all the

powers of and be subject to all the restrictions on the president. Vice presidents of the Corporation will have such other powers and perform such other duties as prescribed from tim e to tim e by the Board. the bylaws, or the president (or chair of the board if there is no president). 5.6.4. Secretary. The secretary will keep, or cause to be kept, minutes of all of the shareholders’ meetings and of all other Board meetings. If the secretary is unable to be present, the secretary or the presiding officer of the meeting will designate another person to take the minutes of the meeting. The secretary will keep, or cause to be kept, at the principal executive office or such other place as designated by the Board, a book of minutes of all meetings and actions of the shareholders, of the Board, and of committees of the Board. The minutes of each meeting will state the tim e and place the meeting was held; whether it was regular or special; if special, how it was called or authorized; the names of directors present at Board or committee meetings; the number of shares present or represented at shareholders’ meetings; an accurate account of the proceedings; and when it was adjourned. The secretary will also keep, or cause to be kept, at the principal executive office or at the office of the transfer agent or registrar, a record or duplicate record of shareholders. This record will show the names of all shareholders and their addresses, the number and classes of shares held by each, the number and BAKERSFIELD ASSOCIATION OF REALTORS®

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date of share certificates issued to each shareholder, and the number and date of cancellation of any certificates surrendered for cancellation. The secretary will give notice, or cause notice to be given, of all shareholders’ meetings, Board meetings, and meetings of committees of the board for which notice is required by statute or by the bylaws. If the secretary or other person authorized by the secretary to give notice fails to act, notice of any meeting may be given by any other officer of the Corporation. The secretary will keep the seal of the corporation, if any, in safe custody. The secretary will have such other powers and perform other duties as prescribed by the Board or by the bylaws.

requested by the president or the Board; and (4) have other powers and perform other duties as prescribed by the board of directors or the bylaws. Unless the Board has elected a separate treasurer, the chief financial officer will be deemed to be the treasurer for purposes of giving any reports or executing any certificates or other documents.

5.6.5. Chief Financial Officer. The chief financial officer will keep, or cause to be kept, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares. The books of account will at all reasonable times be open to inspection by any director. The chief financial officer will (1) deposit corporate funds and other valuables in the Corporation’s name and to its credit with depositaries designated by the Board; (2) make disbursements of corporate funds as authorized by the Board; (3) render a statement of the Corporation’s financial condition and an account of all transactions conducted as chief financial officer whenever

ARTICLE 6

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Section 5.7. Compensation. Salaries of officers and other persons employed by the Corporation shall be fixed from tim e to time by the Board or established under employment agreements approved by the Board. No officer shall be prevented from receiving this salary because he or she is also a director of the Corporation.

INDEMNIFICATION AND INSURANCE Section 6.1. Indemnification of Agents. The Corporation shall, to the maxim um extent permitted by the Code or other applicable law, have power to indemnify each of its agents against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that any such person is or was an agent of the Corporation, and shall have power to advance to each such agent expenses incurred in defending any such proceeding to the maxim um extent permitted by that law. For purposes of this Article 6, an “agent” of the Corporation includes any person who is or was a director, officer,

employee, or other agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, or was a director, officer, employee, or agent of a corporation which was a predecessor corporation of the Corporation or of another enterprise serving at the request of such predecessor corporation. Section 6.2. Insurance. The Corporation may purchase and maintain insurance on behalf of any agent of the Corporation insuring against any liability asserted against or incurred by the agent in that capacity or arising out of the agent’s status as such, whether or not the Corporation would have the power to indemnify the agent against that liability under the provisions of Section 6.1.

ARTICLE 7

RECORDS AND REPORTS Section 7.1. Maintenance of Shareholder Record and Inspection by Shareholders. The Corporation shall keep at its principal executive office or at the office of its transfer agent or registrar, as determined by resolution of the Board, a record of the name and addresses of all shareholders and the number and class of shares held by each shareholder. A shareholder or shareholders holding at least five percent (5%) in the aggregate of the outstanding voting shares of the Corporation have the right to do either or both of the following: (a) Inspect and copy the record

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of shareholders’ names and addresses and shareholdings during usual business hours, on five (5) days’ prior written demand on the Corporation; or (b) Obtain from the Corporation’s transfer agent, on written demand and tender of the transfer agent’s usual charges for this service, a list of the names and addresses of shareholders who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which a list has been compiled or as of a specified date later than the date of demand. This list shall be made available within five (5) days after (i) the date of demand, or (ii) the specified later date as of which the list is to be compiled. The record of shareholders shall also be open to inspection on the written demand of any shareholder or holder of a voting trust certificate, at any tim e during usual business hours, for a purpose reasonably related to the holder’s interests as a shareholder or holder of a voting trust certificate. Any inspection and copying under this Section may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making the demand. Section 7.2. Maintenance and Inspection of Bylaws. The Corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in this state, the original or a copy of these Bylaws as amended to date, which shall be open to inspection by the shareholders at

all reasonable tim es during office hours. If the principal executive office of the Corporation is outside the State of California and the Corporation has no principal business office in this state, the secretary shall, upon the written request of any shareholder, furnish to that shareholder a copy of these Bylaws as amended to date.

books, records, and documents of every kind and the physical properties of the Corporation and each of its subsidiary Corporations. This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.

Section 7.3. Maintenance and Inspection of Minutes and Accounting Records. The minutes of proceedings of the shareholders, Board, and committees of the Board, and the accounting books and records, shall be kept at the principal executive office of the Corporation, or at such other place or places as designated by the Board. The minutes shall be kept in written form, and the accounting books and records shall be kept either in written form or in a form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection on the written demand of any shareholder or holder of a voting trust certificate at any reasonable tim e during usual business hours, for a purpose reasonably related to the holder’s interests as a shareholder or holder of a voting trust certificate. The inspection may be m ade in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary of the Corporation.

Section 7.5. Annual Report to Shareholders. Inasmuch as, and for as long as, there are fewer than one hundred (100) shareholders, the requirement of an annual report to shareholders referred to in section 1501 of the Code is expressly waived. However, nothing in this provision shall be interpreted as prohibiting the Board from issuing annual or other periodic reports to the shareholders, as the Board considers appropriate.

Section 7.4. Inspection by Directors. Every director shall have the absolute right at any reasonable tim e to inspect all

Section 7.6. Financial Statements. The Corporation shall keep a copy of each annual financial statement, quarterly or other periodic income statement, and accompanying balance sheets prepared by the Corporation on file in the Corporation’s principal executive office for twelve (12) months. These documents shall be exhibited to at all reasonable tim es, or copies provided to, any shareholder on demand. If no annual report for the last fiscal year has been sent to shareholders, on written request of any shareholder made more than one hundred twenty (120) days after the close of the fiscal year, the Corporation shall deliver or mail to the shareholder, within thirty (30) days after receipt of the request, a balance sheet as of the BAKERSFIELD ASSOCIATION OF REALTORS®

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end of that fiscal year and an incom e statement of changes in financial position for that fiscal year. A shareholder or shareholders holding five percent (5%) or m ore of the outstanding shares of any class of stock of the Corporation may request in writing an income statement for the most recent three-month, six-month, or ninemonth period (ending more than thirty (30) days before the date of the request) of the current fiscal year, and a balance sheet of the Corporation as of the end of that period. If such documents are not already prepared, the chief financial officer shall cause them to be prepared and shall deliver the documents personally or mail them to the requesting shareholders within thirty (30) days after receipt of the request. A balance sheet, income statement, and statement of changes in financial position for the last fiscal year shall also be included, unless the Corporation has sent the shareholders an annual report for the last fiscal year. Quarterly income statements and balance sheets referred to in this section shall be accompanied by the report, if any, of independent accountants engaged by the Corporation or the certificate of an authorized corporate officer stating that the financial statem ents were prepared without audit from the Corporation’s books and records. Section 7.7. Annual Statement of General Information. The Corporation shall file a statement with the Secretary of State on the prescribed form,

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setting forth the authorized number of directors; the names and complete business or residence addresses of all incumbent directors; the names and complete business or residence addresses of the chief executive officer, the secretary, and the chief financial officer; the street address of the Corporation’s principal executive office or principal business office in this state; a statement of the general type of business constituting the principal business activity of the corporation; and a designation of the agent of the Corporation for the purpose of service of process, all in compliance with California Corporations Code § 1502. Notwithstanding the foregoing provisions, if there has been no change in the information in the Corporation’s last statement on file with the Secretary of State’s office, the Corporation may, in lieu of filing the statement described in paragraph (a) of this section, advise the Secretary of State, on the appropriate form, that no changes in the required information have occurred during the applicable period.

ARTICLE 8.

DISSOLUTION Section 8.1. In the event this Corporation shall at any time terminate its activities, the Board shall consider and adopt a plan of liquidation and dissolution with the approval of the Participants thereof and of the Board of the Association as the Corporation’s sole shareholder. Said plan shall provide for the collection of all assets, the payment of all liabilities, and that the remaining

portions thereof be assigned to the parent corporation, namely, the Bakersfield Association of Realtors®, Incorporated.

ARTICLE 9.

MISCELLANEOUS PROVISIONS Section 9.1. Record Date for Purposes other than Notice and Voting. For purposes of determining the shareholders entitled to receive payment of dividends or other distributions or allotment of rights, or entitled to exercise any rights in respect of any other lawful action (other than voting at and receiving notice of shareholders’ meetings and giving written consent of the shareholders without a meeting), the Board may fix in advance a record date which shall be not more than sixty (60) nor less than ten (10) days before the date of the dividend payment, distribution, allotment, or other action. If a record date is so fixed, only shareholders of record at the close of business on that date shall be entitled to receive the dividend, distribution, or allotment of rights, or to exercise the other rights, as the case may be, notwithstanding any transfer of shares on the Corporation’s books after the record date, except as otherwise provided by statute. If the Board does not so fix a record date in advance, the record date shall be at the close of business on the later of (i) the day on which the Board adopts the applicable resolution or (ii) the sixtieth (60th) day before the date of the dividend payment, distribution, allotment of rights, or other action.

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Section 9.2. Authorized Signatories for Checks. All checks, drafts, other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the Corporation shall be signed or endorsed by such person or persons and in such manner authorized from time to tim e by resolution of the Board. Section 9.3. Executing Corporate Contracts and Instruments. Except as otherwise provided in the articles or in these bylaws, the Board by resolution may authorize any officer, officers, agent, or agents to enter into any contract or to execute any instrument in the name of and on behalf of the Corporation. This authority may be general or it may be confined to one or more specific matters. No officer, agent, em ployee, or other person purporting to act on behalf of the Corporation will have any power or authority to bind the Corporation in any way, to pledge the Corporationâ&#x20AC;&#x2122;s credit, or to render the Corporation liable for any purpose or in any amount, unless that person was acting with authority granted by the Board as provided in these bylaws, or unless an unauthorized act was later ratified by the Corporation. Section 9.4. Certificates for Shares. A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any of the shares are fully paid. All certificates shall certify the number of shares and the class or series of shares represented by the certificate. All certificates shall be signed in the name

of the Corporation by (i) either the chairman of the Board, the vice chairman of the Board, the president, or any vice president, and (ii) either the chief financial officers, any assistant treasurer, the secretary, or any assistant secretary. None of the signatures on the certificate m ay be facsim ile. If any officer, transfer agent, or registrar who has signed a certificate shall have ceased to be that officer, transfer agent, or registrar before that certificate is issued, the certificate may be issued by the Corporation with the same effect as if that person were an officer, transfer agent, or registrar at the date of issue.

The president or any other officer

Section 9.5. Lost Certificates. Except as provided in this section, no new certificates for shares shall be issued to replace old certificates unless the old certificate is surrendered to the Corporation for cancellation at the same time. If share certificates or certificates for any other security have been lost, stolen, or destroyed, the Board may authorize the issuance of replacement certificates on term s an conditions as required by the Board, which may include a requirement that the owner give the Corporation a bond (or other adequate security) sufficient to indemnify the Corporation against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft, or destruction of the old certificate or the issuance of the replacement certificate.

Articles of Incorporation or the

Section 9.6. Representation of Shares of Other Corporations.

adopted by the Board must be

or officers authorized by the Board or the president are each authorized to vote, represent, and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the Corporation. The authority herein granted may be exercised either by any such officer in person or by any other person authorized to do so by proxy or power of attorney duly executed by said officer. Section 9.7. Amendment of Articles of Incorporation. Except as otherwise provided by the Code, amendments to the Articles of Incorporation may be adopted if approved by the Board and by a majority of the outstanding shares entitled to vote, before or after approval by the Board. An amendment to the Articles of Incorporation shall be effective as of the date that any appropriate certificate of amendment is filed with the California Secretary of State. Section 9.8. Amendment of Bylaws. Except as otherwise provided by the Articles of Incorporation or the Code, these Bylaws may be amended or repealed, and new bylaws may be adopted, by the Board or by the Association as the holders of all of the outstanding shares entitled to vote; provided, however, that any amendment or repeal of any of these Bylaws and any new bylaws approved by the Association. BAKERSFIELD ASSOCIATION OF REALTORSÂŽ

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Section 9.9. Construction and Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in sections 1 through 195 of the Code shall govern the construction of these Bylaws. W ithout limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and

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the term “person” includes both a corporation or other entity and a natural person.

held to explain, modify, amplify

Section 9.10. Headings; Cross-References. Captions of the articles, sections, and subsections of these Bylaws are for convenience only and the words contained therein

the provisions of these Bylaws.

shall in no way be

or aid in the interpretation, construction or m eaning of All cross-references in these Bylaws to articles, sections and subsections, unless specifically directed to another document, shall be deemed to refer to the articles, sections or subsections of these Bylaws.

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GEMLSRULES & REGULATIONS n

Amended by C.A.R. 2/17

Reviewed by GEMLS 10/17

Approved by NAR 10/16/17

1. AUTHORITY. Golden Empire MLS, Inc., a California corporation (the “Corporation”), which is a wholly owned subsidiary of The Bakersfield Association of REALTORS®, Incorporated (“A.O.R.”) may maintain for the use of licensed real estate brokers and salespersons, and licensed or certified appraisers, a Multiple Listing Service (hereinafter referred to as “MLS” or “service”), which shall be subject to the bylaws of the Corporation and such rules and regulations as may be hereinafter adopted by the Board of Directors of the Corporation (hereinafter “Board of Directors”).

2. PURPOSE. A Multiple Listing Service is a means by which authorized MLS Broker Participants establish legal relationships with other Participants by making a blanket unilateral contractual offer of compensation and cooperation to other Broker Participants; by which information is accumulated and disseminated to enable authorized participants to prepare appraisals, analyses and other valuations of real property for bonafide clients and customers; by which participants engaging in real estate appraisal contribute to common databases; and is a facility for the orderly correlation and dissemination of listing information among the participants so that they may better serve their clients, customers and the public. Entitlement to compensation is determined by the cooperating

broker’s performance as a procuring cause of the sale or lease. 3. BOARD OF DIRECTORS. The MLS shall be governed by the Board of Directors in accordance with the bylaws of the Corporation and such rules and regulations as adopted by the Board of Directors. 4. PARTICIPATION AND AUTHORIZED ACCESS. 4.1 Participant. A Participant is any individual who applies and is accepted by the MLS, meets and continues to meet all of the following requirements of either a Broker Participant or an Appraiser Participant as defined below in sections 4.1.1 and 4.1.2. 4.1.1 Broker Participant. A Broker Participant is a participant who meets all of the following requirements: a. The individual or corporation, BAKERSFIELD ASSOCIATION OF REALTORS®

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for which the individual acts as a broker/officer, holds a valid California real estate broker’s license; b. The individual is a principal, partner, corporate officer, or branch office manager acting on behalf of a principal; c. The individual or corporation for which the individual acts as a broker/officer is capable of offering and accepting compensation in the capacity of a real estate broker*; d. The individual has signed a written agreement to abide by the rules and regulations of the service in force at that time and as from time to time amended; e. The individual pays all applicable MLS fees; and f. The individual has completed the required MLS orientation program of no more than eight (8) classroom hours within sixty (60) business days after access has been provided, said Individual to be given the opportunity to complete any mandated orientation program remotely. *Note: Mere possession of a broker’s license is not sufficient to qualify for MLS participation. Rather, the requirement that an individual or firm “offers and/or accepts compensation” means that the Participant actively endeavors during the operation of its real estate business to list real property of the type listed on the MLS or/or to accept offers of compensation made by listing brokers or agents in the MLS. “Actively” means on a continual and on-going basis during the operation of the Participant’s real estate business. The “actively”

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requirement is not intended to preclude MLS participation by a Participant or potential Participant that operates a real estate business on a part time, seasonally, or similarly timelimited basis or that has its business interrupted by periods of relative inactivity occasioned by market conditions. Similarly, the requirement is not intended to deny MLS participant to a Participant or potential Participant who has not achieved a minimum number of transactions despite good faith efforts. Nor is it intended to permit an MLS to deny participation based on the level of service provided by the Participant or potential Participant as long as the level of service satisfies state law. The key is that the Participant or potential Participant actively endeavors to make or accept offers of cooperation and compensation with respect to properties of the type that are listed on the MLS in which participation is sought. This requirement does not permit an MLS to deny participation to a Participant or potential Participant that operates a Virtual Office Website (“VOW”) [See Rule No. 12.19] (including a VOW that the Participant uses to refer customers to other Participants) if the Participant or potential Participant actively endeavors to make or accept offers of cooperation and compensation. An MLS may evaluate whether a Participant or potential Participant “actively” endeavors during the operation of its real estate business” to “offer and/or accept

compensation” only if the MLS has a reasonable basis to believe that the Participant or potential Participant is in fact not doing so. The membership requirement shall be applied on a nondiscriminatory manner to all Participants and potential Participants. 4.1.2 Appraiser Participant. An Appraiser Participant is a Participant who meets all of the following requirements: a. The individual holds a valid California Appraisers certification or license; b. The individual is a principal, partner, corporate officer, or branch office manager acting on behalf of a principal; c. The individual has signed a written agreement to abide by the rules and regulations of the service in force at that time and as from time to time amended; d. The individual pays all applicable MLS fees; and e. The individual has completed the required MLS orientation program of no more than eight (8) classroom hours within sixty (60) business days after access has been provided, said Individual to be given the opportunity to complete any mandated orientation program remotely. 4.1.3 Redundant Participant Qualifications. Participant type (Broker or Appraiser) must be selected during application for participation. A Participant with both a California Real Estate Broker’s license and a California Appraiser’s certification or license must join as a “Broker Participant” to be a listing broker under Section 4.6 or a cooperating

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broker or selling broker under Section 4.7. 4.2 Subscriber. A Subscriber is an individual who applies and is accepted by the MLS, meets and continues to meet all of the following requirements of either a real estate subscriber or Appraiser Subscriber as defined below in sections 4.2.1 and 4.2.2: 4.2.1 R.E. Subscriber. A Real Estate Subscriber is a Subscriber who meets all of the following requirements: a. The individual holds a valid California real estate salesperson’s or broker’s licensee; b. The individual is employed by or affiliated as an independent contractor with a Broker Participant; c. The individual has signed a written agreement to abide by the rules and regulations of the service in force at that time and as from time to time amended; d. The individual pays all applicable MLS fees; and e. The individual has completed the required MLS orientation program of no more than eight (8) classroom hours within sixty (60) business days after access has been provided, said individual to be given the opportunity to complete any mandated orientation program remotely. 4.2.2 Appraiser Subscriber. An Appraiser Subscriber is a Subscriber who meets all of the following requirements: a. The individual holds a valid California real estate appraisers certification or license; b. The individual is employed by or affiliated as an independent

contractor with an Appraiser Participant; c. The individual has signed a written agreement to abide by the rules and regulations of the service in force at that time and as from time to time amended; d. The individual pays all applicable MLS fees; and e. The individual has completed the required MLS orientation program of no more than eight (8) classroom hours within sixty (60) business days after access has been provided, said individual to be given the opportunity to complete any mandated orientation program remotely. 4.2.3 Redundant Subscriber Qualifications. Subscriber type (real estate or appraiser) must correlate to the Participant type. A Subscriber who is both a California Real Estate Licensee and a California certified or licensed appraiser must join as a R.E. Subscriber unless their employing and affiliated Participant is an Appraiser Participant. 4.3 Clerical Users. Clerical users are individuals (whether licensed or unlicensed) under the direct supervision of an MLS Participant or Subscriber that perform only administrative and clerical tasks that do not require a real estate license or an Appraiser’s certificate or license. Clerical Users may join the MLS through their employing Participant or Subscriber. The Participant shall be responsible for the conduct of the Clerical User. Clerical Users shall be linked in the system to at least one Participant. They may also be linked to a particular Subscriber. Each Participant

and Subscriber shall provide the MLS with a list of all Clerical Users employed by or affiliated as independent contractors with the Participant or Subscriber and shall immediately notify the MLS of any changes, additions or deletions from the list. Clerical Users shall also be subject to the following requirements: a. Clerical Users are given a unique passcode. b. Clerical Users must have any fees paid in full; c. Participant or Subscriber limited to the Clerical User may be fined, disciplined or terminated for Clerical User’s misconduct; d. Clerical Users shall sign a written agreement to abide by the rules and regulations of the MLS; and e. Clerical Users shall complete any required orientation a program of no more than eight (8) classroom hours within sixty (60) business days after access has been provided, said individual to be given the opportunity to complete any mandated orientation program remotely. 4.4 Notification of Licensees. Each participant shall provide the MLS with a list of all real estate licensees or certified or licensed Appraisers employed by or affiliated as independent contractors with such Participant or with such Participant’s firm and shall immediately notify the MLS of any changes, additions or deletions from the list. This list shall include any licensees under any broker associate affiliated with the Participant. 4.5 Participation Not Transferable. Participation in the MLS is on BAKERSFIELD ASSOCIATION OF REALTORS®

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an individual basis and may not be transferred or sold to any corporation, firm or other individual. Any reimbursement of MLS fees is a matter of negotiation between those transferring the business or determined by internal contract arrangement within the firm. However, providing the first Participant consents, the Corporation shall allow a firm to designate a different person as a Participant within the firm without additional initial participation fees. The Corporation may charge an administrative fee for this service of reassigning Participants within a firm. 4.6 Listing Broker Defined. For purposes of these MLS rules, a listing broker is a Broker Participant who is also a listing agent as defined in Civil Code § 1086 who has obtained a written listing agreement by which the broker has been authorized to act as an agent to sell or lease the property or to find or obtain a buyer or lessee. Whenever these rules refer to the listing broker, the term shall include the Real Estate Subscriber or a licensee acting for the listing broker but shall not relieve the listing broker of responsibility for the act or rule specified. 4.7 Cooperating Broker or Selling Broker Defined. For purposes of these MLS rules, a cooperating broker or selling broker is a broker participant who is also a selling agent as defined in Civil Code Section 1086 who acts in cooperation with a listing broker to accept the offer of compensation and/or sub-agency to find or obtain a buyer or lessee. The cooperating broker or selling

BAKERSFIELD ASSOCIATION OF REALTORS®

broker may be the agent of the buyer or, if sub-agency is offered and accepted, may be the agent of the seller. Whenever these rules refer to the cooperating broker or selling broker, the term shall include the Real Estate Subscriber or licensee acting for the cooperating or selling broker but shall not relieve that Broker Participant of responsibility for the act or rule specified. 4.8 Appraiser Defined. For purposes of these MLS rules, an appraiser is an Appraiser Participant, Appraiser Subscriber, or a licensed or certified appraiser acting for the Appraiser Participant or Appraiser Subscriber. Whenever these rules refer to the appraiser, the term shall also include the Appraiser Subscriber or a licensed or certified appraiser employed by or affiliated as an independent contractor with the firm that employs the appraiser but shall not relieve that Appraiser Participant of responsibility for the act or rule specified. 4.9 Denied Application. In the event an application for participation in the MLS is rejected by the MLS, the applicant, and his or her broker, if applicable, will be promptly notified in writing of the reason for the rejection. The broker shall have the right to respond in writing, and to request a hearing in accordance with the California Code of Ethic and Arbitration Manual. 4.10 Interim Training. Participants and Subscribers may be required, at the discretion of the MLS, to complete additional training of not more than four (4) classroom

hours in any twelve (12) month period when deemed necessary by the MLS to familiarize Participants and Subscribers with system changes or enhancement and/or changes to MLS rules or policies. Participants and Subscribers must be given the opportunity to complete any mandated additional training remotely.

5. MLS FEES AND CHARGES. 5.1 Service Fees and Charges. The Board of Directors shall establish a schedule of MLS fees applicable to the MLS, which may include the following service fees and charges: 5.1.1 Initial Participation and/or Application Fee: Applicants for MLS services may be assessed initial participation and/or application fee. 5.1.2 Recurring Participation Fee: The recurring participation fee of each Broker Participant, Appraiser Participant, Subscriber, Appraiser Subscriber, and clerical user shall be established by the Board of Directors, consistent with the annual budget approved by the Board of Directors. A Broker or Appraiser Participant is not obligated to pay recurring Participation fees or other MLS fees and charges for real estate licensees or certified Appraisers affiliated with the Participant or the Participant’s firm if such licensees/Appraisers work out of a branch office of the Participant or the Participant’s firm that does not participate in or otherwise use the MLS. 5.1.3 Listing Fee: A Broker Participant shall pay a

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listing fee for each listing submitted to the MLS staff for input. 5.1.4 Participation Re-Establishment Fee: A flat fee will be paid each time a Participant/Subscriber temporarily suspends the MLS Services, but maintains his individual account on an active basis. Fee is to be set by the Board of Directors. The ReEstablishment fee is related to the administrative work necessary to suspend and later re-establish the MLS Services. Any Participant/Subscriber who discontinues his Participation in the MLS, and who does not maintain an active account and later wishes participation in the MLS, must place a new application for participation and pay the fee as with any other new applicant. 5.1.5 Certification of Nonuse. Participants may be relieved from payment under section 5.1.2 hereunder by certifying in writing to the MLS that a licensed or certified person in the office is engaged solely in activities that do not require a real estate license or certification (clerical, etc.), or that the licensee is engaged solely and exclusively in a specialty of the real estate business separate and apart from listing or selling the type of properties which are required to be filed with the MLS, and that the real estate licensee or licensed or certified appraiser will not use the MLS or MLS compilation in any way. In the event a real estate licensee or appraiser is found in violation of the nonuse certification, the Participant shall be subject to all MLS fees dating back to the date of the certification. The Participant

and Subscriber may also be subject to any other sanction imposed for violation of MLS rules including, but not limited to, a citation and suspension or termination of participation rights and access to the service. 5.1.6 Clerical Users. Clerical users may be assessed application fees, recurring access fees and other fees. The Participant for the clerical user shall be responsible for all such fees. 5.1.7 Other Fees. Other fees that are reasonably related to the operation of the MLS may be adopted. 5.2 Responsibility for Fees. In the event the MLS allows for direct billing or payment by a Subscriber for MLS fees, such fees shall be the exclusive obligation of that Subscriber regardless of whether such Subscriber becomes affiliated with a different Participant. If the MLS does not allow for direct billing or payment by a Subscriber for MLS fees, such fees shall be the responsibility of the Participant with whom the Subscriber was affiliated with at the time the MLS fees were incurred. This section does not preclude in any way the ability of Participants to pursue reimbursement of MLS fees from current or past Subscribers or to establish agreements with Subscribers regarding payment or reimbursement of MLS fees.

6. REGIONAL AND RECIPROCAL AGREEMENTS. The Board of Directors may enter into reciprocal or regional agreements with other Associations of REALTORS® or

MLS Corporations owned solely by Associations of REALTORS® to allow the other MLS Participants and Subscribers access to the service in exchange for comparable benefits to the Participants and Subscribers of this service. In the event of such agreements, the Participants and Subscribers agree to abide by the respective rules of the other Multiple Listing Services receiving and publishing a listing pursuant to such agreements and to abide by such rules when accessing the other Multiple Listing Services’ databases.

7. LISTING PROCEDURES. 7.1 Listings Subject to Rules and Regulations of the Service. Any listing filed with the service is subject to the rules and regulations of the service. 7.2 Types of Listings; Responsibility for Classification. The service shall accept exclusive right to sell, exclusive agency, open, and probate listings as defined in California Civil Code Section 1086 et seq. that satisfy the requirements of these MLS rules. Exclusive right to sell listings that contain any exceptions whereby the owner need not pay a commission if the property is sold to particular individuals shall be classified for purposes of these rules as an exclusive right to sell listing but the listing broker shall notify all Participants of the exceptions. It shall be the responsibility of the Broker Participant and Real Estate Subscriber to properly classify the type of listing, and if necessary, obtain a legal opinion to determine BAKERSFIELD ASSOCIATION OF REALTORS®

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the correct classification. By classifying the type of the listing, the listing broker certifies that the listing falls under the legal classification designated. The MLS shall have no affirmative responsibility to verify the listing type of any listing filed with the service. However, the MLS shall have the right to have legal counsel make a determination as to the classification of the listing type and if the listing broker does not reclassify it accordingly, the Corporation shall have the right to reject or remove any such listing that it determines falsely represents the classification of listing type. 7.2.1 Scope of Service; Limited Service Listings. Limited Service listings are listings whereby the listing broker, pursuant to the listing agreement, will not provide one, or more, of the following services: a. Provide cooperating brokers with any additional information regarding the property not already displayed in the MLS but instead gives cooperating brokers authority to contact the seller(s) directly for further information; b. Accept and present to the seller(s) offers to purchase procured by cooperating brokers but instead gives cooperating brokers authority to present offers to purchase directly to the seller(s); c. Advise the seller(s) as to the merits of offers to purchase; d. Assist the seller(s) in developing, communicating, or presenting counter-offers; or e. Participate on the seller(s) behalf in negotiations leading to the sale of the listed property.

BAKERSFIELD ASSOCIATION OF REALTORS®

Said Limited Service listings will be identified with an appropriate code or symbol (e.g. “LS”) in MLS compilations so potential cooperating brokers will be aware of the extent of the services the listing broker will provide to the seller(s), and any potential for cooperating brokers being asked to provide some or all of these services to listing broker’s clients, prior to initiating efforts to show or sell the property. 7.2.2 Scope of Service; MLS Entry-Only Listings. MLS Entry-Only listings are listings whereby the listing broker, pursuant to the listing agreement, will not provide any of the following services: a. Provide cooperating brokers with any additional information regarding the property not already displayed in the MLS but instead gives cooperating brokers authority to contact the seller(s) directly for further information; b. Accept and present to the seller(s) offers to purchase procured by cooperating brokers but instead gives cooperating brokers authority to present offers to purchase directly to the seller(s); c. Advise the seller(s) as to the merits of offers to purchase; d. Assist the seller(s) in developing, communicating, or presenting counter-offers; or e. Participate on the seller(s) behalf in negotiations leading to the sale of the listed property. Said MLS Entry-Only listings will be identified with an appropriate code or symbol (e.g. “EO”) in MLS compilations so potential cooperating brokers will be aware of the extent of the services the

listing broker will provide to the seller(s), and any potential for cooperating brokers being asked to provide some or all of these services to listing broker’s clients, prior to initiating efforts to show or sell the property. 7.2.3 Scope of Service; Legal Obligations. The scope of service classifications set forth in these rules does not alter any obligations otherwise imposed on real estate licensees under California law, including Department of Real Estate regulations, statutory law and common law. The MLS’s acceptance or publication of listings eligible for MLS submission in no way constitutes a validation that said obligations have been met. 7.3 Types of Properties; Responsibility for Classification. The MLS shall accept listings that satisfy the requirements of these rules on the following types of property: a. Residential b. Residential Income c. Residential Lease d. Lots and Land e. Farm and Ranch f. Business Opportunity g. Manufactured and Mobile Homes h. Commercial/Industrial i. Commercial Leases It shall be the responsibility of the Broker Participant and Real Estate Subscriber to properly classify the type of property listed, and if necessary, obtain a legal opinion to determine the correct classification. By classifying the type of property listed, the listing broker certifies that the listing

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falls under the classification designated. The MLS shall have no affirmative responsibility to verify the property type of any listing filed with the service. However, the MLS shall have the right to have legal counsel make a determination as to the classification of the property type and if the listing broker does not reclassify it accordingly, the Corporation shall have the right to reject or remove any such listing that it determines falsely represents the classification of property type of the listing. Submission of duplicate listings by the same Participant within the same property class is prohibited. 7.4 Compliance with California and Federal Law. Notwithstanding any other provision of these MLS rules and regulations to the contrary, the service shall accept any listing that it is required to accept under California or federal law. 7.4.1 Time Frame Definitions. Unless otherwise expressly indicated, where compliance time frames set forth ”days,” “days” mean business days (excepting weekends, holidays and postal holidays per MLS Rule 14.4); “days after” means the specified number of calendar days after the occurrence of the event specified, not counting the calendar date on which the specified event occurs, and ending at 11:59 p.m. on the final day; and “days prior” means the specified number of calendar days before the occurrence of the event specified, not counting the calendar date on which the specified event is scheduled to occur.

7.5 Mandatory Submission. Within two (2) business days after all necessary signatures of the seller(s) have been obtained on the listing or at the beginning date of the listing as specified in the contract, whichever is later, on any exclusive right to sell or exclusive agency listing on one to four unit residential property and vacant lots located within the service area of the MLS, Broker Participants shall (1) input the listing to the service, or (2) submit a seller-signed exclusion in accordance with Section 7.6 (Exempted Listings) to the service. If a property is withheld as an Exempted Listing for a specified period of time, at the end of the specified period, the listing must be submitted within one (1) business day. All necessary signatures are those needed to create an enforceable listing, which generally means all named signatories to the listing agreement. In the event there are known additional property owners not made a signatory to the listing, listing broker shall disclose said fact on the service and state whether the listed seller will make the sale contingent on the consent of the additional property owners. In the event listing agent is prevented from complying with the two (2) business days time period due to seller’s delay in returning the signed listing agreement, listing broker must submit the listing to the service within two (2) business days of receipt back from seller. The MLS may require listing broker to present documentation to the service evidencing seller’s delayed transmission. Only those listings that are within the

service area of the MLS must be input. Open listings or listings of property located outside the MLS’s service area (see section 7.7) are not required by the service, but may be input at the Broker Participant’s option. 7.5.1 Co-Listings. Only the listings of Participants and Subscribers will be accepted by the MLS. Where the Co-Listing Broker/Agent is not a Participant/ Subscriber of the MLS, no identifying information (including but not limited to name, telephone numbers or webpage addresses) regarding the co-listing office or co-listing salesperson is to be included in the listing information. 7.6 Exempted Listings. If the seller refuses to permit the listing to be disseminated by the service, the listing broker shall submit to the service a certification signed by the seller that the seller does not authorize the listing to be disseminated by the service. C.A.R. Standard Form SELM may be used for this certification, but in any event, said exclusion shall include an advisory to seller that, in keeping the listing off the MLS, (1) real estate agents and brokers from other real estate offices, and their buyer clients, who have access to the MLS may not be aware seller’s property is for sale, (2) seller’s property will not be included in the MLS’s download to various real estate Internet sites that are used by the public to search for property listings, (3) real estate agents, brokers and members of the public may be unaware of the terms and conditions under which seller is marketing the property, and (4) any BAKERSFIELD ASSOCIATION OF REALTORS®

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reduction in the exposure of the property may lower the number of offers made and negatively impact the sales price. 7.7 Service Area. The MLS’s service area is coextensive with the territorial jurisdiction of the A.O.R. If the Corporation has entered into regional MLS agreements or a regional MLS corporation with other multiple listing services and has enlarged the service area as part of the agreement or corporation, submission of the type of listings specified in section 7.5 is mandatory for the area covered by the combined service areas of the Associations or Corporations that are signatory to the regional MLS agreement or part of the regional MLS corporation. 7.8 Change of Listing Information. Listing brokers shall input any change in listing information, including the listed price or other change in the original listing agreement, to the MLS within two (2) business days (excepting weekends, holidays and postal holidays per MLS Rule 14.4) after the authorized change is received by the listing broker. By inputting such changes to the MLS, the listing broker represents that the listing agreement has been modified in writing to reflect such change or that the listing broker has obtained other legally sufficient written authorization to make such change. MLS Tracking of price change information, if any, shall be classified as “nonconfidential” for the purpose of allowing Participants and Subscribers to make such information available to clients or

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customers pursuant to Section 12.15.1 (Client Copies) and 12.19 (VOWs). Display of this field is not permitted for advertising purposes, including IDX display set forth in Section 12.17. 7.9 Withdrawal/Cancellation of Listing. 7.9.1 Withdrawal of Listing Prior to Expiration. Listings of property must be withdrawn from the MLS by the listing broker before the expiration date of the listing agreement if the listing broker has received written instructions from the seller to withdraw the listing from the MLS. Listing broker may withdraw any listing from the MLS two business days after providing seller with written notice of the broker’s intention to withdraw the listing based on a dispute with the seller regarding the terms of the listing agreement. The MLS may require the listing broker to provide a copy of any notice of dispute or any written instructions from the seller. 7.9.2 Cancellation of Listing Prior to Expiration. Listings of property shall be cancelled by the listing broker before the expiration date of the listing agreement in cases where the listing contract between the listing broker and the owner has been cancelled in writing with no further obligations from the contract to either party. The MLS may require the listing broker to provide a copy of such written cancellation. 7.9.3 Request of Seller to Terminate. Sellers do not have the unilateral right to require the MLS to cancel

any listing. However, the MLS reserves the right to remove a listing from the MLS data base if the seller can document that his or her listing agreement with the listing broker has been terminated or is invalid. Withdrawal from the MLS with the seller’s consent does not relieve the obligation of the listing broker to report the sale and sales price if it closes escrow while the seller is represented by the listing broker. 7.10 Contingencies. Any contingency or condition of any term in a listing shall be specified and noticed to the Participants. 7.11 Detail on Listings Filed with the Service. All listings input into the MLS shall be complete in every detail including full gross listing price, listing expiration date, compensation offered to other Broker Participants and any other information required to be included as determined by the Board of Directors. Listings that are incomplete shall be ineligible for publication in the MLS and subject to immediate removal. The Broker Participant and Real Estate Subscriber may be subject to penalties for failure to submit the completed property data form within two (2) business days, per MLS Rule 7.5. 7.11.1 Marketing Remarks, Photos and Virtual Media: Marketing (Public) Remarks, Photos and Virtual Media shall be limited to a description of the property. No contact information identifying the Listing Broker/Agent (including but not limited to name, telephone numbers or webpage

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addresses) regarding the listing office or listing salesperson is to be included in this section. Similarly, inducements and financing information or requirements are not permissible in the Marketing (Public) Remarks portion of the listing. (If marketing remarks included are not in violation of these Rules and do not lead back to the Broker or Lender, they are deemed permissible.) 7.12 Unilateral Contractual Offer; Sub-agency Optional. In filing a property with the MLS, the Broker Participant makes a blanket unilateral contractual offer of compensation to the other MLS Broker Participants for their services in selling the property. Except as set forth in Rule 7.15 below or pursuant to California Civil Code Section 1087, a Broker Participant must specify some compensation to be paid to either a buyer’s agent or a subagent and the offer of compensation must be stated in one, or a comb percentage of the gross selling price; or (2) a definite dollar amount. The amount of compensation offered through the MLS may not contain any provision that varies the amount of compensation offered based on conditions precedent or subsequent or on any performance, activity or event. In the event there are any service fees or administrative costs, etc. to be imposed on buyer’s agent’s compensation, any such reductions should be factored in as a reduced amount the listing broker initially offers to a cooperating broker and may not be made a condition of the offer.

Furthermore, the MLS reserves the right to remove a listing from the MLS data base that does not conform to the requirements of this section. NOTE: See Rule 7.15.2 regarding agent compensation for Lender Approved Listings. At the broker participant’s option, a broker participant may limit his or her offer of compensation to buyer’s agents only, to subagents only, or make the offer of compensation to both. Any such limitations must be specified on the property data form and in the MLS. The amount of compensation offered to buyers’ agents or subagents may be the same or different but must be clearly specified on the property data profile sheet. Broker Participants wishing to offer sub-agency to the other MLS Broker Participants must so specify on the property data profile sheet and on the MLS, otherwise, the offer of compensation does not constitute an offer of subagency. 7.13 Acceptance of Contractual Offer. The Broker Participant’s contractual offer (with or without subagency) is accepted by the Participant/selling broker by procuring a buyer which ultimately results in the creation of a sales or lease contract. Payment of compensation by the Participant/ listing broker to the Participant/ cooperating broker under this section is contingent upon either (1) the final closing or (2) the Participant/listing broker’s receipt of monies resulting from the seller’s or buyer’s default of the underlying sales or lease

contract. Notwithstanding this section, the listing broker and/ or cooperating broker shall still retain any remedies they may have against either the buyer or seller due to a default under the terms of the purchase agreement, listing agreement or other specific contract. Any dispute between Participants arising out of this section shall be arbitrated under Section 16 of these rules and shall not be considered a MLS rules violation. 7.14 Consent to Act as Dual Agent. By offering compensation and/or subagency to Broker Participants, the listing broker is not automatically representing that the seller has consented to the cooperating broker acting as a dual agent representing both the buyer and the seller. No cooperating broker shall act as both an agent of the buyer and the seller without first contacting the listing broker and ascertaining that the seller has consented to such dual agency. 7.15 Estate Sale, Probate, Bankruptcy and Lender Approval Listings. 7.15.1 Estate Sale, Probate and Bankruptcy Listings. Compensation offered through the MLS to cooperating brokers on estate sale, probate or bankruptcy listings is for the amount published therein as long as the cooperating broker produces the contract which is ultimately successful and confirmed by the court, if court confirmation is required. In the event the contract produced by the cooperating broker is overbid in BAKERSFIELD ASSOCIATION OF REALTORS®

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court and the overbid contract is confirmed, the original cooperating broker shall receive the amount of compensation specified as “unconfirmed cooperating broker’s compensation” or “u.c.b.” in the property data profile sheet and on the MLS. For estate sale or probate listings, the compensation offered through the service under these rules and this section shall be considered an agreement as referred to in California Probate Code Section 10165 and will therefore supersede any commission splits provided by statute when there is no agreement. This section contemplates that estate sale, probate and bankruptcy judges have broad discretion and therefore are not intended as a guarantee of a specific result as to commissions in every probate or bankruptcy sale.

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7.15.2 Lender Approval Listings. (See CAR 7.28) Compensation offered through the MLS to cooperating brokers on listings which require lender approval (commonly referred to as “short sale” listings) is for the amount published therein unless the listing broker indicates on the MLS the following: (a) the fact that the sale and gross commission are subject to lender approval; and (b) the amount or method by which the compensation offered through the MLS will be reduced if the lender reduces the gross commission. This section does not allow an additional reduction from the commission offered for items such as a short sale negotiator fee or other administrative costs of the transaction. Any reductions from the commission offered for such items should be factored in as a reduced amount the listing broker

initially offers to a cooperating broker and may not be made a condition of the offer. (Example: Agent remarks section might state: “Short Sale. Compensation subject to lender approval. Any reduction split 50/50.” The listing broker may also choose a different allocation of any potential reduction (e.g. any reduction to be borne entirely by listing office (or cooperating office), or 25% of any reduction to be allocated to listing office and 75% by cooperating office, etc.) 7.16 Changes to Offer of Compensation by Listing Broker to All Broker Participants. The listing broker may, from time to time, adjust the published compensation offered to all MLS Broker Participants with respect to any listing by changing the compensation offered on the MLS or providing written notice to the

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MLS of the change. Any change in compensation will be effective after the change is published in the MLS, either through electronic transmission or printed form, whichever occurs first. The listing broker may revoke or modify the offer of compensation in advance as to any individual broker participant in accordance with general contract principles but in no event shall the listing broker revoke or modify the offer of compensation without the cooperating broker’s consent later than the time the cooperating broker (a) physically delivers or transmits by fax or e-mail to the listing broker a signed offer from a prospective buyer to purchase the property for which the compensation has been offered through the MLS, or (b) notifies the listing broker in person or by telephone, fax or e-mail that the cooperating broker is in possession of a signed offer from a prospective buyer to purchase the property for which the compensation has been offered through the MLS and is awaiting instructions from the listing broker as to the manner of presentation or delivery of that offer. Any independent advance revocations, modifications of the offer or agreements between real estate brokers are solely the responsibility of such brokers and shall not be submitted to, published by, or governed in any way by the service. 7.17 Broker Participant or R.E. Subscriber as Principal. If a listing broker has any interest in property, the listing of which is to be disseminated through the

service, that person shall disclose that interest on the MLS. 7.18 Multiple Unit Properties. All properties which are to be sold or which may be sold separately must be indicated individually in the MLS and will be published separately. When part of a listed property has been sold, the listing broker shall input the appropriate changes on the MLS. 7.19 Expiration, Extension, and Renewal of Listings. Listings shall be changed to the appropriate off-market status on the expiration date specified on the listing unless the listing is extended or renewed by the listing broker. The listing broker shall obtain written authorization from the seller(s) before filing any extension or renewal of a listing. Any renewals or extensions received after the expiration date of the original listing shall be treated as a new listing and will be subject to any fees applicable to new listings. At any time and for any reason, the MLS has the right to request a copy of the seller’s written authorization to extend or renew a listing. If a listing broker is requested to provide a copy of such authorization and does not do so within one (1) business day of the request, the listing shall be subject to immediate removal from the MLS. 7.19.1 Extension for Protected Buyer. In the event a listing broker’s listing has expired but a commission extension right for a protected buyer has been timely activated in the listing agreement and listing broker represents seller in said transaction, listing broker may be

considered the “listing broker” for MLS reporting of sale as long as satisfactory documentation is presented to MLS. 7.19.1 Extension for Protected Buyer. In the event a listing broker’s listing has expired but a commission extension right for a protected buyer has been timely activated in the listing agreement and listing broker represents seller in said transaction, listing broker may be considered the “listing broker” for MLS reporting of sale as long as satisfactory documentation is presented to MLS. 7.20 Listings of Participants or Subscribers Suspended, Expelled or Resigned. 7.20.1 Failure to Pay MLS Fees; Resignation. When a participant or subscriber is suspended or expelled from the service for failure to pay MLS fees or charges, or if the Participant or Subscriber resigns from the service, the MLS shall cease to provide services to such Participant or Subscriber, including continued inclusion of listings in the MLS compilation of current listing information. In the event listings are removed from the MLS pursuant to this section, it shall be the sole responsibility of the Participant to notify the seller(s) that the property is no longer listed in the MLS. 7.20.2 Violation of MLS Rules. When a Participant or Subscriber is suspended or expelled from the service for a violation of the MLS rules and regulations, the MLS shall cease to provide services to such Participant or Subscriber BAKERSFIELD ASSOCIATION OF REALTORS®

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except that the listings in the MLS at the time of suspension or expulsion shall, at the suspended or expelled Participant’s option, be retained in the MLS compilation of current listing information until sold, withdrawn or expired, and shall not be renewed or extended by the MLS beyond the termination date of the listing agreement in effect when the expulsion became effective. In the event listings are removed from the MLS pursuant to this section, it shall be the responsibility of the Participant to notify the seller(s) that the property is no longer listed in the MLS. If a suspended or expelled Participant opts to keep listings in the MLS until sold, withdrawn or expired under this Section 7.20.2, the Participant must comply with all applicable MLS rules and regulations during such time or the MLS may immediately remove the listings from further display. 7.21 No Control of Commission Rates or Fees Charged by Participants. The MLS shall not fix, control, recommend, suggest, or maintain commission rates or fees for services to be rendered by Participants. Further, the MLS shall not fix, control, recommend, suggest, or maintain the division of commissions or fees between cooperating Participants or between Participants and nonParticipants. 7.22 Dual or Variable Rate Commission Arrangements. The existence of a dual or variable commission arrangement shall be disclosed by the listing broker by a key, code or symbol as required by the MLS. A dual or variable rate

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commission arrangement is one in which the seller or owner agrees to pay a specified commission if the property is sold by the listing broker without assistance and a different commission if the sale results through the efforts of a cooperating broker, or one in which the seller or owner agrees to pay a specified commission if the property is sold by the listing broker either with or without the assistance of a cooperating broker and a different commission if the sale results through the efforts of a seller or owner. The listing broker shall, in response to inquiries from potential cooperating brokers, disclose the differential that would result in either a cooperative transaction or, alternatively, in a sale that results through the efforts of the seller or owner. If the cooperating broker is representing a buyer or tenant, the cooperating broker must then disclose such information to his or her client before the client makes an offer to purchase or lease. 7.23 Right of Listing Broker and Presentation of Counter Offers. The listing broker has the right to participate in the presentation of any counter-offer made by the seller or lessor. The listing broker does not have the right to be present at any discussion or evaluation of a counter-offer by the purchaser or lessee (except where the cooperating broker is a subagent). However, if the purchaser or lessee gives written instructions to the cooperating broker that the listing broker not be present when a counter-offer is presented, the listing broker has the right to a copy of the

purchaser’s or lessee’s written instructions. 7.24 Auction Listings. Only auction listings which comply with these MLS Rules and Regulations, including, but not limited to Section 7.12 and 7.13, may be submitted to the Service. Auction listings entered into the MLS system shall have listing contracts as required under these rules, be clearly labeled as auction listings, and provide all the terms and conditions of the auction. Reserve auctions are not permitted on the MLS. Auction listings shall further specify the following: a. The list price, which shall be the seller’s minimum acceptable bid price b. The amount of buyer’s premium, if any (this is C.A.R.’s rule) c. The date, time and place of the auction; d. All required procedures for Participants/Subscribers to register their representation of a potential bidder; e. The compensation to be paid to the Participant representing the successful bidder; f. The time or manner in which potential bidders may inspect the listed property; g. Whether or not the seller will accept a purchase offer prior to the scheduled auction and if so, the compensation to be paid to the cooperating Participant in the event of such a pre-auction sale as well as any other necessary preauction details; and h. Any other material rules or procedures for the auction. 7.25 Days on Market/Cumulative Days on Market Calculation.

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The calculation of Days on Market (DOM) is based on the listing number assigned to the property by the MLS and is tied to the brokerage firm holding the listing. The calculation of Cumulative Days on Market (CDOM) is based on the Assessor’s Parcel Number (“APN”) until the earlier of a change of ownership or the property is not available for sale and no listing agreement is in effect for a period of thirty (30) business days or more. MLS Tracking of this field, if any, shall be classified as “non-confidential” for the purpose of allowing Participants and Subscribers to make such information available to clients or customers pursuant to Section 12.15.1 (Client Copies) and 12.19 (VOWs). Display of this field is not permitted for advertising purposes including IDX display set forth in Section 12.17. 7.26 REO Disclosure. Participants and Subscribers submitting foreclosure, bankowned or real estate owned (“REO”) listings to the service shall disclose said status upon submission to the service.

8. DOCUMENTATION; PERMISSION; ACCURACY OF INFORMATION. 8.1 Listing Agreement and Seller’s Permission. Prior to inputting a listing to the service, the listing broker shall obtain the written agreement of the seller expressly granting the listing broker authority to: (1) file the listing with the service for publication and dissemination to those authorized by the MLS; (2) act as an agent for the seller;

(3) abide by the rules of the service; (4) provide timely notice of status changes of the listing to the service; (5) provide sales information including selling price to the service upon sale of the property for publication and dissemination to those authorized by the MLS and (6) publish sales information after the final closing of a sales transaction in accordance with these MLS rules (See Section 10.1). 8.2 Written Documentation. Listing brokers filing listings with the service shall have a written listing agreement with all necessary signatures in their possession. Only listings that create an agency relationship between the seller and the broker participant are eligible for submission to the service. By inputting a listing to the service, Broker Participants and Real Estate Subscribers represent that they have in their possession such written agreements establishing agency and the represented type of listing agreement. The service shall have the right to demand a copy of such written listing agreements and verify the listing’s existence and adequacy at any time. The service shall also have the right to demand a copy of seller’s written authorization required under these rules. If the Broker Participant or Real Estate Subscriber fails to provide documentation requested by the service within one (1) business day, the service shall have the right to immediately withdraw any listings from the data base in addition to disciplining the Participant and Subscriber for a

violation of MLS rules. 8.3 Accuracy of Information; Responsibility for Accuracy. By inputting information into the MLS computer database, the listing broker represents that the information input is accurate to the best of the listing broker’s knowledge. The listing broker shall use good faith efforts to determine the accuracy of the information and shall not submit or input information which the listing broker knows to be inaccurate. Upon receipt of the first publication or electronic transfer by the MLS of such information the listing broker shall make all necessary corrections. The MLS merely publishes the MLS information and has no affirmative responsibility to verify the accuracy of the MLS information. The MLS, however, reserves the right to require Participants and Subscribers to change their MLS information if the MLS is made aware of alleged inaccuracies in the MLS information and the MLS determines that such inaccuracies do in fact exist. The MLS also reserves the right to remove a listing that contains said inaccurate information within 2 business days after being notified of the inaccuracies by the MLS. If a Participant or Subscriber fails to make necessary or required corrections to their MLS information, the Participant and Subscriber shall indemnify and hold harmless the service for any claims, costs, damage or losses, including reasonable attorney fees and court costs, incurred by the MLS as a result of such failure. In BAKERSFIELD ASSOCIATION OF REALTORS®

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no event will the MLS be liable to any MLS Participant, Subscriber or any other party for any indirect, special or consequential damages arising out of any information published in the MLS and all other damages shall be limited to an amount not to exceed the MLS fees paid by the listing broker. 8.4 Input Defined. All references or uses of the word “input” shall also include information which is submitted to the MLS for input in the MLS data base by a Clerical User, Listing Broker or MLS staff, whether such information was provided on a “property data form” or otherwise. 8.5 Buyer, Seller, Purchase and Sale Defined. All references to the buyer shall also include lessee. All references to the seller shall also include lessor. All references to a purchase shall also include a lease. All references to a sale shall also include a lease.

9. SELLING PROCEDURES. 9.1 Showings and Negotiations. Appointments for showings and negotiations with the seller for the purchase of listed property filed with the service shall be conducted through the listing broker except under the following circumstances: a. The listing broker gives the cooperating broker specific authority to show and/or negotiate directly with the seller, or b. After reasonable effort and no less than one (1) business day, the cooperating broker cannot contact the listing broker or his representative. However, the listing broker, at his option, may preclude such direct negotiations by the

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cooperating broker by giving notice to all participants through the MLS. In the event all showings and negotiations will be conducted solely by the seller, the listing broker shall clearly set forth such fact in the listing information published by the service. 9.1.1 Availability to Show or Inspect. Listing brokers shall not misrepresent the availability of access to show or inspect a listed property. 9.1.2 Disclosing the Existence of Offers. Listing brokers, in response to inquiries from buyers or cooperating brokers, shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, the listing broker shall also disclose if asked whether offers were obtained by the listing licensee, by another licensee in the listing firm, or by a cooperating broker. 9.2 Presentation of Offers. The listing broker must make arrangements to present the offer as soon as possible, or give the cooperating broker a satisfactory reason for not doing so. In the event a listing broker will not be participating in the presentation of offers, the listing broker shall clearly indicate this fact in the listing information published by the service. 9.3 Submission of Offers and Counter-Offers. The listing broker shall submit to the seller/landlord all offers until closing unless precluded by law, governmental rule or expressly instructed by the seller/landlord otherwise. The cooperating broker acting for buyer/tenant, shall

submit to buyer/tenant all offers and counter-offers until acceptance. 9.4 Right of Cooperating Broker in Presentation of Offer. The cooperating broker has the right to participate in the presentation of any offer to purchase he secures. The cooperating broker does not have the right to be present at any discussion or evaluation of that offer by the seller and the listing broker. However, if the seller gives written instructions to the listing broker requesting that the cooperating broker not be present when an offer the cooperating broker secured is presented, the cooperating broker shall convey the offer to the listing broker for presentation. In such event, the cooperating broker shall have the right to receive a copy of the seller’s written instructions from the listing broker. Nothing in this section diminishes or restricts the listing broker’s right to control the establishment of appointments for offer presentations 9.5 Change of Compensation Offer by Cooperating Broker. The cooperating broker shall not use the terms of an offer to purchase to attempt to modify the listing broker’s offer of compensation nor make the submission of an executed offer to purchase contingent on the listing broker’s agreement to modify the offer of compensation. However, failure of a cooperating broker to comply with this rule shall not relieve a listing broker of the obligation to submit all offers to the seller as required by Section 9.2 NOTE: Nothing in these rules shall

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preclude the listing broker and cooperating broker from entering into a mutual agreement to change cooperative compensation. 9.6 Cooperating Broker and Subscriber as a Purchaser. If a cooperating broker wishes to acquire an interest in property listed with a listing broker, such contemplated interest shall be disclosed to the listing broker prior to the time an offer to purchase is submitted to the listing broker. 9.7 Physical Presence of Participant or Subscriber. A Participant or Subscriber must be physically present on the property at all times when providing access to a listed property unless the Seller has consented otherwise.

10. REPORTING SALES AND OTHER INFORMATION TO THE SERVICE. 10.1 Reporting of Sales. Listings with accepted offers shall be reported to the MLS or input into the MLS database by the listing broker as “pending” or “back-up” within one (1) business day after the acceptance unless the negotiations were carried on under Section 9.1 (a) or (b), in which case, the cooperating broker shall notify the listing broker of the “pending” or “back-up” status within two (2) business days after acceptance, whereby the listing broker shall then report or input the status change to the MLS within two (2) business days of receiving notice from the cooperating broker. The listing shall be published on the MLS as “pending” or “back-up” with no price or terms prior to the

final closing. Upon final closing, the listing broker shall report or input the listing in the MLS as “sold” and report the selling price within two (2) business days after the final closing date unless the negotiations were carried on under Section 9.1 (a) or (b), in which case, the cooperating broker shall notify the listing broker of the “sold” status and selling price within two (2) business days after the final closing date, whereby the listing broker shall then report or input the status change and selling price to the MLS within two (2) business days of receiving notice from the cooperating broker. Listings which were not input into the MLS as a result of the seller’s instructions may be input into the MLS “sold” data at the listing broker’s option. Additionally, an MLS may accept the reporting of sales, information solely for comp purposes about other properties which were not otherwise eligible for input into the MLS but are located in the MLS’s primary geographic service area and “sold” by a MLS participant and/ or subscriber who represented the underlying property owner (i.e. broker who represented the seller or broker who represented the buyer), as long as such reporting is authorized by the underlying property owner to the broker who represented it, (documentation of which must be presented to MLS, if requested by the MLS), and the circumstances of the representation are disclosed on the Service by the reporting participant or subscriber. Any discretionary submission of sales information must occur within

60 days after close of escrow. Comp listing must include a single photograph displaying the property. 10.1.1 Statuses. The definitions of the stages of property status are set forth as follows: On-Market Statuses n Active (A): A valid listing contract exists. n Active-Contingent On-Market: (Our Rule) Seller requests that the property remain in an “OnMarket” status and is looking for backup offers. Call LO for details. (Inspection periods are contractual, not considered a contingency) n Off-Market Statuses n Contingent Off-Market: (Our Rule) The sale is subject to court or other third party approval. (e.g. REO/Short Sale/Court) n Withdrawn (W): A valid listing contract is in effect, however the property is no longer being marketed. This is an Off-Market status. n Pending (P): The Seller has accepted an offer and is not soliciting further offers through the MLS. This is an Off-Market status. (Inspection periods are contractual, not considered a contingency) n Canceled (C): The listing agreement has been canceled in writing. This is an Off-Market status. n Expired (X): The listing agreement has expired. The time frame of the existing listing contract has run out. This is an Off-Market status. n Sold (S): Escrow has closed. This is an Off-Market status. n Leased (L): The property has been leased. This is an Off-Market BAKERSFIELD ASSOCIATION OF REALTORS®

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status. n Coming Soon: A valid listing contract exists but the listing is not to be included as On-Market until the specified On-Market Date (OMD). Days on Market will not commence because the property is not ready for marketing to the public. This is an Off-Market Status.

public. Participants and subscribers acknowledge the restriction to go from Active back to Coming Soon status. Once said listing is Active, Participant/Subscriber must adhere to current MLS Rules and Regulations regarding status changes as described throughout this section.

10.1.2 Coming Soon Listings. It shall be the responsibility of the broker participant (4.1.1) and real estate subscriber (4.2.1) to follow the rules when placing a property in the Coming Soon section of the multiple listing service (MLS). Broker participant and real estate subscriber shall not only place a property in the coming soon section of the MLS if the participant/subscriber has met necessary criteria for MLS input. Said participant/subscriber is required to input an on-market date (OMD) to proceed in placing a listing in the Coming Soon section of the MLS. The listing will automatically transition from Coming Soon to Active on the OMD. DOM will begin on OMD when transitioned to Active Status. Changes to the OMD are made by sending a new OMD, in writing, to the GEMLS department prior to the current OMD. Listing brokers shall follow Change of Listing Information Rules Section ______). Listings entered into MLS with Coming Soon status shall automatically transition to an on market Active listing. Once the listing moves from Coming Soon to any Active status, it cannot revert back to Coming Soon status. Listings entered as Coming Soon will not be viewable by the general

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10.2 Reporting Cancellation of Pending Sale. The listing broker shall report the cancellation of any pending sale to the service within one (1) business day after cancellation occurs, and the listing shall be reinstated immediately as long as there is still a valid listing.) 10.3 Refusal to Sell. If the seller of any listed property filed with the service refuses to accept a written offer satisfying the terms and conditions stated in the listing, such fact shall be transmitted immediately to the service and to all Participants. 10.4 Removal of Listings for Refusal/Failure to Timely Report Status Changes. The MLS is authorized to remove any listing from the MLS compilation of current listings where the Participant or Subscriber has refused or failed to timely report status changes. Prior to the removal of any listing from the MLS, the Participant and/ or Subscriber shall be advised of the intended removal so the Participant and/or Subscriber can advise his or her client(s).

11. OWNERSHIP OF MULTIPLE LISTING SERVICE COMPILATIONS AND COPYRIGHTS ®

11.1 MLS Compilation Defined. The term “MLS compilation” includes, but is not limited to, the MLS computer data base and all data and content therein, including but not limited to photographs, images (including maps), graphics, audio and video recordings, virtual tours, drawings, descriptions, remarks, narratives, pricing information, statistics and other details or information related to listed property, all printouts of data and content from the MLS computer database, and all MLS publications. The MLS Compilation is protected by all applicable intellectual property laws. 11.2 Active Listing MLS Compilation Defined. Active listing MLS compilation” shall mean that portion of the MLS compilation which includes listings currently for sale, and available for showing, and accepting offers, all other indexes and other information relating to the current listing information. Listings not currently available for sale or showing are to be shown under one of the off-market statuses under Section 10.1.1 of these rules. Listings that are “subject to interior inspection” shall not be in violation of this Section 11.2. 11.3 Comparable Data MLS Compilation Defined. “Comparable data MLS compilation” shall mean that portion of the MLS compilation that includes the off market data, sold and appraisal information regarding properties that are not currently for sale and all indexes and information relating to the sold information compilation. 11.4 Authority to Put Listings in

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MLS Compilation. By submitting any property listing data form to the MLS or inputting listing information into the MLS compilation, Participants and Subscribers represent that they have been authorized to grant and also thereby do grant authority for the Corporation to include the property listing data in its copyrighted MLS compilation. By submitting any property listing data form to the MLS, Participants and Subscribers represent that they have been authorized to report information about the sales, price and terms of a listing, have authority to grant and also thereby does grant authority for the Corporation to include the sold information in its copyrighted MLS compilation. 11.5 Photographs/Images on the MLS. By submitting photographs/ images to the MLS, the Participant and/or Subscriber represents and warrants that he or she either owns the right to reproduce and display such photographs or has procured such rights from the appropriate party, and has the authority to grant and hereby grants the MLS and the other Participants and Subscribers the right to reproduce and display the photographs in accordance with these rules and regulations. Use of photographs by a subsequent listing agent requires prior written authorization from the originating listing agent or other appropriate party with the legal right to reproduce and display such photographs. Except by the MLS for purposes of protecting its rights under Section 11.6, branding of

photographs, virtual tours or any other photographic representation with any information or additional images, including but not limited to photos displaying “for sale” signs posted on the property, is prohibited. 11.6 Copyright Ownership. All right, title, and interest in each copy of every MLS compilation created and copyrighted by the Corporation, and in the copyrights therein, shall at all times remain vested in the Corporation. The Corporation shall have the right to license such compilations or portions thereof to any entity pursuant to terms agreed upon by the Board of Directors. 11.7 Licensing of MLS Compilations. Each Participant shall be entitled to license from the Corporation the number of copies of each MLS compilation of active listing information sufficient to provide the participant and subscriber with one copy of such MLS compilation. Participants and subscribers shall acquire by such lease only the right to use the MLS compilations in accordance with these rules. Clerical users may have access to the information solely under the direction and supervision of the participant or subscriber. Clerical users may not provide any MLS compilation or information to persons other than the participant or the subscriber under whom the clerical user is registered. 11.8 Database Preservation. No data may be removed from the MLS compilation other than by the service. Although a listing may be removed from display in the

MLS compilation of current listing information, all data submitted to the MLS will remain in the database for historical and other purposes approved by the service. 11.9. Removal of and Responsibility for Content. The MLS has the right, but not the obligation, to reject, pull down, restrict publication of, access to or availability of content the MLS in good faith considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, unlawful or otherwise objectionable. Participants and Subscribers remain solely responsible and liable for the content they provide. In no case will any monitoring or removal of Participants’ or Subscribers’ content by the MLS make it responsible or liable for such content. 11.10. Indemnification; Limitation of Liability. Participant and Subscriber shall indemnify and hold harmless the service for any claims, costs, damage or losses, including Reasonable attorney fees and court costs, incurred by the MLS resulting from or arising out of any content Participant and/ or Subscriber submit to or in any way wrongfully reproduce from the Service. In no event will the MLS be liable to any MLS Participant, Subscriber or any other party for any indirect, special or consequential damages arising out of any information published in the MLS and all other damages shall be limited to an amount not to exceed the MLS fees paid by the listing broker.

12. PROHIBITIONS BAKERSFIELD ASSOCIATION OF REALTORS®

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AND REQUIREMENTS. 12.1 Notification of California Department of Real Estate (DRE) or California Office of Real Estate Appraisers (OREA) Action. Participants and Subscribers are required to notify the MLS within one (1) business day of any final action taken by the BRE or the OREA against the Participant, Subscriber or any licensee affiliated with the Participant or Subscriber including, but not limited to any final decisions restricting, suspending or revoking a real estate license or appraiser’s certification or license of a Participant, the Participant’s firm or corporation under which the Participant or Subscriber acts, or any licensee affiliated with the Participant or the Participant’s firm or licensee or Appraiser who was affiliated with the Participant or Participant’s firm at the time of the underlying act. 12.2 Violations of the Law. If a Participant, Subscriber, Appraiser or a licensee affiliated with a Participant or Subscriber commits a felony or a crime involving moral turpitude or violates the Real Estate Law or the laws relating to Appraisers, the Participant and Subscriber shall be in violation of this section. However, a Participant or Subscriber shall not be found to have violated this section unless the Participant, Subscriber, Appraiser or salesperson licensed to the Participant has been convicted, adjudged, or otherwise recorded as guilty by a final judgment of any court of competent jurisdiction of (1) a felony, or (2) a crime involving

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moral turpitude, or (3) on a determination by any court of competent jurisdiction, or official of the State of California authorized to make the determination, that the Participant or Subscriber violated a provision of the California Real Estate Law or a Regulation of the Real Estate Commissioner or law relating to Appraisers.

Participants and Subscribers will not attempt to persuade the seller to breach the listing agreement or to interfere with the listing broker’s attempts to market the property. This section does not preclude solicitation of listings under circumstances otherwise permitted under Article 16 of the NAR Code of Ethics, its Standards of Practice and its Case Interpretations.

12.3 Supervision of Licensees and Appraisers. In addition to the notification requirements of paragraph 12.1, a participant may not allow any licensee, under the Participant’s license, whose license has been revoked, suspended or restricted by the BRE to use the MLS in any manner while the BRE discipline is in effect except that the licensee may use the MLS under a restricted license providing such use is consistent with and does not violate such license restrictions.

12.5 Misuse of Remarks. Information in the public remarks shall only relate to the marketing, description and condition of the property. No contact information identifying the Listing Broker/ Agent is permitted, including names, phone or fax numbers, email addresses or website addresses, (including virtual tours and transaction tracking URLs) No showing instructions are permitted, including references to lockbox, alarm, gate or other security codes, or the occupancy of the property (a statement that the property shall be delivered vacant is not a violation of this section). No information directed toward real estate agents or brokers, including compensation or bonuses offered to cooperating brokers may be shown in public remarks. No information other than the marketing, description and condition of the property is permitted. Participants and Subscribers may not use the remarks in a property data profile sheet or listing submitted to the MLS or inputted directly into the MLS database for purposes of disparaging other real estate agents or conveying information about other offices or for conveying any other information

12.4 Solicitation of Listing Filed With the MLS. Participants and Subscribers shall not solicit a listing filed with the service unless such solicitation is consistent with Article 16 of the NAR Code of Ethics, its Standards of Practice and its Case Interpretations. The purpose of this section is to encourage sellers to permit their properties to be filed with the service by protecting them from being solicited through unwanted phone calls, visits and communications, prior to expiration of the listing, by brokers and salespersons seeking the listing upon its expiration. This section is also intended to encourage brokers to participate in the service by assuring them that other

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that does not directly relate to the marketing of the listing. By submitting remarks to the MLS, Participant and/or Subscriber represents and warrants he or she has the authority to grant, and hereby grants the MLS and the other Participants and Subscribers the right to reproduce and display the remarks in accordance with these rules. Copying of remarks by a subsequent listing agent for use in his or her own listing requires prior written authorization from the originating listing agent or other appropriate party with the legal right to reproduce and display such remarks. 12.6 “For Sale” Signs. Only the “For Sale” signs of the listing broker may be placed on the property. 12.7 “Sold” Signs, Use of the Term “Sold,” and Advertising Sold Listings Only Broker Participants or Real Estate Subscribers who participated in the transaction as the listing broker or cooperating broker may claim to have “sold” the property. Prior to closing, a cooperating broker may post a “sold” sign on a property only with the consent of the listing broker. This section does not, however, prohibit any broker from advertising a permissible subset of allowable listing content regarding the properties that have sold in a neighborhood after the information regarding the properties has been published as long as the advertisement does not imply the agent was involved in the transaction unless such is the case and as long as the advertisement otherwise presents

a “true picture” as is meant under Article 12 of the NAR Code of Ethics, its Standards of Practice and its Case Interpretations. Allowable listing content may include only those portions of the MLS compilation consisting of the following: a single photograph displaying the property, property address (and whether attached or detached), status, price, number of bedrooms, number of bathrooms, number of garages (and whether attached or detached), square footage, lot size, year built, tract or development name, and if there is a pool. Display of other fields as well as confidential information and photographs, is prohibited. 12.8 Photos: The input of a minimum of one MLS photo is required for all Residential and Residential Income (1 – 4 units) property categories (unless a Seller’s Request to Withhold photo is filed with the MLS at time listing is submitted), or one graphic image for new home construction, accurately displaying the listed property. If only one photo is input, it must be a front view of the subject house. Photo must be uploaded within one (1) business day of entry date (excepting weekends, holidays and postal holidays per MLS Rule 14.4). 12.9 Advertising of Listing Filed With the MLS. A listing shall not be advertised by any Participant or Subscriber, other than the listing broker, without the prior consent of the listing broker except as provided in Section 12.17 relating to the Printed Neighborhood Market Report and Sections 12.15 and 12.17 relating to display of listings on the internet.

12.9.1 Advertising of Listing in Printed Neighborhood Market Report Subject to the conditions set forth in (a) through (c) below, as well as throughout these Rules, Participants and Subscribers may include the listings of others in their printed “Neighborhood Market Reports.” The “Neighborhood Market Report” is defined as an advertising and/or information sheet (typically appearing in the form of a postcard, flier or newsletter) compiled by and /or for use by a licensee which sets forth a list of hone activity in a particular neighborhood area. Advertising appearing in newspapers, magazines or other classified forms is not included in the definition of “Neighborhood Market Report”, and is not authorized by this rule Rule 12.9.1. a. Consent The listing brokers’ consent for such advertising is presumed, in satisfaction of Rule 12.8 unless a listing broker affirmatively notifies the MLS 7th at the listing broker refuses to permit others to advertise his listing in the “Neighborhood Market Report” (i.e. “Opts-out”) either on a blanket or listing by listing basis. Listing brokers that refuse to permit other Broker Participants or R.E. Subscribers to advertise their listings on a blanket basis may not display the listings of the other brokers’ listings in their own “Neighborhood Market Reports”. Even where listing brokers have given blanket authority for other Broker Participants and R.E. Subscribers to advertising their listings in the “Neighborhood BAKERSFIELD ASSOCIATION OF REALTORS®

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Market Report”, such consent may be withdrawn on a listingby-listing basis where the seller has prohibited it. Participants and Subscribers are not permitted to include listings in their Neighborhood Market Report from which listing broker has opted out and will be responsible for verifying that they have permission to advertise all listings contained in their Neighborhood Market Reports. b. Listing Attribution All listings in the “Neighborhood Market Report” must identify the name of the listing firm(s) and the name of the listing agent(s) in a manner designed to easily identify such listing firm(s) or agent(s). Such identification shall be in a reasonably prominent location and in a readily visible color and typeface not smaller than the median used in the display of listing data. c. Allowable Listing Content Broker Participants and R.E. Subscribers may include only those portion of the MLS compilation consisting of the following: property address (and whether attached or detached), status, price, number of bedrooms, number of bathrooms, number of garages (and whether attached or detached), square footage, lot size, year built, tract or development name, and if there’s a pool. Display of other fields, as well as confidential information and photographs, is prohibited. 12.10 Limitations on Use of Association or MLS Information in Advertising. Except as provided in Sections 12.7, 12.8, 12.11 and 12.15, truthful use of information from the

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MLS compilation of current listing information, from the Corporation’s “statistical report,” or from any “sold” or “comparable” report of the Corporation or MLS for public mass media advertising by an MLS Participant or Subscriber or in other public representations for purposes of demonstrating market share is not prohibited. However, any print or non-print forms of advertising or other forms of public representations must clearly demonstrate the period of time over which such claims are based and must include the following, or substantially similar, notice in a manner readily visible to consumers but not less than 7pt. type: “Based on information from the Golden Empire MLS, Inc. for the period (date) through (date). All data, including measurements and calculations of area, is obtained from various resources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information. 12.11 False or Misleading Advertising and Representations: True Picture Standard of Conduct. Participants and Subscribers may not engage in false or misleading advertising, including but not limited to, advertisements or representations regarding the Participant’s or Subscriber’s relationship to the service, about the service itself, or about any property listed with the service. MLS Participants and Subscribers

shall present a true picture in their advertising and representations to the public, including the URLs and domain names they use, and Participants and Subscribers may not: a. Engage in deceptive or unauthorized framing of real estate brokerage websites; b. Manipulate (e.g. presenting content developed by others) listing content in any way that produces a deceptive or misleading result); or c. Deceptively use metatags, keywords or other devices/ methods to direct, drive or divert Internet traffic, or to otherwise mislead consumers. 12.12 Use of MLS Information. In recognition that the purpose of the MLS is to market properties and offer compensation to other Broker Participants and Real Estate Subscribers for the sole purpose of selling the property, and that sellers of properties filed with the service have not given permission to disseminate the information for any other purpose, Participants and Subscribers are expressly prohibited from using MLS information for any purpose other than to market property to bona fide prospective purchasers or to support market evaluations or appraisals as specifically allowed by Sections 12.14, 12.15, 12.16 and 12.17. Any use of MLS information inconsistent with these Sections is expressly prohibited. Nothing in this Section, however, shall limit the Corporation from entering into licensing agreements with MLS Participants and Subscribers or other third parties for use of the MLS information.

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12.13 Confidentiality of MLS Information. Any information provided by the service to the Participants and Subscribers shall be considered and treated as confidential by Participants and Subscribers and shall be for the exclusive use of the Participants and Subscribers for purposes described in Sections 2, 12.7, 12.11, 12.14, 12.15, 12.16, 12.17 and this section. Participants and Subscribers shall at all times maintain control over and responsibility for each copy of any MLS compilation leased to them by the Corporation and shall not distribute any such copies to persons other than Participants and Subscribers. Participants and Subscribers are responsible for the security of their passcodes and shall not give or allow use of or make available their pass codes to any person. Participants and Subscribers may reproduce or display the information as provided in these rules. 12.13.1 Clerical Users. Clerical users may have access to MLS information solely under the direction and supervision of the Participant o Subscriber. Clerical users may not provide any MLS information to persons other than the Participant or Subscriber under whom they are registered. Access by clerical users to the data base is solely for clerical and administrative functions for the Participant or Subscriber under whom the clerical user is registered. 12.14 Access to Comparable and Statistical Information. A.O.R. members who are actively engaged in real estate brokerage,

management, mortgage financing, appraising, land development, or building, but who do not participate in the service, are nonetheless entitled to receive, by purchase or lease, all information other than current listing information that is generated wholly or in part by the MLS including comparable” information, “sold” information, and statistical reports. This information is provided for the exclusive use of A.O.R. members and individuals affiliated with A.O.R. members who are also engaged in the real estate business and may not be transmitted, retransmitted or provided in any manner to any unauthorized individual, office or firm except as otherwise specified in these rules and regulations. 12.15 Display. Subject to Sections 12.16.1 and 12.17, and 19 Broker Participants and Real Estate Subscribers shall be permitted to display the MLS compilation in either electronic or printed format to specifically identified and bona fide prospective purchasers only in conjunction with their ordinary business activities of attempting to locate ready, willing and able buyers for the properties described in said MLS compilation. Broker Participants and Real Estate Subscribers shall be permitted to display the MLS compilation in either electronic or printed format to specifically identified and bona fide sellers or prospective sellers only in conjunction with their ordinary business activities in listing properties. Appraiser Participants and Appraiser Subscribers shall be permitted to

display the MLS compilation to the person requesting the appraisal only in conjunction with their ordinary business activities of producing a written appraisal. Such displays under this section shall be only in the immediate presence of the MLS Participant or Subscriber. 12.15.1 Clerical Users. Clerical users are expressly prohibited from displaying or distributing MLS information to anyone other than the Participant or Subscribers under whom the clerical user is registered. 12.16 Reproduction. “Reproduction” shall include, but not be limited to, making photocopies, computer printouts, electronic transfers (including email), or downloading of MLS data or compilations. Participants and Subscribers or their affiliated licensees shall not reproduce any MLS compilation or any portion thereof except as provided in Sections 12.15 and 12.17 and in the following limited circumstances: 12.16.1 Copies to Prospective Purchasers. Broker Participants and Real Estate Subscribers may reproduce from the MLS compilation, and distribute to prospective real estate purchasers, copies of those portions of the MLS compilation consisting only of a description of the property, including the address, features, financing and price. Such “client copies” shall also comply with the following: a. Permissible MLS data may be augmented with additional data BAKERSFIELD ASSOCIATION OF REALTORS®

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not otherwise prohibited from display, provided the source of any additional data is clearly identified. b. All listings provided shall identify the name of the listing firm and the listing broker or agent in a readily visible color, in a reasonably prominent location, and in typeface not smaller than the median typeface used in the display of listing data. c. No more than 500 current listings and 500 sold listings may be provided in response to any inquiry. d. A disclaimer statement shall be made in a manner readily visible to consumers but not less than 7 pt. type, that contains the following, or substantially similar, notice: â&#x20AC;&#x153;Based on information from the Golden Empire MLS, Inc. for the period (date) through (date). All data, including measurements and calculations of area, is obtained from various resources and has not been, and will not be, verified by broker or MLS. All information

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should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information. 12.16.2 Information Prohibited from Reproduction/Confidential Fields Unless the Participant or Subscriber obtains prior written consent from the listing broker, the information reproduced pursuant to this section shall not include the following: a. Property ownerâ&#x20AC;&#x2122;s name, phone number, and address (if different than the listed property); b. Instructions or remarks intended for cooperating brokers, including but not limited to showing instructions or security references (ex: lock box, burglar alarm or security system, vacancies) regarding the listed property; c. Type of listing; d. Compensation or bonuses offered to cooperating brokers. e. Expired, withdrawn listings. f. Other information that

goes beyond a description of the property. 12.16.3 Copies for Appraisals. Participants and Subscribers may reproduce from the MLS compilation, and attach to an appraisal as supporting documentation copies of those portions of the MLS compilation consisting only of such information on properties necessary to support a written appraisal or estimate of value on a particular property. 12.16.4 Downloading into Computers. Participants and Subscribers may download MLS information into a computer or computer system as long as: a. Access to the computer or computer system receiving the information is strictly limited to authorized Participants, Subscribers and Clerical Users as defined in these rules; and b. The information is only retransmitted to the Participants, Subscribers and clerical users authorized to access the computer

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or computer system by these rules; and c. The information is not reformatted or used to create another product except as may be used by the participant or subscriber who downloaded the data and such use strictly complies with sections 12.7, 12.11, 12.15, and 12.16. 12.16.5 Sold Information. Individuals legitimately in possession of current listing information, “sold” information, “comparables” or statistical information may utilize such information to support valuations on particular properties for clients and customers. Any MLS content in data feeds available to Participants for real estate brokerage purposes, must also be available to Participants or valuation purposes, including automated valuations. MLSs must either permit use of existing data feeds, or create a separate data feed to satisfy this requirement, MLSs may require Participants who will use such data feeds to pay the reasonably estimated costs incurred by the MLS in adding or enhancing its downloading capacity for this purpose. Information deemed confidential may not be used as supporting documentation. Any other use of such information is unauthorized and prohibited by these rules and regulations. 12.17 Use of Listing Information on Internet also known as Internet Data Exchange (“IDX”)]. “Internet Data Exchange” (“IDX”) is a means by which listing brokers permit limited electronic display and delivery of their active, pending and sold listing data, in

accordance with the IDX rules set forth herein, by other participating Broker Participants and R.E. Subscribers via the following authorized mediums under said Broker Participants and R.E. Subscribers control: websites, mobile apps and audio devices. As used throughout this policy, “display” includes “delivery” of such listings. a. Authorization. Subject to paragraphs (b) through (s) below, and notwithstanding anything in these rules and regulations to the contrary, Broker Participants and R.E. Subscribers may electronically display aggregated MLS active, pending and sold listing information through either downloading or by framing such information on the MLS or association public access website (if such a site is available). The MLS’s download will include publicly accessible sold listing data starting from January 1, 2012. “Publicly accessible” sold information as used in the IDX policy and rules, means data that is available electronically or in hard copy to the public from city, county, state and other government records. b. Consent. The listing brokers’ consent for such internet display is presumed, in satisfaction of Rule 12.9, unless a listing broker affirmatively notifies the MLS that the listing broker refuses to permit display on either on a blanket or on a listing-by- listing basis. Listing brokers that refuse to permit other Broker Participants or R.E. Subscribers to display their listing information on a blanket basis may not display MLS active

listing information of other brokers’ listings. Even where listing brokers have given blanket authority for other Broker Participants and R.E. Subscribers to partake in IDX display of their listings, such consent may be withdrawn on a listing-by-listing basis where the seller has affirmatively directed that their listing or their property address not appear on the internet or other electronic forms of display or distribution. c. Control. Broker Participants and R.E. Subscribers may only partake in IDX display on websites, applications for mobile devices and audio devices which they control. Under IDX policy, “control” means that Broker Participants and R.E. Subscribers must have the ability to add, delete, modify and update information as required by the IDX policy. All displays of IDX listings must also be under the actual and apparent control of the Broker Participant and/or R.E. Subscriber, and must be presented to the public as being that Broker Participant’s and/or R.E. Subscriber’s display. Actual control requires that Broker Participants and R.E. Subscribers have developed the display, or caused the display to be developed for themselves pursuant to an agreement giving the Broker Participant and/or R.E. Subscriber authority to determine what listings will be displayed, and how those listings will be displayed. Apparent control requires that a reasonable consumer receiving the Broker Participant’s and/ or R.E. Subscriber’s display will understand the display is the Broker Participant’s and/or BAKERSFIELD ASSOCIATION OF REALTORS®

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R.E. Subscriber’s, and that the display is controlled by the Broker Participant and/or R.E. Subscriber. d. Display Content. Broker Participants and R.E. Subscribers shall not display confidential information fields, as determined by the MLS in the MLSs’ sole discretion, such as that information intended for cooperating brokers rather than consumers. e. Listing Attribution. All IDX listing displays shall identify the name of the listing firm and the name of the listing agent in a manner designed to easily identify such listing firm or agent. Such identification shall be in a reasonably prominent location and provide clear, conspicuous written or verbal identification of the name of the listing firm and listing agent. Displays of minimum information (e.g. a one-line or thumbnail search result, text messages, “tweets”, etc. of two hundred (200) characters or less) are exempt from this requirement but only when linked directly to a display that includes all required disclosures. Audio delivery of listing content is exempt from this disclosure requirement only when all required disclosures are subsequently delivered electronically to the registered consumer performing the property search or linked to through the device’s application. f. Modifications and Augmentations. Broker Participants and R.E. Subscribers shall not modify or manipulate information relating to other participants listings. Brokers Participants and R.E. Subscribers may augment their IDX display of

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MLS data with applicable property information from other sources to appear on the same webpage or display, clearly separated by the data supplied by the MLS. The source(s) of the information must be clearly identified in the immediate proximity to such data. This requirement does not restrict the format of MLS data display of fewer than all of the available listings or fewer authorized fields. g. Source and Update. Information displayed shall indicate the MLS as the source of the information being displayed and the most recent date updated. Displays of minimum information (e.g. a oneline or thumbnail search result, text messages, “tweets”, etc. of two hundred (200) characters or less) are exempt from this requirement but only when linked directly to a display that includes all required disclosures. Audio delivery of listing content is exempt from this disclosure requirement only when all required disclosures are subsequently delivered electronically to the registered consumer performing the property search or linked to through the device’s application. Broker Participants and R.E. Subscribers shall update all downloads and refresh all MLS downloads and IDX displays automatically fed by those downloads at least once every 12 hours; h. Usage Limitations. Broker Participants and R.E. Subscribers shall indicate on their displays that the information being provided is for consumers’ personal, noncommercial use and may not be used for any purpose other than to identify prospective properties

consumers may be interested in purchasing. Displays of minimum information (e.g. a one-line or thumbnail search result, text messages, “tweets”, etc. of two hundred (200) characters or less) are exempt from this requirement but only when linked directly to a display that includes all required disclosures. Audio delivery of listing content is exempt from this disclosure requirement only when all required disclosures are subsequently delivered electronically to the registered consumer performing the property search or linked to through the device’s application. i Display Purpose. Broker Participants and R.E. Subscribers may not use IDX provided listings for any purpose other than display as provided in these rules. This does not require Broker Participants and R.E. Subscribers to prevent indexing of IDX listings by recognized search engines. j. Restricted Display. Listings, including property addresses, can be included in IDX display except where sellers who have directed their listing brokers to withhold their listing or the listing’s property address from all display on the Internet (including, but not limited to, publicly–accessible websites or VOWs). k. Selective Listing Display. Not all listings from the MLS must be displayed as long as any exclusions from display on Broker Participants’ and R.E. Subscribers’ IDX sites are based on objective criteria, e.g. type of property, listed price, listed status or geographical location. Selection of listings displayed on any IDX site must be independently

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made by each Participant. l. Restricted Access and Distribution. Sharing of the MLS compilation with any third party not authorized by the MLS is prohibited. Except as provided in the IDX policy and these rules, an IDX site or a Participant or user operating an IDX site or displaying IDX information as otherwise permitted may not distribute, provide or make any portion of the MLS database available to any person or entity. m. Brokerage Identification. Any IDX display controlled by a Broker Participant or R.E. Subscriber’s must provide clear identification of the name of the brokerage firm under which they operate. n. Co-Mingling. A Broker Participant or R.E. Subscriber may co-mingle the listings through IDX from this MLS with listings from other MLS sources on its IDX display, provided all such displays are consistent with these IDX rules, and the MLS Participant (or MLS Subscriber) holds participatory rights in those MLSs. Co-mingling is the ability for a visitor to the website to execute a single property search of multiple IDX feeds resulting in the display of IDX information from each of the MLSs on a single search results page; and that Participants may display listings from each IDX feed on a single webpage or display. Listings obtained from other MLSs must display the source from which each such listing was obtained. Displays of minimum information (e.g. a one-line or thumbnail search result, text messages, “tweets”, etc of two hundred (200) characters or less) are exempt from this

requirement but only when linked directly to a display that includes all required disclosures. Audio delivery of listing content is exempt from this disclosure requirement only when all required disclosures are subsequently delivered electronically to the registered consumer performing the property search or linked to through the device’s application. o. Third Party Comments and Automated Value Estimates. Any IDX display controlled by a Broker Participant or R.E. Subscriber that (a) allows third-parties to write comments or reviews about particular listings or displays a hyperlink to such comments or reviews in immediate conjunction with particular listings, or (b) displays an automated estimate of the market value of the listing (or hyperlink to such estimate) in immediate conjunction with the listing, shall disable or discontinue either or both of those features as to the seller’s listing at the request of the seller. The listing broker or agent shall communicate to the MLS that the seller has elected to have one or both of these features disabled or discontinued on all displays controlled by Broker Participants and R.E. Subscribers. Except for the foregoing and subject to section p. below, a Broker Participant’s or R.E. Subscriber’s IDX display may communicate the Broker Participant’s or R.E. Subscriber’s professional judgment concerning any listing. Nothing shall prevent an IDX display from notifying its viewers that a particular feature has been disabled at the request of the seller.

p. Making Corrections. Broker Participants and R.E. Subscribers shall maintain a means (e.g., e-mail address, telephone number) to receive comments about the accuracy of any data or information that is added by or on behalf of Broker Participants and R.E. Subscribers beyond that supplied by the MLS and that relates to a specific property. Broker Participants and R.E. Subscribers shall correct or remove any false data or information relating to a specific property upon receipt of a communication from the listing broker or listing agent for that property explaining why the data or information is false. However, the Broker Participants and R.E. Subscribers shall not be obligated to remove or correct any data or information that simply reflects good faith opinion, advice, or professional judgment. q. Search Result Limitation. Broker Participants and R.E. Subscribers shall limit the number of listings that a viewer may view, retrieve, or download to not more than 500 in response to any inquiry. r. Advertising. Deceptive or misleading advertising (including co-branding) on pages displaying IDX-provided listings is prohibited. For purposes of these rules, cobranding will be presumed not to be deceptive or misleading if the Broker Participant’s and/or R.E. Subscriber’s logo and contact information is larger than that of any third party. s. Disclaimer. Broker Participants and R.E. Subscribers shall indicate on their displays, in a manner readily visible to consumers BAKERSFIELD ASSOCIATION OF REALTORS®

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but not less than 7pt type, the following, or substantially similar, notice: Based on information from the _____________________________ /Association of REALTORS® (alternatively, from the ______________________ MLS) as of ______ (date the AOR/MLS data was obtained). All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information. Displays of minimum information (e.g. a one-line or thumbnail search result, text messages, “tweets”, etc of two hundred (200) characters or less) are exempt from this requirement but only when linked directly to a display that includes the required disclosure. Audio delivery of listing content is exempt from this disclosure requirement only when all required disclosures are subsequently delivered electronically to the registered consumer performing the property search or linked to through the device’s application. 12.17.1 Notification by Authorized Participants and Subscribers. Broker Participants and R.E. Subscribers partaking in the display of MLS active listing information of other brokers’ listings pursuant to Section 12.17 must notify the MLS before displaying said MLS active listing information and must make their

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website directly accessible to the MLS and other MLS Participants for purposes of monitoring/ ensuring compliance with applicable rules and policies. 12.17.2 Right to Charge for Download. The MLS has the right to charge the costs of adding or enhancing its downloading capacity to Participants and Subscribers who request downloading of listing information pursuant to Section 12.17. 12.17.3 Listing Broker’s Right to Opt Out of Internet Advertising of MLS Information. If the Corporation advertises MLS information on the internet or licenses MLS information for advertising on the internet, the listing broker shall have the right to opt out of such advertising in accordance with the MLS’s procedures for opting out. The listing broker also shall have the right to refuse to have listings displayed on a blanket basis or on a listing by listing basis in accordance with Section 12.17 by affirmatively notifying the MLS in accordance with the MLS procedures for opting out. Notwithstanding anything in these rules and regulations to the contrary, the Corporation reserves the right to determine whether to provide internet advertising services and whether such services are to be made available to persons and entities other than Participants and Subscribers. 12.18. Website Name and Status Disclosure. MLS Participants’ firm websites shall disclose the firm’s name

and state(s) of licensure in a reasonable and readily apparent manner. Websites of Subscribers affiliated with a Participant’s firm shall disclose the firm’s name and the Subscriber’s state(s) of licensure in a reasonable and readily apparent manner. 12.19 Use of the Terms MLS and Multiple Listing Service. No MLS Participant or Subscriber shall, through the name of their firm, their URLs, their e-mail addresses, their website addresses, or in any other way represent, suggest, or imply that the individual or firm is an MLS, or that they operate an MLS. Participants and Subscribers shall not represent, suggest, or imply that consumers or others have direct access to MLS databases, or that consumers or others are able to search MLS databases available only to Participants and Subscribers. This does not prohibit Participants and Subscribers from representing that any information they are authorized under MLS rules to provide to clients or customers is available on their websites or otherwise.

13. LOCKBOXES. 13.1 Eligibility for Lockboxes. MLS participants and subscribers are eligible for lockbox privileges if they otherwise qualify under this section. Clerical users are not eligible for lockbox privileges. MLS Participants and Subscribers shall be eligible to hold a lockbox key (defined as a physical or electronic key, programmer or other devise by which a lockbox can be opened) provided: a. The key holder signs a lease

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agreement with the lock box/key vendor. b. The Participant to which the key holder is licensed remains eligible for MLS Services. c. The key holder continues to comply with all MLS rules relating to lockbox keys. d. The key holder and Participant to whom the key holder is licensed remain eligible for MLS services. 13.2 Key Use and Service. Keys may not be used under any circumstances by anyone other than the key holder, including, but not limited to, lending, borrowing or sharing keys with others. The MLS is not obligated to provide service on keys or lock boxes to individuals who are not the registered lessee or owner of the component. Keys may only be used for the purpose of facilitating the sale or lease of a listed property. 13.2.1 Use of Lockbox Contents. Participants and Subscribers shall at all times follow the showing instructions published in the MLS. Participants and Subscribers shall not remove contents of the lockbox for purposes other than showing the home and shall promptly return the contents to the lockbox upon exiting the property. Participants and Subscribers shall keep lockbox contents in their possession at all times after removal from the lockbox. The lockbox and/or contents shall not be removed from the property site without prior consent from the listing agent. 13.3 Accountability. Key holders must account for keys at the time of any inventory

conducted by the MLS or at any time requested by the A.O.R. Key holders who cease to participate or subscribe to the MLS shall return all key(s) in their possession to the MLS. Failure to return a key(s) will subject the key holder and/or the key holder’s participant to fines and penalties and to being responsible for all costs incurred by the MLS to secure the lock box key system as a result of the failure to return the key(s), in addition to any fees or penalties in accordance with the Supra lease agreement. 13.4 Deemed Unaccountable. Keys shall be deemed unaccounted for if a key holder refuses or is unable to demonstrate that the key is within the key holder’s physical control. 13.5 Written Authority. Participants and Subscribers shall not place a lockbox on a property without written authority from the seller and occupant if other than the seller. Inclusions in MLS compilations cannot be required as a condition of placing lockboxes on listed property. 13.6. Lockbox Type Requirements. If any lockbox or other device giving access to OnMarket listed property for real estate professionals and/or service providers is authorized by the seller and/or occupant and is placed on or present on property listed through the Service, such lockbox or device must be one that is approved by the MLS where the listing has been submitted. The authorized lockboxes sold by, leased by or otherwise offered

through the local Association or MLS where the listing is submitted have been approved by the MLS. (C.A.R.’S RULE) More than one lockbox or access device may be used on a property as long as one of them is MLS-approved where the listing is submitted. 13.7 Listing Broker’s Permission. No Participant or Subscriber may enter a property with or without a lockbox without the listing broker’s permission. Such permission may be granted by the listing broker by specifying permission to use the lockbox through the MLS, or when appointment made. Appraiser Participants are expressly prohibited from using lockbox keys to enter a property without either the owner’s or listing broker’s permission. 13.8 Reporting Missing or Unaccountable Keys. Key holders and their Participants shall immediately report lost, stolen or otherwise unaccountable keys to the MLS immediately upon discovery. 13.9 Rules Violations. Failure to abide by rules relating to lockboxes and keys as set forth in this section may result in discipline as provided in sections 14 and 15 of these rules, in addition to loss of or restriction on all lockbox and key privileges. 13.10 Right to Limit Access. The MLS reserves the right to refuse to issue, activate or inactivate a key or terminate an existing key lease agreement or otherwise limit access to lockboxes with respect to any participant or subscriber if, in its sole discretion, it determines the BAKERSFIELD ASSOCIATION OF REALTORS®

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security of the system would be compromised by issuing such keys or granting access to lockboxes. 13.11 Removal. The lockbox must be removed within five (5) business days after the close of escrow or expiration/ cancellation of the listing.

14. VIOLATIONS OF RULES AND REGULATIONS. 14.1 Grounds for Disciplinary Action and Sanctions. After a hearing by a hearing panel as provided in the California Code of Ethics and Arbitration Manual, the Board of Directors may take disciplinary action and impose sanctions against any Participant and Subscriber: a. For violation of any MLS rule; b. On the participant’s or subscriber’s being convicted, adjudged, or otherwise recorded as guilty by a final judgment of any court of competent jurisdiction of (1) a felony, or (2) a crime involving moral turpitude, or (3) on a determination by any court of competent jurisdiction, or official of the State of California authorized to make the determination, that the participant or subscriber violated a provision of the California Real Estate Law or a Regulation of the Real Estate Commissioner or the laws relating to appraisers or a regulation of the OREA. c. For any violation of subsection (a) by any person, including but not limited to a clerical user or a salesperson, who is not a participant or subscriber but is employed by or affiliated with such participant or subscriber and was providing real estate

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related services within the scope of the participant’s or subscriber’s license. Lack of knowledge by the participant or subscriber of such salesperson’s conduct shall only go to mitigation of discipline imposed. d. For any violation of the NAR Code of Ethics while a member of any Association of REALTORS®. 14.2 Sanctions. Sanctions or disciplinary action for violation of an MLS Rule may consist of one or more of those specified in the California Code of Ethics and Arbitration Manual. 14.3 Citations. The Board of Directors may implement a schedule of fines for certain MLS rules violations and direct staff to issue citations for the specified MLS rules violations and implement a procedure whereby the participant and subscriber receiving the citation may either pay the amount specified on the citation or request a full hearing in accordance with the procedures set forth in the California Code of Ethics and Arbitration Manual. 14.4. Time for Performance. If the date on which any performance is required under any MLS Rule is other than a business day, then such performance shall be required as of the next following business day.”

15. PROCEDURES FOR MLS RULES HEARINGS. All MLS rules hearings shall be processed in accordance with the California Code of Ethics and Arbitration Manual as from time to time amended which is hereby incorporated by reference. Failure

to abide by the procedures of the California Code of Ethics and Arbitration Manual shall be a violation of these MLS rules.

16. ARBITRATION 16.1 Mandatory Arbitration. By becoming and remaining a participant or subscriber in the MLS, each Participant and Subscriber agrees to submit disputes arising out of the real estate business which also arises out of, or is in conjunction with, any listing filed with the MLS or any appraisal, to binding arbitration with any other Participant or Subscriber of this MLS, or Participants or Subscribers of any other MLS who are authorized to have access to this MLS under Section 6 of these rules. Such arbitrations shall be governed by the California Code of Ethics and Arbitration Manual as from time to time amended which is hereby incorporated by reference. This shall be deemed an arbitration agreement within the meaning of Part 3, Title 9 of the California Code of Civil Procedure. Failure to submit to arbitration and abide by the arbitration award, including but not limited to timely payment of the arbitration award as provided herein shall be a violation of these MLS rules and subjects Participants and Subscribers to possible suspension from the MLS and/or other penalties. 16.2 Other Arbitration Agreements. Notwithstanding any other provision of these rules, if any Participant or Subscriber enters into an agreement (either before

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or after a dispute arises) with another Participant or Subscriber to arbitrate a dispute utilizing non-Association facilities, such persons are not bound to arbitrate the dispute covered by such agreement under these rules utilizing A.O.R. facilities. 16.3 Arbitration between Association Members. Notwithstanding any other provision of these rules, a. If all disputants are members of the same Association of REALTORS®, they shall arbitrate at that Association of REALTORS® in accordance with its rules. b. If the disputants are members of different Associations of REALTORS®, they shall arbitrate in accordance with any applicable regional or shared professional standards agreement. In the absence of such an agreement, the disputants remain obligated to arbitrate at the California Association of REALTORS® (“C.A.R.”) in accordance with the C.A.R. Interboard Arbitration Rules. 16.4. Arbitration Involving Nonassociation Members. Notwithstanding any other provision of these rules: a. If all disputants are members of C.A.R. and they receive MLS services through the same local Association of REALTORS®, they shall arbitrate at the A.O.R. unless the Corporation participates in a regional MLS, in which case, they shall arbitrate in accordance with any applicable regional agreements between the Corporation and the regional MLS. b. If one or more of the disputants are not members of C.A.R. and all disputants receive MLS services

through the Corporation, they shall arbitrate at the A.O.R. unless the Corporation participates in a regional MLS, in which case, they shall arbitrate in accordance with any applicable regional agreements between the Corporation and the regional MLS. c. If one or more of the disputants are not members of C.A.R. and the disputants receive MLS services through different MLSs and the different MLSs participate in a regional MLS, they shall arbitrate in accordance with any applicable regional agreements between the different MLSs and the regional MLS. If the different MLSs do not participate in a regional MLS, they shall arbitrate at any Association of REALTORS® where the respondent(s) holds membership or receives MLS services, and if there are none, at the A.O.R. d. In the absence of a regional agreement regarding the location of the arbitration, any dispute under subsection (a)-(c) may be conducted at any A.O.R. where the respondent(s) holds association membership or receives MLS services. 16.5 Same Firm. Arbitration between persons from the same firm shall not be available and is not mandated by these rules unless covered by arbitration rules relating to the obligations of Association of REALTORS® members to arbitrate. 16.6 Timing. For purposes of this Section 16, the duty to arbitrate shall be determined when facts giving rise to the dispute occurred. Therefore, a participant or subscriber shall have a duty to

arbitrate if the person was an MLS participant or subscriber when facts giving rise to the dispute occurred. Termination of MLS participation or subscription shall not relieve the arbitration duty under this section for disputes that arose when the person was an MLS participant or subscriber. Requests for arbitration must be filed within one hundred and eighty (180) days after the closing of the transaction, if any, or after the facts constituting the matter could have been known in the exercise of reasonable diligence, whichever is later.

17. NONPAYMENT OF MLS FEES 17.1 Nonpayment of MLS Fees. The Board of Directors may assess a late payment charge if MLS fees, fines and other assessments are not paid by the due date, which late payment charge may be increased with the passage of time. MLS fees for all members shall be payable quarterly in advance of the first day of the new quarter, excluding holidays and weekend, then such payment shall be required as of the following business day. If MLS fees, fines, charges or other amounts owed the MLS are not paid by the due date, the nonpaying participant and/or subscriber’s MLS services shall be subject to suspension until such outstanding amounts are paid in full. The MLS may suspend MLS services under this section provided the MLS gives the participant and/or subscriber at least fifteen (15) calendar days prior notice of the proposed suspension date. Such notice may be included with the original billing statement for MLS fees, fines or BAKERSFIELD ASSOCIATION OF REALTORS®

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charges or any time thereafter. In the event the amounts owed remain unpaid for three months after the due date, the nonpaying participant MLS services shall automatically terminate regardless if notice of such termination is given. 17.2 Disputed Amounts. If a participant and/or subscriber disputes the accuracy of amount owed, the participant and/or subscriber may request a hearing before the Board of Directors. In order to request such a hearing, the participant and/or subscriber must first pay the disputed amount in whole which may be refunded in whole or part in accordance with the Board of Directors’ determination. Hearings under this section shall be conducted in accordance with the California Code of Ethics and Arbitration Manual. 17.3 Reinstatement. Any participant and/or subscriber whose MLS services have been terminated for nonpayment of MLS fees may reapply for participation in the MLS. However, prior to being granted access, such participant and/or subscriber must pay all fees applicable to new applicants and all past due amounts owed.

18. CHANGES IN RULES AND REGULATIONS. The rules and regulations of the MLS may be amended by a twothirds vote of all members of the Board of Directors. Any changes to these rules and regulations which are mandated by the National Association of REALTORS® shall automatically be incorporated into these rules and regulations and

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do not require the Board of Directors approval.

19. MODEL VIRTUAL OFFICE WEBSITE (VOW Rules for MLSs). (See C.A.R. 12.19) 19.1 Definitions. a. A virtual Office Website (“VOW”) is a Participant’s Internet website, or a feature of a Participant’s website, through which the Participant is capable of providing real estate brokerage services to consumers with whom the Participant has first established a broker-consumer relationship (as defined by state law) where the consumer has the opportunity to search MLS Listing Information, subject to the Participant’s oversight, supervision, and accountability. A non-principal broker or sales licensee affiliated with a Participant may, with his or her Participant’s consent, operate a VOW. Any VOW of a non-principal broker or sales licensee is subject to the Participant’s oversight, supervision, and accountability. b. As used in Section 19 of these Rules, the term “Participant” includes a Participant’s affiliated non-principal brokers and sales licensees – except when the term is used in the phrases “Participant’s consent” and “Participant’s oversight, supervision, and accountability”. References to “VOW” and “VOWs” include all VOWs, whether operated by a Participant, by a non-principal broker or sales licensee, or by an Affiliated VOW Partner (“AVP”) on behalf of a Participant. c “Affiliated VOW Partner” (“AVP”) refers to an entity or person designated by a Participant

to operate a VOW on behalf of the Participant, subject to the Participant’s supervision, accountability and compliance with the VOW Policy. No AVP has independent participation rights in the MLS by virtue of its right to receive information on behalf of a Participant. No AVP has the right to use MLS Listing Information except in connection with operation of a VOW on behalf of one or more Participants. Access by an AVP to MLS Listing Information is derivative of the rights of the Participant on whose behalf the AVP operates a VOW. d. As used in Section 19 of these Rules, the term “MLS Listing Information” refers to active listing information and sold data provided by the Participants to the MLS and aggregated and distributed by the MLS to Participants. 19.2 Limits in Displaying MLS Listing Information. a. The right of a Participant’s VOW to display MLS Listing Information is limited to that supplied by the MLS(s) in which the Participant has participatory rights. However, a Participant with offices participating in different MLSs may operate a master website with links to the VOWs of the other offices. b. Subject to the provisions of the VOW Policy and these Rules, a Participant’s VOW, including any VOW operated on behalf of a Participant by an AVP, may provide other features, information, or functions, e.g. Internet Data Exchange (“IDX”). c. Except as otherwise provided in the VOW Policy or in these Rules, a Participant need not

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obtain separate permission from other MLS Participants whose listings will be displayed on the Participant’s VOW. 19.3 Duties and Obligations of Participant to Utilize VOW. a. Before permitting any consumer to search for or retrieve any MLS Listing Information on his or her VOW, the Participant must take each of the following steps: (i) The Participant must first establish with that consumer a lawful broker-consumer relationship (as defined by state law), including completion of all actions required by state law in connection with providing real estate brokerage services to clients and customers (hereinafter “Registrants”). Such actions shall include, but are not limited to, satisfying all applicable agency, non-agency, and other disclosure obligations, and execution of any required agreements. (ii) The Participant must obtain the name and a valid email address for, each Registrant. The Participant must send an email to the address provided by the Registrant confirming that the Registrant has agreed to the Terms of Use (described in subsection (d) below). The Participant must verify that the email address provided by the Registrant is valid and that the Registrant has agreed to the Terms of Use. (iii) The Participant must require each Registrant to have a user name and a password, the combination of which is different from those of all other Registrants on the VOW. The Participant may, at his or her option, supply the

user name and password or may allow the Registrant to establish its user name and password. The Participant must also assure that any email address is associated with only one user name and password. b. The Participant must assure that each Registrant’s password expires on a date certain but may provide for renewal of the password. The Participant must at all times maintain a record of the name, email address, user name, and current password of each Registrant. The Participant must keep such records for not less than 180 days after the expiration of the validity of the Registrant’s password. c. If the MLS has reason to believe that a Participant’s VOW has caused or permitted a breach in the security of MLS Listing information or a violation of MLS rules, the Participant shall, upon request of the MLS, provide the name, email address, user name, and current password, of any Registrant suspected of involvement in the breach or violation. The Participant shall also, if requested by the MLS, provide an audit trail of activity by any such Registrant. d. The Participant shall require each Registrant to review, and affirmatively to express agreement (by mouse click or otherwise) to, a “Terms of Use” provision that provides at least the following: (i) That the Registrant acknowledges entering into a lawful consumer-broker relationship with the Participant; (ii) That all information obtained by the Registrant from the VOW is

intended only for the Registrant’s personal, non-commercial use; (iii) That the Registrant has a bona fide interest in the purchase, sale, or lease of real estate of the type being offered through the VOW; (iv) That the Registrant will not copy, redistribute, or retransmit any of the information provided except in connection with the Registrant’s consideration of the purchase or sale of an individual property; (v) That the Registrant acknowledges the MLS’s ownership of, and the validity of the MLS’s copyright in, the MLS database. e. The Terms of Use Agreement may not impose a financial obligation on the Registrant or create any representation agreement between the Registrant and the Participant. Any agreement entered into at any time between the Participant and Registrant imposing a financial obligation on the Registrant or creating representation of the Registrant by the Participant must be established separately from the Terms of Use, must be prominently labeled as such, and may not be accepted solely by mouse click. f. The Terms of Use Agreement shall also expressly authorize the MLS, and other MLS Participants or their duly authorized representatives, to access the VOW for the purposes of verifying compliance with MLS rules and monitoring display of Participants’ listings by the VOW. The Agreement may also include such other provisions as may be agreed to between the Participant and the Registrant. BAKERSFIELD ASSOCIATION OF REALTORS®

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19.4 Information to Display on Participant’s VOW. A Participant’s VOW must prominently display an e-mail address, telephone number, or specific identification of another mode of communication (e.g., live chat) by which a consumer can contract the Participant to ask questions, or get more information, about any property displayed on the VOW. The Participant, or a non-principal broker or sales licensee licensed with the Participant, must be willing and able to respond knowledgeably to inquiries from Registrants about properties within the market area served by that Participant and displayed on the VOW. 19.5 Security Protection to Prevent Unauthorized Use. A Participant’s VOW must employ reasonable efforts to monitor for, and prevent, misappropriation, “scraping”, and other unauthorized use of MLS Listing Information. A Participant’s VOW shall utilize appropriate security protection such as firewalls as long as this requirement does not impose security obligations greater than those employed concurrently by the MLS. 19.6 Exclusion of MLS Information on VOW a. A Participant’s VOW shall not display listings or property addresses of any seller who has affirmatively directed the listing broker to withhold the seller’s listing or property address from display on the Internet. The listing broker shall communicate to the MLS that the seller has elected not

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to permit display of the listing or property address on the Internet. Notwithstanding the foregoing, a Participant who operates a VOW may provide to consumers via other delivery mechanisms, such as email, fax, or otherwise, the listings of sellers who have determined not to have the listing for their property displayed on the Internet. b. A Participant who lists property for a seller who has elected not to have the property listing or the property address displayed on the Internet shall cause the seller to execute a document that includes the following (or a substantially similar) provision: Seller Opt-Out-Form 1. Please check either Option a or Option b [__] a. I have advised my broker or sales agent that I do not want the listed property to be displayed on the Internet. OR [__] b. I have advised my broker or sales agent that I do not want the address of the listed property to be displayed on the Internet. 2. I understand and acknowledge that, if I have selected option a, consumers who conduct searches for listings on the Internet will not see information about the listed property in response to their search. _____________________________ Initials of Seller c. The Participant shall retain such forms for at least one year from the date they are signed, or one year from the date the listing goes off the market, whichever is greater. 19.7 Input of Third Parties. a. Subject to subsection (b), a

Participant’s VOW may allow third-parties (i) to write comments or reviews about particular listings or display a hyperlink to such comments or reviews in immediate conjunction with particular listings, or (ii) display an automated estimate of the market value of the listing (or hyperlink to such estimate) in immediate conjunction with the listing. b. Notwithstanding the foregoing, at the request of a seller the Participant shall disable or discontinue either or both of those features described in subsection (a) as to any listing of the seller. The listing broker or agent shall communicate to the MLS that the seller has elected to have one or both of these features disabled or discontinued on all Participants’ websites. Subject to the foregoing and to Section 19.8, a Participant’s VOW may communicate the Participant’s professional judgment concerning any listing. A Participant’s VOW may notify its customers that a particular feature has been disabled “at the request of the seller.” 19.8 Comments from Listing Broker. A Participant’s VOW shall maintain a means (e.g., e-mail address, telephone number) to receive comments from the listing broker about the accuracy of any information that is added by or on behalf of the Participant beyond that supplied by the MLS and that relates to a specific property displayed on the VOW. The Participant shall correct or remove any false information relating to a specific property

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within 48-hours following receipt of a communication from the listing broker explaining why the data or information is false. The Participant shall not, however, be obligated to correct or remove any data or information that simply reflects good faith opinion, advice, or professional judgment. 19.9 Refreshment of Listing Information. A Participant shall cause the MLS Listing Information available on its VOW to be refreshed at least once every three (3) days. 19.10 Restriction in Providing MLS Information. Except as provided in these rules, the National Association of REALTORS® VOW Policy, or any other applicable MLS rules or policies, no Participant shall distribute, provide, or make accessible any portion of the MLS Listing Information to any person or entity.

notify the MLS of its intention to establish a VOW and must make the VOW readily accessible to the MLS and to all MLS Participants for purposes of verifying compliance with these Rules, the VOW Policy, and any other applicable MLS rules or policies. 19.14 Operating More Than One VOW. A Participant may operate more than one VOW himself or herself or through an AVP. A Participant who operates his or her own VOW may contract with an AVP to have the AVP operate other VOWs on his or her behalf. However, any VOW operated on behalf of a Participant by an AVP is subject to the supervision and accountability of the Participant.

19.12 Exclusion of Listings. A Participant’s VOW may exclude listings from display based only on objective criteria, including, but not limited to, factors such as geography, list price, type of property, cooperative compensation offered by listing broker, and whether the listing broker is a REALTOR®.

19.15 Exclusion of Information on VOW. A Participant’s VOW may not make available for search by, or display to, Registrants any of the following information: a. Expired, withdrawn, or pending (“under contract”) listings. b. The compensation offered to other MLS Participants. c. The type of listing agreement, i.e., exclusive right to sell or exclusive agency. d. The seller’s and occupant’s name(s), phone number(s), or e-mail address(es). e. Instructions or remarks intended for cooperating brokers only, such as those regarding showings or security of listed property.

19.13 Notifying MLS. A Participant who intends to operate a VOW to display MLS Listing Information must only

19.16 Amending MLS Listing Information. A Participant shall not change the content of any MLS Listing

19.11 Privacy Policy. A Participant’s VOW must display the Participant’s privacy policy informing Registrants of all of the ways in which information that they provide may be used.

Information that is displayed on a VOW from the content as it is provided in the MLS. The Participant may, however, augment MLS Listing Information with additional information not otherwise prohibited by these Rules or by other applicable MLS rules or policies as long as the source of such other information is clearly identified. This rule does not restrict the format of display of MLS Listing Information on VOWs or the display on VOWs of fewer than all of the listings or fewer than all of the authorized information fields. 19.17 Disclaimer Clause. A Participant shall cause to be placed on his or her VOW in a manner readily visible to consumers but not less than 7pt type that contains the following, or substantially similar, notice: A Participant’s VOW may include other appropriate disclaimers necessary to protect the Participant and/or the MLS from liability. Based on information from the _____________________________ /Association of REALTORS® (alternatively, from the _______________________ MLS) as of ______ (date the AOR/MLS data was obtained). All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information. BAKERSFIELD ASSOCIATION OF REALTORS®

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19.18 Identifying Name of Listing Firm, Broker, Agent. A Participant shall cause any listing that is displayed on his or her VOW to identify the name of the listing firm and the listing broker or agent in a readily visible color, in a reasonably prominent location, and in typeface not smaller than the median typeface used in the display of listing data. 19.19 Limiting Number of Listings for View. A Participant shall limit the number of listings that a Registrant may view, retrieve, or download to not more than 500 current listings and not more than 500 sold listings in response to any inquiry. 19.20 Reconfirming Password. A Participant shall require that Registrants’ passwords be reconfirmed or changed every 120 days. (Note: The number of days passwords remain valid before being changed or reconfirmed must be specified by the MLS in the context of this rule and cannot be shorter than 90 days. Participants may, at their option, require Registrants to reconfirm or change passwords more frequently.) 19.21 Requirements for Co-Branding. A Participant may display advertising and the identification of other entities (“co-branding”) on any VOW the Participant operates or that is operated on his or her behalf. However, a Participant may not display on any such VOW deceptive or misleading advertising or co-branding. For

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purposes of this Section, cobranding will be presumed not to be deceptive or misleading if the Participant’s logo and contact information (or that of at least Participant, in the case of a VOW established and operated on behalf of more than one Participant) is displayed in immediate conjunction with that of every other party, and the logo and contact information of all Participants displayed on the VOW is as large as the logo of the AVP and larger than that of any third party. 19.22 Identifying Source of Listing. A Participant shall cause any listing displayed on his or her VOW that is obtained from other sources, including from another MLS or from a broker not participating in the MLS, to identify the source of the listing. 19.23 Listings Searched Separately. A Participant shall cause any listing displayed on his or her VOW obtained from other sources, including from another MLS or from a broker not participating in the MLS, to be searched separately from listings in the MLS. 19.24 Required License Agreement. Participants and the AVPs operating VOWs on their behalf must execute the license agreement required by the MLS. 19.25 Withholding Seller’s Listing or Address. Where a seller affirmatively directs their listing broker to withhold either the seller’s listing or the address of the seller’s listing from

display on the Internet, a copy of the seller’s affirmative direction shall be provided to the MLS within two (2) business days. 19.26 Applicability of Rules to MLS or Corporation. Nothing in these rules shall limit the right of the Corporation or MLS to enter into licensing agreements with third parties for use of the MLS compilations or any portion thereof in accordance with terms approved by the Board of Directors. 19.27 Participant and Subscriber Standards of Conduct. The services that Participants and Subscribers provide to their clients and customer shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction and international real estate. Participants and Subscribers shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth.

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POLICIES

GOLDEN EMPIRE MULTIPLE LISTING (GEMLS) FINANCIAL MANAGEMENT Managing the financial affairs of the Golden Empire Multiple Listing Service, Inc., requires prudent management, proving maximum protection to members’ money within established guidelines.

(11/06) No charge for data entry of comp only listings.

$250 annually for such services. Contract revocable at any time.

(11/06) Each office shall be allocated one (1) clerical access to MLS for every 15 agents at no charge to Broker. A $25 charge for will assessed for any additional clerical access requests.

(10/06) Budget expenditure limit of $2500 not requiring Board of Directors approval.

(9/05) Increase MLS Admission Fee for R.E. Broker to $1000 effective January 1, 2006

(11/06) Bill for CUA’s directly to agents (Broker’s approval required). $25 set-up fee, with $12/mo. access fee. Clerical users must register with Association.

(9/05) Effective January 1, 2006, MLS fees to be billed in advance. On-line billing now available.

(11/06) Offices will be turned off for nonpayment of MLS fees by broker.

(6/09) Pension Plan: GEMLS/ Association BOD concurred assuming responsibility for the Newport Group fees associated with the employees 401K Pension Plan, according to their established proportionate share (65% GEMLS/Assoc. 35%). Wealth Target Management fees to continue to be the responsibility of participating employees.

(11/05) Gary Crabtree’s MLS fees waived in return for providing Statistical Market Report

(11/06) Third party vendors requesting virtual media bulk upload service will be assessed

(1/10) Assessment of yearly MLS administrative services fee of $150 for cooperative key

(6/05) Assessor’s agreement to be in two year increments, From July to June at $6,500/yr.

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processing. Renews upon MLS membership anniversary date. (7/11) Late fee: Quarterly late/ reinstatement fees for payment of MLS fees after the required due date increased from $10 to $50. (12/13) GEMLS and its parent, The Bakersfield Association of REALTORS® (the Association) share personnel, office space, utilities, equipment, supplies and other ordinary and necessary business expenses. GEMLS and the Association shall share common expenses on a fair and equitable basis. Costs of personnel shall be based on the time each personnel spends on GEMLS matters and Association matters. Allocations of common costs and expenses may be based on reasonable estimates and determined by and reviewed by the Strategic Planning and Finance Committee. The Association may charge GEMLS reasonable rent on the portion or percentage of the building reasonably determined to be used by GEMLS as determined by the Strategic Planning and Finance Committee. (12/13) Annual Audit: The GEMLS will have an outside CPA firm conduct an annual audit of the corporation’s finances, which may be the same CPA conducting the parent’s, The Bakersfield Association of REALTORS’® audit. ADMINISTRATION/STAFF (10/07) In order to protect the public and to expedite action when needed, the Executive officer shall determine possible security issues and suspend key privileges of agents and send notification

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to Broker of said suspension. Notification shall be given to GEMLS BOD at next meeting for ratification of action. (12/13) Adoption of Record Retention and Destruction Policy. (12/13) Software Licenses: Any software installed in the organization’s computers must have appropriate licenses. GOVERNANCE/MLS RULES (11/05) MLS Citation Policy adopted. (3/06) Non-compliance of MLS lockbox rule is a non-correctable offense. Penalty established for non-compliance: 1st - $250; 2nd - $500; 3rd - $1,00; 4th – 30-day loss of MLS privileges. (5/06) GEMLS public website to include addresses of property. (11/06) Cumulative Days on Market – If home is re-listed within 30 days, days on market will be cumulative. (1/07) MLS Rule 7.11.1 – Marketing Remarks: Public Marketing Remarks shall be limited to a description of the property. No identifying information (including name, telephone numbers or webpage addresses) regarding the listing office or listing salesperson are to be included in this section. Applies to marketing remarks, photos and virtual media. (2/07) Virtual Tours will be allowed, however, must be unbranded with the exception of Affiliate Members. Affiliate member cannot be affiliated with the Listing Broker. (8/07) New Home Construction: Not allow advertising of model

homes with directions to alternate property. (10/07) MLS will accept electronic documentation from Corporation in lieu of signed-documentation for extension on active and expired listings. (10/07) A property listing shall be automatically cancelled upon transfer of title/or upon recordation. If, after transfer or title/recordation, property is not removed by Broker, the GEMLS staff has authority to remove the property from the MLS. (2/08) Statistical Data – C.A.R. provided authorized usage of MLS statistical data for reporting purposes. (6/09) Repeat Violations: Citation Policy “If, within a six (6) month period, the violator is issued two NV-W for violation of the same MLS Rule, the second NV-W will result in an “automatic” Notice of Violation & Fine Assessment (assuming that the violation(s) is one that can be corrected.” (6/09) License ID – Pursuant to Senate Bill 1461, effective 7/1/09, real estate license number to show on all client/ customer reports obtained throughout MLS. (11/12) Conflict of Interest Policy Adopted (1/13) Board & Leadership Guidelines (including Responsibilities, Engagement) as set forth in document presented on 1/29/2013. (1/13) Confidentiality of Documents and Conversations as set forth in GEMLS Confidentiality Agreement.

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(12/13) Antitrust Compliance: The GEMLS, Inc. has a policy that the corporation and its members fully comply with California and United States antitrust laws. This policy includes the following points: n The GEMLS will provide information to members on real estate antitrust issues on a regular basis. n The

GEMLS will occasionally publish the following information in the Bakersfield Association REALTOR® Magazine the following: “The GEMLS has a statement of policy concerning Brokerage Fees. From time to time, the GEMLS publishes its statement as a reminder to all members. It is the GEMLS’ policy to comply fully with all applicable antitrust laws of the State of California and the United States. In this regard, the following points are important to members: 1. The GEMLS does not fix, establish, suggest, maintain or recommend to its members any rate or amount of commission. 2. The GEMLS does not fix, establish, suggest, maintain or recommend to its members the division of commission on cooperative real estate transactions. 3. The GEMLS does not keep records of members’ commission and/or division of commission policies. 4. The GEMLS will accept all listings properly submitted, regardless of commission and/or division of commission. 5. Any member who provides information to the public which is contrary to this policy may be

subject to disciplinary action.

48 hours.

Remember, each real estate brokerage firm must ultimately determine its commission charges.

PHOTO WATERMARK (6/14) A unanimous vote of Directors present approved use of Rapattoni enhancement option for placement of a watermark (to be researched and determined by Jamey) on GEMLS listing photos for the purpose of protecting its rights under Section 11.6 — Copyright Ownership. Use of free Rapattoni solution to be utilized while staff explores other options. Recommendation to be brought back to the board for review.

(12/13) Authority Policy: It shall be the policy of this corporation that any communications on behalf of the corporation shall be official, at the direction of the president, board or staff. No statements shall be made, either verbal or written that conflict with the position or policy of the corporation. Leadership should understand, that by virtue of their position, that statements may be perceived by the public as official and on behalf of the corporation. To control official communications, stationary and business cards shall be for the use of the elected president and staff only. Members of the board and committees may not use the corporation’s stationary. Staff will prepare letters sent on behalf of the organization with a copy remaining in the office. Exceptions may be made to the policy so long as the purpose of the letter is made known and approved by the board in advance. (3/15) A unanimous vote of Directors present approved branded Virtual Media be added to the MLS for all outside syndicators. Public Marketing remarks be added to MLS which include both Agent and Broker Name and Contact Information for Syndicator sites. MLS PHOTO (6/14) A unanimous vote of Directors present approved a change to MLS Rule #12.8 to require the input of MLS photo to

MEMBERSHIP (6/05) Orientation shall be waived for those who do appraisals only. (3/06) Broker access available to statistical data including the agent’s data through Rapattoni. Access can be given to DR or assigned designee of the broker. (5/07) Non-payment of MLS Fees - Agents who do not pay their MLS fees will have their listings placed in the name of the broker. If the Broker does not pay his/her fees, with written notice to the Broker, the listings will be removed from the MLS. (10/07) New members candidates will be published to the MLS BOD and Members for review and approval after review by Membership Committee Chair. Membership granted on a conditional status until final approval is received. Appraiser applicants handled in same manner. (1/12) Appraisers’ Lock Box Key: Directors approved providing full access lock box keys to appraisers. If appraiser holds an BAKERSFIELD ASSOCIATION OF REALTORS®

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active real estate license, he/ she will be required to attend the MLS Rules portion of the MLS orientation program.

(8/16) Discussion and direction given to CEO, with Directors approval, on moving forward with online MLS Orientation.

n $500:

(12/13) Membership Rosters/ Directories: The organization’s database of members must be carefully protected.

FINANCIAL (3/15) Current fee schedule and procedure as applicable to Syndicators;

n $250:

(10/14) Pest Control Companies: Lock Box Key. A unanimous vote of Directors present approved the issuance of a SUPRA Key for pest control company affiliates. Authorization from main Affiliate member must be received prior to issuance. Mandatory first hour of MLS Orientation required. (12/15) Team Names at no administrative cost charged to members.

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n $250

Fee for Broker’s listings to go to Syndicators and require terms of use signed by Broker & Syndicator n Broker

continues to receive their own listings free of charge for their own use. Fee Schedule for MLS Broker Initiation Fees; n $1,000:

Office Initiation Fee for New MLS Brokerage

Office Initiation Fee for

Second MLS Brokerage Office operating under different name requiring separate DBA. Office Initiation Fee to

re-open a previously closed MLS Brokerage Office. (6/15) MLS Violation fines to be allocated to the Charitable Foundation. Staff to determine what % is required to cover staff time. Recommendations to be submitted to SPFC committee for approval and submission to BAK and GEMLS Boards for final approval. GEMLS, INC. POLICIES ADOPTED 12/2/2013

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CITATION POLICYMLS To ensure the integrity of the MLS and MLS database, this Citation policy has been established in accordance with Section 14.3 of the MLS Rules and Regulations. Fines will be issued in accordance with this policy, and are subject to change upon approval by the Board of Directors. This policy is not all-inclusive, may not reflect violations of the Code of Ethics, and does not replace Professional Standards Enforcement. Bakersfield Association of REALTORS® has instituted this Citation/Fine Policy to make a focused effort on bringing back the integrity of the MLS in the eyes of the members it serves.

SUMMARY OF CITATION AND FINE PROCESS A violation of the MLS Rules may be reported to the MLS Compliance Department by way of a “Whistle Blower” form, direct member report or staff investigation. If the violation is one that can be corrected, MLS Compliance Department shall send a Notice of ViolationWarning (NV-W) to the violating individual (“Violator”), responsible Broker Participant or Subscriber Participant (“Responsible Participant”), and acting Sales Manager. Violator must submit a Notice of Correction within fortyeight (48) hours of the Receipt Date of the Notice of Violation and

Fine Assessment (NVFA) to the Violator and a copy of the Notice to the Responsible Participant and acting Sales Manager. If the violation of the MLS Rules is one that cannot be corrected, an NV-W is not sent to the Violator and Responsible Participant. Instead, the NVFA will be sent to the Violator (with a copy to the Responsible Participant and acting Sales Manager). If, within fifteen (15) calendar days of the Receipt Date of NVFA, the fine is not paid or Request for Administrative Review (RAR), or a Request for Hearing (RH) with a $250 filing fee is not received, the MLS privileges of the Violator and the Responsible Participant will be suspended. BAKERSFIELD ASSOCIATION OF REALTORS®

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Examples of violations of the MLS Rules that cannot be corrected include, but not limited to, the following: (1) “Active Listing Without a Valid Listing Agreement”. Paragraph 8.2 of the MLS Rules and Regulations require the broker participant/subscriber to provide documentation to the MLS within twenty-four (24) hours. (2) “Mandatory Submission”. Paragraph 7.5 of the MLS Rules and Regulations requires that Broker participants shall input exclusive right to sell or exclusive agency listing on one to four unit residential property and vacant lots… within 48 hours (excepting weekends, holidays and postal holidays). A violation of the Mandatory Submission rule or failure of Broker participant to submit Seller’s Authorization to Withhold Listing from MLS, at the time of listing, will result in an automatic NVFA. (3) “Failure to Secure Passcode”. Paragraph 12.13 of the MLS Rules and Regulations requires that participants and subscribers are responsible for the security of their passcodes and shall not give or allow use of or make available their passcodes to any person. (4) “Failure to Comply with Lock Box Requirements”. Paragraph 13.6 of the MLS Rules and Regulations required Use of MLS Approved Lockbox. Participants and Subscribers who utilize lockboxes or other access devices (and so indicate on the MLS) shall use the designated or authorized lockbox required by the MLS where the listing is submitted. More than one lockbox or access

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device may be used on a property as long as one of them is the lockbox designated or authorized by the MLS where the listing is submitted. REPORTING A VIOLATION Reports of violations can be made by faxing to: (661) 635-2317 Email to MLSViolaton@ bakersfieldrealtor.org Reports must include the following information: n Name and office of the alleged Violator n Nature of the violation(s) (be as specific as possible, i.e. when it occurred, the MLS #, etc.) n Reporter’s name and contact information is FOR VERIFICATION PURPOSES ONLY AND WILL BE KEPT IN STRICT CONFIDENCE. VIOLATIONS AND FINES First Offense within a 6-month period: $250; Second Offense within a 6-month period: $500; Third Offense within a 6-month period: $1,000; More than three offenses within a 6-month period constitute grounds for additional disciplinary action, including suspension or expulsion from the MLS, after an appropriate hearing as provided in the California Code of Ethics and Arbitration Manual. RESPONSIBILITY FOR VIOLATIONS AND FINES The violating Broker Participant, Appraiser Participant, Subscriber or clerical user (the “Violator”) shall be responsible for paying the fine and correcting the violation. If the Violator is a Subscriber or clerical user, the Broker Participant or Appraiser Participant through

whom the Violator has access to the MLS at the time the violation occurred (the “Responsible Participant”) shall be also responsible to pay the fine and/ or correct the violation including any fine for failure to correct the violation. If the Violator shall become employed or associated with another Broker Participant or Appraiser Participant, the Responsible Participant shall no longer be liable for any fine imposed against the Violator but shall still be liable to correct any violation (and pay any fine for failure to correct the violation) to the extent the Responsible Participant has the ability to do so. The new Broker Participant or Appraiser Participant shall not be liable for the Violator’s fines incurred and assessed prior to the Violator becoming employed or associated with the new Broker Participant or Appraiser Participant, but shall only be responsible for fines and violations that occurred whil the Violator was employed by or associated with the new Broker Participant. The Violator’s history shall apply to the new Broker Participant or Appraiser Participant for the purposes of determining liability for fines and violations occurring after the violation becomes employed by or associated with the new Broker Participant or Appraiser Participant. NONPAYMENT RESULTS IN MLS SUSPENSION Failure to pay a fine, unless an administrative review or a hearing is requested as set forth below, will result in suspension of MLS privileges of the Violator and/or

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Responsible Participant, pursuant to Paragraph 17.1 of the MLS Rules and Regulations, which reads as follows: “17.1 Nonpayment of MLS Fees. If MLS fees, fines, charges or other amounts owed the MLS are not paid within one month after the due date, the nonpaying participant and/or subscriber’s MLS services shall be subject to suspension until such outstanding amounts are paid in full. The MLS may suspend MLS services under this section provided the MLS gives the participant and/ or subscriber at least fifteen (15) calendar days prior notice of the proposed suspension date. Such notice may be included with the original billing statement for MLS fees, remain unpaid for three months after the due date, the nonpaying participant MLS services shall automatically terminate regardless if notice of such termination is given.” NOTICE OF VIOLATION For purposes of this policy, MLS Compliance Department shall send Notice of ViolationWarning (NV-W) to the violating individual (“Violator”), responsible Broker Participant or Subscriber Participant (“Responsible Participant”), and acting Sales Manager. If the Violator is a Subscriber or clerical user, a copy of the notice will be sent to the Responsible Participant. CALCULATING TIME PERIODS Time to submit or report under the MLS Rules & Regulations is counted as business days (weekends and holidays are excluded). Time to correct

violations is counted as business days. DUE DATE FOR FINES Fines are due within fifteen (15) business days of the Receipt Date set forth on the NVFA. Receipt is presumed two (2) business days after mailing or one (1) business day after facsimile or e-mail transmission. If a notice is sent by more than one method, the earlier Receipt Date applies. MULTIPLE AND REPEAT VIOLATIONS If a NVFA includes multiple violations, fines will be assessed on a per listing basis. REPEAT VIOLATIONS If, within a six (6) month period, the Violator is issued two NV-W for violation of the same MS Rule, the second NV-W will result in an AUTOMATIC Notice of Violation and Fine Assessment (assuming that the violation(s) is one that can be corrected). RIGHT TO DISPUTE NOTICE OF VIOLATION AND FINE ASSESSMENT There are two alternative procedures for disputing a Notice of Violation and Fine Assessment (NVFA): (1) the Violator may request an administrative review without any fee, and if the citation is upheld, the fine is limited to the amount or adjusted amount in the NVFA; or (2) the Violator may pay a $250 filing fee and request a hearing, and if the citation is upheld, the fine amount in the NVFA may be increase and additional sanctions may be imposed. FAILURE TO TIMELY SUBMIT EITHER A COMPLETED REQUEST

FOR ADMINISTRATIVE REVIEW (RAR) FORM OR A COMPLETED REQUEST FOR HEARING (RH) FORM WITH THE $250 FILING FEE WILL RESULT IN THE CITATION BEING DEEMED FINAL WITHOUT ANY FURTHER NOTICE, AND THE VIOLATOR’S MLS MAY BE SUSPENDED FOR THE PRESCIVED PERIOD. ADMINISTRATIVE REVIEW To dispute a NVFA, the Violator may request an administrative review by the MLS Quality Assurance Task Force, a subcommittee of the Professional Standards Committee. The MLS Quality Assurance Task Force, a subcommittee of the Professional Standards Committee. The MLS Quality Assurance Task Force is comprised of one or more panels of not less than three (3) nor more than five (5) REALTORS®. The Violator must first correct the violation and submit a Notice of Correction if the violation is one that can be corrected. Then, within fifteen (15) calendar days of the Receipt Date of the NVFA, the Violator may submit a Request for Administrative Review (RAR) Form. No fee is required for an administrative review. The RAR form must state the specific ground(s) for the review and include all and/or reasons for the request. The grounds for an administrative review are one or more of the following: n Factual dispute regarding the alleged violation(s) such as misapplication of the MLS Rule(s) cited. n Contention that there has been a violation of procedural due process. BAKERSFIELD ASSOCIATION OF REALTORS®

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(NOTE: FAILURE TO RECEIVE ANY NOTICE IS NOT GROUNDS FOR ADMINISTRATIVE REVIEW) If the grounds set fort are proper grounds for a review, the MLS Quality Assurance Task Force wil review the documentation. No formal hearing is held and no appearance by the Violator is required. Written Notice of Administrative Review Decision by the MLS Quality Assurance Task Force will be sent to the Violator within thirty (30) business days of receipt of the RAR. In the event the MLS Quality Assurance Task Force determines that no violation(s) occurred, the fine will be withdrawn. In the event the MLS Quality Assurance Task Force determines that there has been a procedural due process violation, the MLS Quality Assurance Task Force may return the matter to MLS Compliance Department, or dismiss the matter. REQUEST FOR HEARING To dispute a Notice of Violation and Fine Assessment (NVFA), the Violator may request a hearing before the Professional Standards Committee.

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The Violator must first correct the violation and submit a Notice of Correction if the violation is one which can be corrected. Then, within fifteen (15) calendar days of the Receipt Date of the NFVA, the Violator may submit a Request for Hearing (RH) form with a $250 filing fee. The RH form must state the specific ground(s) for the hearing and include all facts and/or reasons for the request. The grounds for a hearing are one or more of the following: n Factual dispute regarding the alleged violation(s) such as misapplication of the MLS Rule(s) cited. n Contention that there has been a violation of procedural due process. (NOTE: FAILURE TO RECEIVE ANY NOTICE IS NOT GROUNDS FOR ADMINISTRATIVE REVIEW) If the grounds set forth are proper grounds for a hearing, BAofR will set a hearing in accordance with the California Code of Ethics and Arbitration Manual. The Violator may, but is not required to, attend the hearing.

In the event the hearing panel determines that the violation(s) occurred, the $250 filing fee will be retained as a cost for administration of the hearing and will not apply toward the payment of any fines. The fine in the NVFA OR SUCH INCREASED FINE AS IS IMPOSED BY THE HEARING PANEL will be payable in full by the date noticed in the decision, and the Violator may be required to comply with ADDITIONAL DISCIPLINE AND SANCTIONS AS MAY BE IMPOSED BY THE HEARING PANEL in accordance with the California Code of Ethics and Arbitration Manual. The sanctioning guidelines are set forth on the back of the RH form. In the event the hearing panel determines that no violation(s) occurred, the filing fee will be returned. In the event the hearing panel determines that there has been a procedural due process violation, the hearing panel may refund the filing fee and either return the matter to Staff (MLS Compliance Department) or dismiss the citation. GEMLS, INC. Citation/Fine Policy Adopted 3/10/06

PARTNERSHIP LE A D E RSH I P RE S OU R CE S

Governance & Management

WORK GROUPS AND COMMITTEES 25,000 - 40,000 foot perspective

THE BOARD IS VISIONARY

SOARING AT THE HIGHEST LEVEL

Though directors on the board may have exceptional management skills, they serve on the board for the purpose of governance. Think of governance as being at the 50,000 foot perspective to advance the organization. Note: Heed the adage, “boards don’t do committee work at the board table.” To reduce the number of committee reports at board meetings, consider using a consent agenda where committee reports without action request are circulated before the meeting.

STAFF

10,000 foot perspective

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VOLUNTEER AND STAFF Roles and Responsibilities Effective association management calls for a partnership between volunteers and staff. The nature of the partnership varies from association to association. Volunteers and staff must share a commitment to the mission and goals of the organization and continuously pursue the best interests of the association and the members it serves. Conflict between volunteers and paid employees most often results from a lack of understanding of the responsibilities, authorities and accountabilities that fall to each party. Although this partnership varies tremendously from association to association, many associations split their responsibilities as listed below. If this is not the case at your association, it’s important to make sure that you do have clear distribution of duties.

BAKERSFIELD ASSOCIATION OF REALTORS®

Board of Directors n Implement and document a

n Promote efficient and effective

use of volunteer and paid

governance process n Establish job descriptions for the board of directors, board chairs and members n Establish job descriptions for all committees, committee chairs and members n Agree on a job description for the chief staff Association’s executive (CEO) n Adhere to governance model and job descriptions n Ensure association conducts financial audit, review or compilation, depending on revenues

resources

Board of Directors and Staff

n Establish job descriptions for all

n Collaborate on strategic

initiatives to gain from diverse perspectives n Ensure the organization’s mission is top of mind in decision-making processes

n Listen to each other and respect

differing points of view n Ensure association complies

with NAR Core Standards

Chief Executive Officer n Provide the directors with

information on governance n Provide the directors

with information on trends, demographics and policy, to keep them focused on the big picture n Offer effective management and

advice to the directors employees n Provide mechanisms to recruit,

train, retain and recognize volunteers n Be open, honest and

straightforward in all association communication

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POLICYGuideline Board - Staff Commitment to Responsibilities FOREWARD The Board of Directors and Chief Executive Officer/Staff are a team working to achieve the organization’s mission and goals. The Board’s responsibility is that of governance and leadership --- setting policy and direction while advancing the mission. The Chief Executive Officer (CEO) and staff responsibility is to manage administrative efforts. Together their actions add value to and protect the organization. The “Board-Staff Pact” serves as a checklist or reminder as to the responsibilities of all persons. PACT WHEREAS, Serving on the Board is the voluntary responsibility for governance and leadership; WHEREAS, Members have a right to demand that their organization conduct its affairs in an efficient, competent, and innovative fashion, responsive to members and stakeholders; WHEREAS, Effective governance and management requires maximum commitment and performance by both the Board and the CEO; WHEREAS, Such an effort will require that the Board and CEO recognize and focus on their distinct duties; NOW, THEREFORE, In consideration of the above, we agree to:

BOARD OF DIRECTORS A. Attend leadership orientation and educational opportunities that enhance governance. B. Commit adequate time to prepare and attend meetings. C. Make all decisions based on knowledge and fact; exercising due diligence. D. Respect the confidentiality of information and documents required for governance. E. Govern strategically by focusing on the future; allocating a majority of time on issues with long-term impact for the organization and the communities it serves. F. Eliminate committees and practices that are inconsistent with the organization’s mission and goals. G. Be attentive to trends, issues, opportunities and challenges affecting the organization and members. H. Formulate a strategic plan that focuses on the needs of members, the trade, profession, or community represented. I. Ensure that future leaders are developed and motivated to govern the organization. J. Respect the authority and responsibility entrusted to committees, staff and the CEO; refraining from impeding their progress. CEO AND STAFF A. Develop a staff team that promotes excellence, professionalism, and dedication to the organization. B. Exceed the bounds of job

descriptions by bringing to the organization the highest levels of skill. C. Faithfully report the status of goals, programs and operations to the Board in a clear concise manner. D. Accept complete responsibility for the administration with energy, vision and passion. E. Ensure that all duties are carried out in a manner consistent with local, state and federal laws, governing documents and the budget; ever guided by the interests and needs of members. F. Respect and respond to members and inquiries in a timely and professional manner. G. Recommend to the Board opportunities and funding for professional development, as well as competitive compensation levels. H. Protect the intellectual and tangible property of the organization and maintain documented systems of management operations for training, consistency and perpetuity.

Leadership Rules Of Engagement The responsibilities of volunteer leaders are generally stated in the governing documents: bylaws, articles of incorporation and policies. The rules of engagement have been developed to communicate cultural expectations and preferred behavior for governance.

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POLICYGuideline TIMELINESS AND COURTESIES n Meetings start and end on time; arriving on time and staying until business is completed. n Cell phones and digital distractions are off or on silent during meetings. n Communications are acknowledged within 48 hours of receipt; if a reply is pending, do so within 3 days and more immediately for urgent issues. n Written reports, requested documents and agenda items, as well as special budgetary requests, must be submitted in a timely manner. KNOWLEDGE AND INFORMATION n Conduct business and make decisions based upon knowledge — not assumptions. n Information, reports and financials will be read for understanding. If information is lacking, ask critical questions in advance of meetings so everyone is fully prepared. n Agree that a lack of knowledge is not an excuse for not taking action or attendance. DECORUM AND PROTOCOL n The organization operates in an environment of transparency. n Conduct board business in front of all board members and speak up at meetings (no sidebars). n Meeting decorum is respectful and no member will reproach another for speaking honestly. n Factual information will not be withheld from the board by any director or staff member. n Respect and give fair

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consideration to diverse and opposing viewpoints; realizing the impact of image and words when discussing and representing the Board of Directors. n Accountability to any and all commitments by volunteers and staff is crucial. n Decisions and outcomes must benefit the organization, members and the community; without personal interests or conflicts. n Confidentiality of all proceedings and information is required. n Decisions of the board are for the whole — dissident opinions should be expressed only inside the board meeting. n Rules of Order guide board discussions and directors should familiarize themselves with protocols of motions, speaking, authority, etc. ORGANIZATIONAL TRADITIONS n Attendance at an annual orientation, as well as the periodic board retreat, is expected. n Board members are encouraged to be role models in making contributions to the Political Action Committee. n Directors should reach out to members to determine their needs; and contact at least two prospects per quarter to invite them to join.

Confidentiality Agreement This Confidentiality Agreement (the “Agreement”), which is dated and shall be effective as of January 1, 2018, is entered into

by and between the undersigned (the “Board Member”) for the benefit of the Bakersfield Association of REALTORS® (the “Association”).

RECITALS WHEREAS, Board Member is a member of the Association’s Board of Directors (the “Board”), which oversees the Association’s wholly-owned subsidiary: GE-MLS, INC (hereandafter GEMLS). WHEREAS, in the course of Board Member’s participation on and with the Board, the Association and other members of the Board or committees of the Board, may disclose, either directly or through their respective agents, to Board Member, confidential, important, and proprietary information and trade secrets concerning the Association and/or the GEMLS, or their respective businesses and activities; NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein and incorporating by this reference the foregoing RECITALS, the undersigned Board Member hereby agrees as follows: 1. CONFIDENTIALITY. Board Member shall not disclose any of the Confidential Information (as defined below) in any manner whatsoever, except to other members of the Board or committees of the Board or to the officers, directors, attorneys, and consultants of the Association

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POLICYGuideline as necessary in connection with Board Member’s participation as a member of the Board or any committee thereof, or as provided in paragraph 3 of this Agreement, and shall hold and maintain the Confidential Information in strictest confidence. 2. DEFINITION OF “CONFIDENTIAL INFORMATION”. For purposes of this Agreement, “Confidential Information” shall include all information or material that the Board Member receives or is made privy to in connection with Board Member’s participation on or with the Board or any of its committees or that has or could have commercial value or other utility in the business or prospective

business of the Association or the GEMLS Confidential Information includes all information of which unauthorized disclosure could be detrimental to the interests of the Association or the GEMLS whether or not such information is identified as Confidential Information by the Association or the GEMLS By example and without limitation, Confidential Information includes, but is not limited to, any and all information of the following or similar nature, whether or not reduced to writing: n GEMLS listing information (including without limitation information received from members of the Association or GEMLS participants or subscribers);

n Information

or communications received from attorneys or other consultants of the Association and/or GEMLS n Other information received concerning the Association or the GEMLS, including agreements, contracts, marketing knowledge and information, sales figures, pricing information, marketing and business plans, strategies, forecasts, financial information, budgets, software, research papers, projections, procedures, routines, trade secrets, innovations, inventions, discoveries, improvements, research or development and test results, specifications, data, knowhow, formats, plans, sketches, specifications, drawings, models,

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POLICYGuideline and any other information or procedures that are treated as or designated secret or confidential by the Association or the GEMLS 3. REQUIRED DISCLOSURES. Board Member may disclose confidential information if and to the extent that such disclosure is required by court order, provided that Board Member uses reasonable efforts to limit the disclosure by means of a protective order or by a request for confidential treatment and disclosure before it is made and to interpose Board Member’s own objection to the disclosure. 4. USE. Board Member shall use the Confidential Information solely for the purpose of Board Member’s participation as a member of the Board and any committee thereof. Nothing in this Agreement shall be construed as granting any rights to Board Member, by license or otherwise, to any Confidential Information. 5. IRREPARABLE HARM. Board Member understands and acknowledges that any disclosure or misappropriation of any of the Confidential Information in violation of this Agreement may cause the Association and/or the GEMLS irreparable harm, the amount of which may be difficult to ascertain, and therefore agrees that the Association and the GEMLS shall have the right to apply to a court of competent jurisdiction for specific performance and/or an order restraining and enjoining

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any such further disclosure or breach and for such other relief as the Association or the GEMLS, respectively, shall deem appropriate. Such rights are to be in addition to the remedies otherwise available to the Association and/or the GEMLS at law or inequity. Board Member expressly waives the defense that a remedy in damages will be adequate and any requirement in an action for specific performance or injunction for the posting of a bond by the Association of the GEMLS 6. SURVIVAL. This agreement shall continue in full force and effect at all times including when the Board Member is no longer a member of the Board. 7. MISCELLANEOUS. This Agreement shall be governed by and construed in accordance with the laws of the State of California. This Agreement shall not limit any rights that the Association or the GEMLS may have under common law, applicable statutory provisions, trade secret, copyright, patent or other laws that may be available to the Association or the GEMLS This Agreement may not be amended, modified, revoked, or waived except in writing signed by both the Board Member and the Association.

The Conflict of Interest Policy The standard of behavior at the Bakersfield Association of REALTORS® (BAR) and its wholly owned subsidiary, the GEMLS,

is that all staff, volunteers, and board members scrupulously avoid conflicts of interest between the interests of the BAR on one hand, and personal, professional, and business interests (the “Business”) on the other. This includes avoiding potential and actual conflicts of interest, as well as perceptions of conflicts of interest. Members with a conflict of interest must immediately disclose their interest at the outset of any discussions by a decision making body of BAR or its wholly owned subsidiary, GEMLS, pertaining to the Business or any of its products or services. Such members may not participate in the discussion relating to that Business other than to respond to questions asked of them by other members of the body. Furthermore, no member with a conflict of interest may vote on any matter in which the member has a conflict of interest, including votes to block or alter the action of the body in order to benefit the Business in which they have an interest. I understand that the purposes of this policy are to protect the integrity of the BAR’s decisionmaking process, to enable our members to have confidence in our integrity, and to protect the integrity and reputations of volunteers, staff, and board members. I further understand that this policy is meant to supplement good judgment, and I will respect its spirit as well as its wording.

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THE PERFECT BOARD A set of precepts and ideas to enable us to work together effectively, efficiently and harmoniously to achieve the goals of our organization. n Loyalty – Director must put aside individual interest. The organization’s interests and wellbeing are considered. n Obedience – Following both the “letter” and “spirit” of governing documents and policies. n Care – Attend meetings, be informed, make reasonable decisions and see to it that things get done. n Obligation – Duty to lead and care for the organization. Authority passed along by law. Required to use sound judgement, prudence and diligence in discharging their responsibilities. Fiduciary (legal and ethical relationship of trust) responsibility extremely important with regard to handling assets of the organization. n Confidentiality/Transparency – The Board Room is a safe environment for frank and sensitive discussions, however, specific opinions, votes and sensitive data must be protected. Once a decision has been made, the Board speaks with one voice in reporting to the membership. n Competency – Competency is learned. It is the combination of real life experience coupled with education. The selection of competent persons begins with learning about their abilities, background, experience and skills. Critical to have people working in

positions and areas in which they can prove themselves to be both competent and capable of fulfilling the role of Director. Serving on committees, task forces and other organization activities often show how well a person accomplishes assignments and gets along with others. n Do it Right – Often, making the right decision is hard. No one is perfect and mistakes can and will be made. Own it! It takes courage to face up to mistakes and do the right thing. The sense of “dong it right” easily overshadows over-up, deceit and untruthfulness. n Respect – Give respect in order to receive respect. Directors, respect the position and responsibility of the “Chair” to maintain order. Be engaged. Carefully listen to other’s comments. Take notes and seek to understand their positions. Refrain from yielding to distractions (cell phone, other conversations). No side-bar conversations or talking over other Directors. n Unity – Confidence in organization is strengthened by a sense of unity. When a decision is made or action taken, all Directors are obligated to support the decision and speak with one voice. n Willingness – Director must be willing to serve. No arm twisting, coercion or guilting. Unwilling people miss meetings, don’t prepare well. Only value position or office for recognition is can bring them. n Open Minded – Meaningful and

opposing conversations should be encouraged. Sharing new ideas or presenting a different approach may solve long-time challenges. n Leadership – Decision, especially difficult decisions, require sound leadership. Carefully study the issue, consider possible outcomes and make fact-based decisions. Strong leadership is required to take the organization through difficult times. n Delegation – The Board of Directors is empowered to ensure that the organization operates smoothly and effectively, however, it does not run the organization. The work and policy executive is delegated to staff, committees, volunteers, consultants, advisors and other persons who assist the Board in achieving the organizations goals and objectives. The Board does not do the work, but rather follows up, monitors and evaluates the implementation of those policies and decisions. n Conflicts of Interest – Board and Directors must take extra steps to avoid actual conflicts of interest and even the more appearance of such a conflict (e.g. relationship, personal interest or situation that may appear to influence, or actually does influence the judgement, decision-making or action of that Director. The relationship may be personal, professional or business related; either real or “perceived”. Responsibility of Director to disclose any possible BAKERSFIELD ASSOCIATION OF REALTORS®

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conflict to the Board. If conflict exists, Director shall be exempt or escused from any further discussions on that particular issue. n Diversity – The Board has the responsibility to do all it can to ensure the participation and involvement of all segments of the population, both professionally and culturally. Failure to have diversity means that some groups are over-represented, while others may be under-represented. n Care of Organization’s Property – As a fiduciary of an organization, it is incumbent upon a director to protect and care for any and all of the organizations assets, including buildings, real estate, equipment, copyrights, trademarks, goodwill and reputation. n Don’t Lie Unless You Have To Not! Honesty is not up for grabs! A Director must be honest, period! There is just no room for lies, cheating, stealing or dishonesty! If you discover another Director is dishonest, it is up to you to make the challenge. It takes courage and character! If you see a wrong, it is your obligation to d something about it… today… not tomorrow or net month! This is non-negotiable! n Meetings – Typically faceto-face. The Board of Directors meets frequently and regularly as directed by the Bylaws and laws of the state. Organized, structured, open and smoothflowing meetings should be the standard sought by every Board of Directors. Be considerate of others’ time. Prepare properly – review Agenda and all support documentation prior to the meeting. n Meeting Attendance –

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Directors are required to attend meetings, period. It should be a priority. Missing a meeting may result in a lack of quorum necessary to conduct business. Directors may miss important vote; may be perceived as not caring; may be unaware of what has transpired and miss the opportunity to personally contribute. Missing three consecutive meetings can result in removal or request for resignation. n Quorum – The number of persons legally required to be in attendance for the actions to be taken to be legal. It is a majority (better than half) of the members of the Board who are present at the meeting and ab le to transact business. If a quorum is not present, business cannot be transacted and the meeting has to be rescheduled. n Rules of Order – Without order, there is chaos. Parliamentary Procedure, Robert’s Rules of Order and the organization’s Rules of Conduct are used to allow for democratic speech and action, and maintain and preserve order during meetings. Directors have a duty to read and understand them to provide for a more efficient, constructive and orderly meeting. n The Ayes Have It! – An affirmative answer or assent. Nay – A negative answer. The President declares, “the motion passes” or the “motion fails” based on the number of Ayes and Nays. n Abstention - To ‘abstain’ means not to vote at all.” (Robert’s Rules, 11th ed., p 45.) A director might abstain because he believes there was insufficient information for him to make a decision. An

abstention may, however, have the practical effect of a “no” vote since a motion may fail for lack of sufficient “yes” votes. Our Board makes fact-based decision. If a Director feel there is insufficient information to make a well-informed decision, it is his/her responsibility to seek to understand by securing the necessary information. n Voting – The mechanism by which most of the decisions of the Board of Directors. Our bylaws address who is and is not qualified to vote. A person who attends the meeting in ‘non-voting’ capacity, can contribute suggestion, speak on issues and participate in the debate, however, by definition they cannot vote. n Ex-officio – “By virtue of the office.” Our President is an exofficio member of every committee of our Association, attending in a non-voting capacity. n Ballot – A method of voting as a alternative to a voice vote. Provides greater discretion in those cases where a Director does not want to reveal how they are voting. Written ballots are counted by two appointees “tellers”. The minutes merely reflect the actual count and whether the motion passed or failed. n Minutes – The official record of what takes place during the Board of Directors’ Meeting. They are brief and convey all actions that were taken and decisions made. Does not provide a narrative of the discussion, merely the actions taken. They are nor a public record. n Bylaws – The rules by which the Board of Directors and members are governed. They are the glue

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that holds the organization together, providing continuity and consistency. They are amended to adjust and adapt to changing times. Changes to the Bylaws require membership approval, unless the change is mandated by NAR. NAR mandated changes to our Bylaws merely require Board of Directors acknowledgment of acceptance. n Public Scrutiny - The Board is accountable to its members, which requires and openness and transparency in its action to ensure it is conducting its operations above the table. That being said, because we also operate as a not-for profit (Association) and a Charitable Foundation, we must also be able to stand up to the scrutiny of the public and IRS. n Reimbursement – Directors have the right to be reimbursed for reasonable expenses they incur on behalf of the organization. Submissions for reimbursement should always be accompanied by substantiating receipt, as required by the IRS. n Volunteer Protection – Is provided only if the Director acted in good faith and in the best interest of the organization. Per State and Federal governments, volunteer leaders are afforded certain protections. n Directors and Officers Insurance – The Association carries Directors and Officers (D & O) Liability Insurance, which covers the Directors and the Board from suits brought against them for legal activities, however will not cover illegal actions or acts. n Antitrust - Prohibits restraint

of trade; exclusion or expulsion of members for competitors; standards of certification programs that harm competitors; and price fixing discussions. Antitrust issues are a serious matter and have severe consequences. Be alert to what constitutes antitrust behavior, recognize it and then take appropriate action to discontinue and avoid such activities without delay. n Sarbanes-Oxley Act – Requires Directors’ accountability for financial condition of an organization. The SOA of 2002 outlines federal criminal penalties and auditing requirements. It calls for proper maintenance and retention of documents and records pertaining to the specifics of auditing the organization’s finances. Although most provisions of the SOA do not apply to nonprofit organizations, the themes of accountability should guide Directors’ behavior. n Forbidden Fruit – “Don’t dip your pen in the company ink.” Sexual harassment is an area that must be avoided at all costs and Directors must be informed and educated to avoid any appearance of harassment of any kind. He or she is the leader and may be liable under the law for inappropriate advances to staff members. n Lawyers - Legal guidance and advice is a necessity. Legal counsel should attend all Board meetings, review and approve the agenda, review and approve the minutes and offer advice as needed or appropriate. Lawyers should be careful to avoid any conflicts interests if also working

for members and their business. n Executive Sessions – Can lead to trouble and are discouraged. Typically are closed to staff and can damage the relationship between the Board and staff. They typically don’t have an agenda and discussions may wander and enter areas in which Directors should not be involved. Minutes are seldom taken even though they should be. They can easily turn into complaint sessions and a way for a director to promote their own selfish interests. Open meetings ensure that a personal agenda takes a backseat to the organization’s business. n Executive Committee – The generally recognized purpose of the Executive Committee is to make decisions or take action during the time lapse between Board Meetings or to fulfill other special duties assigned by the Board. However, the Board as a whole is responsible for the organization and cannot abdicate this obligation. The Executive Committee must keep Minutes of all its meetings, including conference calls. These minutes are then reviewed and approved by the Board of Directors at its next meeting. n Orientation – Directors are entitled to an orientation to the Board. Whether formal or informal, a new Director should be given the opportunity to learn abo the Board, e.g. strategic plan, objectives, policies, Procedures, tradition, fiduciary duties and more. Orientation for our Directors is provided at the Leadership Summit and by our Attorney at the first Board of Directors meeting of the year. BAKERSFIELD ASSOCIATION OF REALTORS®

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BOARD RESPONSIBILITIES

erving on the Board of Directors is a rewarding and important responsibility. This guide informs volunteer leaders of the unique aspects associated with governing a not-for-profit organization.

“The board governs… the staff manages.”

Leadership: Volunteer leaders are responsible for direction of the organization. The board governs, develops policy and sets a course for the future. Maintain focus on the purpose and strategic goals - avoid micro-managing the Association and staff. Functions: n Governance n Policy & Position Development n Visionary - Future Focus n Fiduciary Management: Paid staff and subcontractors are responsible for the administration of the Association. Staff acts as partners to the board, advancing the goals and strategies, while taking care of the daily administrative needs unique to nonprofit organizations.

Unique Terminology Not-for-Profit refers to the legal corporate status of the organization (It does not imply an exemption from paying or collecting state sales tax). Nonprofit is the casual reference to Not-for-Profit. Exempt Organization is a reference to the IRS designation exempting the organization from paying most federal income tax (with exception of UBIT - Unrelated Business Income Tax).

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IRS 501(c)(3) tax-exempt designation most often refers to organizations with a religious, charitable, scientific or educational purpose. IRS 501(c)(6) tax-exempt designation refers to trade associations, business leagues and professional societies.

1 lie

“You won’t have to do anything when you get on the board!” Board Responsibilities 1. Determine and advance the Association’s purposes and goals. 2. Select the chief paid executive (not staff) as well as CPA and attorney. 3. Support the chief executive and assess performance periodically - usually measured against the strategic plan. 4. Ensure effective organizational planning. 5. Ensure adequate resources (funds, time, volunteers, staff, technology, etc.) 6. Resource and financial oversight. 7. Determine, monitor and enhance programs, products and services. 8. Promote the Association’s image. 9. Ensure legal and ethical integrity and maintain accountability. 10. Recruit and orient new board members, and assess board performance. (Adopted from Ten Responsibilities of Nonprofit Boards www.BoardSource.org.)

Issues Facing Boards 1. Member Value, ROI, Participation 2. Diverse Technology Usage 3. Scrutiny on Governance, Purpose 4. Competition 5. Revenue 6. Diversity, Inclusivity 7. Generational Differences 8. Workforce - Staffing 9. Leadership Identification, Roles 10. Societal Benefit 11. Member Service Standards 12. Image, Branding, Positioning 13. Visionary v. Tactical 14. Accountability, Transparency Prioritize the issues as they apply to your organization.

Insurance and Volunteer Immunity State and federal governments have afforded certain protections to volunteer leaders. While the volunteer may have some protection, the organization is still open for legal suits. Insurance coverages add further protection for volunteers and organization. Directors and Officers (D&O Liability) may cover legal defense for employment, copyright, and antitrust claims, for instance. E&O Insurance covers judgment settlements and defense costs for services we provide or failed to provide that did not have the expected or promised results. General Liability Insurance covers property damages and injuries relating to the organization.

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Fidelity Bond covers losses resulting from fraudulent or dishonest acts committed by an employee. (Contact legal and insurance counselors for assistance.)

Legal Principles Duty of Care requires leaders to use reasonable care and good judgment in making their decisions on behalf of the interests of the organization. Duty of Loyalty requires leaders to be faithful to the organization, avoiding conflicts of interest. Duty of Obedience requires leaders to comply with governing documents (i.e. bylaws, articles of inc., policies, etc.)

Board Tools The operating documents of the organization are available to leaders. n Statement of Purpose (Mission) n Articles of Incorporation n Bylaws n Policy Manual n Strategic Plan n Financial Statement n Minutes n Organizational Charts treat information with confidentiality.

Rules of Order Agenda ensures that important business is covered and discussions are on topic.

Motions are proposed for action, beginning with, “I move we…”

Second is required for the

motion to be discussed. n Amendments

may be made to

most motions if they improve the intent or clarify the original motion. n Tabling

lays the motion aside.

n Calling

the Question refers to ending the discussion and voting on the motion. n Voting is the official action after discussion to adopt, amend, kill or table the motion. n Minutes protect the organization by recording the time and location of the meeting, participants, and the outcome of the motions. They are not a place to record conversations, assignments, reports, etc. (Including reports and discussions can incriminate.) n Quorum is number of directors required to conduct business. n Recommended: “ABC’s of Parliamentary Procedure” 800.477.4776.

“Committees recommend - board approves staff and volunteers implement.”

Committee Categories Organizations are streamlining - eliminating all but essential committees and aligning committee work with the goals. Task Force or Working Group – formed for specific or immediate needs and disbanded upon completion of the work (a.k.a. Task Force or Presidential Advisory) A standing committee is identified in the bylaws, appointed annually, on-going committee work. BAR Standing Committees include: Education, Equal Opportunity, Executive, Membership Development/Orientation, Grievance, Professional Standards, Strategic Planning and Finance, REALTOR® Government Review Advisory Council (RGR). A committee is a body of one or more persons that is subordinate

to a deliberative assembly. Usually, the assembly sends matters into a committee as a way to explore them more fully than would be possible if the assembly itself were considering them. Committees may have different functions and the type of work that each committee does would depend on the type of organization and its needs. Subcommittees – formed by a parent committee to share specific tasks within the jurisdiction of the full committee. Subcommittees are responsible to, and work within the guidelines established by, their parent committees. Advisory group/board/council – a body that provides nonbinding strategic advice to the management of a corporation, organization, or foundation. The informal nature of an advisory group/board gives greater flexibility in structure and management compared to the Board of Directors. Advisory groups/boards provide the President with advice from top experts Working group – a committee or group appointed to study and report on a particular question and make recommendations based on its findings. Quick Action Committee – acting quickly or in the shortest possible time. Forum – an occasion or a place for talking about a matter of public interest. Joint Committee - a committee with members from more than one organization. Brain Trust (Consultative Committee) and Change Agents BAKERSFIELD ASSOCIATION OF REALTORS®

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– A group from inside or outside the organization who helps an organization transform itself by focusing on such matters as organizational effectiveness, improvement, and development.

Common Sense 1. It’s a team; no individual has an agenda more important than the group. 2. Respect the chairperson and others. 3. Turn cell phones off. 4. Bring a calendar to meetings. 5. Wear a watch; arrive on time. 6. Prepare for meetings; read, read, read! 7. Stick to the agenda; no side bars. 8. Listen more than you speak. 9. Speak when you have an essential, clear point. 10. Respect the rules of order. 11. Leave personal and political agendas at the door. 12. Respect confidentiality. 13. Don’t speak for the organization without authority. 14. Support the actions of the board; don’t bad-mouth any action or person. Dissenting votes may be noted in the minutes - not outside the meeting.

Strategic Planning A strategic plan focuses the board on purpose, vision and goals for 2 to 3 years. It serves as a roadmap. [A board member should “plan beyond their term of office and outside their area of expertise.”]

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Environmental Scan - review of external and internal influences on the organization, as well as strengths, weaknesses, opportunities and threats (SWOT) Purpose - statement about what the organization is: whom it serves; and the services it provides; short with PR value. Value - long-term desired outcome; what the organization will be in the distant future. Goals - broad competencies of the organization to advance the mission. Usually just 3 to 7 so as not to tax resources, volunteers, staff. Strategies - advance the goals; creative efforts to achieve the mission and serve stakeholders/ members. Action Steps - fit within the strategies; identifying the actions, assignments, deadlines, etc. (May be delegated to the “operating plan” or “business plan” that supports the board’s strategic plan. Plan Champion - the person (staff and/or volunteer) who keeps focus on the plan.

Board Risks Protect the organization. The board should be aware of fiduciary responsibility, contracts, audit results, insurance, IRS requirements, values and ethics, apparent authority, antitrust, conflict of interest, etc. Public Records requests for the organization’s annual federal tax return (Form 990, 990-EZ) must be made available for the last three years. Significant fines occur for noncompliance. Antitrust Violations occur

when two or more persons from the same industry or profession discuss suppliers, processes, prices or operations. Remove yourself from any conversation that would change how business is conducted because of a jointagreement among competitors. Apparent Authority arises when a board chair, though not granting actual authority, permits a committee or chapter to behave as if it had authority. Authority rests with the chairman and may not be assumed by others. Financial Audits annually to protect board and staff. Conflict of Interest disclosed at the start of the term and throughout the year. Adopt a policy to affirmatively answer IRS Form 990.

Statement of Purpose The Bakersfield Association of REALTORS® is the leading advocate of the Real Estate Industry, its Members, and the community we serve.

Vision Statement Improving the real estate industry through professionalism and service.

Our Values Proposition n Ethical

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POLICYGUIDE 101

The Purpose of Policies

Definitions 1a: wisdom in the management of affairs

Policies are NOT Procedures Procedures are administrative or managerial, a documentation of staff responsibilities (they should be of minimal interest to the board.) For example, the steps for processing a new member are managed by staff and should be documented for consistency. The board should be concerned with membership trends but not administrative operations of recruitment and renewal. Procedures are often the result of policies. When the board adopts a policy, the staff should determine what steps are required to implement and maintain the policy. For instance, a board policy on the chairman’s use of a corporate credit card should create procedures for submitting receipts on prescribed forms and reimbursement deadlines.

Precautions While policies have multiple purposes, there are precautions: n Policies may not conflict with other governing documents or applicable laws.

MISSION (Purpose for Existence)

ARTICLES OF INCORPORATION (Relationship to State Government)

BYLAWS (Relationship to Members)

HIERARCHY

Policies guide an organization. They interpret the broader governing documents such as the articles of incorporation, bylaws and mission statement. They reflect the history of decisions by prior governing boards. Without policies volunteer leaders make assumptions as to why certain practices exist. Because boards frequently transition, polices support continuity in governance. Where no policies exist, boards tend to rehash discussions that were held previously. A policy offers a solution and avoids redundant debate. Policies may serve to protect an organization. In some cases a policy may be used as a defense. The fact that the policy exists may show that the board satisfied its duty of care and due diligence. While policies are considered a component of the governing documents, they are easier to adopt and amend than bylaws. Generally bylaws require notice and possibly approval by the members whereas policies can be adopted by the board. Policies clarify by giving authority to, or limiting actions. For example a committee may find they have no authority to expend funds on behalf of the board as communicated through policy.

2a: a definite course or method of action selected from among alternatives and in light of given conditions to guide and determine present and future decisions 2b: a high-level overall plan embracing the general goals and acceptable procedures especially of a governmental body

POLICIES (Interpretation of Governing Documents)

n Policies

are not amendments to the bylaws. n Policies may exist but no system has been created to retrieve and reference. n Polices should not be confused with personnel guidelines and/ or administrative procedure. n Policies may be vague, lengthy or unenforceable. n Too many policies (many organizations govern effectively with 20 to 40 policies.) n Believing that a policy exists when it has never officially been adopted. n Policies are always written – not to be confused with precedents or practices.

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Policies May Result in Procedures Board Governance

Staff Management

the action of a motion to adopt the policy --- and recording it in the minutes --- that makes the policy official. All policies can be traced to their origin in the board minutes. (It is a good practice to annotate the date of adoption when entering a new policy in a manual so its origination can be referenced.) Policy Manual – Though a policy is recorded in the meeting minutes, it is important to transcribe it into a form for access by future leaders and staff. Maintain a manual, log or on-line document that records all of the organization’s policies. n Update

Policy Development The flow chart depicts the development of policy. While not every policy will follow each step precisely, this represents a comprehensive approach. the Issue – When issues and discussions at the board table become repetitive, confusing or drawn-out, it may be a sign that a policy is needed. For example, an annual discussion of whether or not to have a financial audit could be guided by a previously adopted policy prescribing an audit every three years. n Identify

n Consistent

with Governing Documents – Before recommending a policy, check the governing documents (bylaws and articles of incorporation). If the governing documents are vague, then use policy adoption to clarify or interpret. Policies may not conflict with the governing documents.

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(Subordinate organizations may have a contractual relationship with a parent organization which will also serve as a source of governance guidance and which policy may not be adopted that conflict with the relationship.) Scan – How do other organizations solve a similar issue? Are sample policies available to discuss with the board? An environmental scan can expedite the development of policy. n Environmental

the Policy – The proposed policy or solution to the issue must be reduced writing. A committee, staff or consultant can draft a policy for board consideration. Clarity is essential. n Draft

Input – Because policy has long-term impact, consider seeking member input. Rely on the legal, accounting and insurance counsel in the development of policy statements. n Stakeholder

n Adoption

by the Board – It is

for Awareness – Policies have little value if the board and future leaders are not aware of them. As policies are adopted, be sure to inform impacted parties. n Distribute

IRS Policies Since 2008, the Internal Revenue Service (IRS) has focused on exempt organization governance by adding policy questions to Form 990, the annual information return. Most organizations have adopted such polices so they can be answered to the affirmative. n Financial

Audit and Audit Committee n Record

Retention and Document Destruction n Whistleblower n Disclosure n Public

of Conflicts of Interest

Records Disclosure

n Compensation n Maintaining

of Senior Staff

Meeting Minutes

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Errors in Policy Adoption Because most boards are composed of volunteers, they may not be specialists in understanding policy development. Here are frequent errors: n Amending the Bylaws – Don’t be swayed by the volunteer who says, “We need to get that in our bylaws.” Let the bylaws remain a broad governing document; the policies should interpret the bylaws but not be included in them. Documents - Policies may not conflict with existing governing documents. Policies interpret the bylaws and articles, not replace or supersede them. n Conflicting

Focus – Don’t let a board become mired in policy development. Issues will arise n Hyper

naturally that can be solved by policy. Rather that debate at the board table, ask staff, committee or counsel to bring a recommendation to the board.

of Association Executives, the American Chamber of Commerce Executives, Board Source, plus

in the Minutes – Some executive state, “We don’t have a policy manual but I can tell you exactly when it was adopted.” At least annually transcribe policies into a manual. Hint: When transferring the policy, reference the date of the meeting in which it was adopted or amended.

of policies in a nonprofit is 20

Scan – One can discuss for hours a suggested policy, or search for policy samples from similar organizations. Conduct an environmental scan of other associations and use the resources at the American Society

procedures. For instance, a policy

n Archival

n Environmental

legal and accounting counsel. n Policy

Mania – A good number

to 50. If the organization has hundreds of statements, many of which may be out-of-date, conduct a sunset review. Appoint a task force to review and recommend policies to add or delete. n It

Doesn’t End with Policy

– Nearly every policy results in on conflicts of interest will result in the need for procedures to educate the board annually, create and distribute a disclosure form, and to properly record conflicts in the minutes.

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SILENCE is not Governance BOB HARRIS

HARRIS MANAGEMENT GROUP, INC

You could hear a pin drop after I asked questions of the board of directors. Not a word. The directors avoided eye contact — turning to their executive director in hopes he would answer for them. The image of a meeting of the board of directors includes robust discussions and lively debates. Communication and curiosity is at the heart of good governance. Directors have a fiduciary duty to fulfill their roles. Officers or directors, whether inexperienced or seasoned, have accepted the duty to advance and protect the interests of the members, mission and organization. Being silent or absent at board meetings is not acceptable. A fiduciary duty is a legal duty to act solely in another party’s interests, for example on behalf of members.

Unique Approaches to Governance Directors sometimes have unique approaches to their roles on the board: n The Observer – “I think I’ll just study a few meetings before I speak up.” Or, “I don’t understand governance so I will just observe.” The problem with the observer is that each and every director has a vote and is expected to participate.

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Timid Director – He or she feels they have minimal experience and knowledge. “Others with more experience and the executive officers will probably say what needs to be said.” The insecure director should acquire the information they need about the organization, ask plenty of questions, and seek a boardbuddy or mentor. n The

– “The bylaws said we could have excused absences!” While the bylaws may allow for an absence, corporate governance requires the presence of directors. Even in their absence all directors have a liability for the decisions of the board. Because board seats are accepted voluntarily, there is a presumption that directors will allocate sufficient time to fulfill their duties. n MIA

frequently starts sentences with, “I just have a question.” In his or her mind the questions must sound “smart.” Then two or three other directors appear to help by answering the question that often has more to do with history and little to do with the agenda. Distracted – This director comes to the meeting but is quickly seen in the prayerposition typing text messages below the table. Using email and texting should be discouraged to maintain confidentiality. n Digitally

– A phenomenon occurs within groups where the desire for harmony overrides the duty to question and debate. Directors think other directors must agree so they don’t “rock the boat” and go along with it; making poor decisions.

of a Crowd – A director may feel they don’t need to be accountable, especially on a large board. They think, “It’s only a volunteer position.” Some directors don’t volunteer for anything in hopes others will carry the weight. Accountability should be emphasized at board orientation and enforced by the chief elected officer. All directors have a duty to participate in the governance process. The approaches of simply listening, avoidance or waiting to learn are not appropriate.

Chaser – This director seldom offers concrete ideas but

Note: Bob Harris, CAE, provides free governance tips and templates at www.nonprofitcenter.com

n Groupthink

n Rabbit

n Part

THE BOARD MEETING EXPERIENCE

LE A D E RSH I P RE S OU R CE S

BOB HARRIS

HARRIS MANAGEMENT GROUP, INC

eetings of the board of directors can be dreaded or difficult to endure. The combination of listening to reports, watching individuals promote personal agendas, a lack of focus on outcomes, and bad behavior of directors leaves some board members wondering if it’s worth their time. (It is no wonder it’s hard to get a quorum.) For example, a national association insisted the board hold conference calls monthly. They decided Sunday evenings would work. Because of time zones the call started at 9 and discussions

often rambled past midnight. The staff were told they had to join in the call, too. While nobody said it, these meetings were described as “painful.” Another association met quarterly but felt like they had to take advantage of the board’s time so they worked for six to eight hours. The agenda expanded to fill the time. The board did committee work and talked “shop.” Reading subsequent minutes might make one wonder what was accomplished.

The Positive Board Meeting Experience Conversely, a few associations have a well-planned agenda,

interspersed with visioning, insights and collegiality. The valued time of directors is used for governance and visionary discussions. When the meeting wraps up directors feel motivated. Very few associations have developed a formula for the ideal board experience. Rather than meetings in which board members attend because it is their duty, these organizations have developed techniques that leave directors pleased with the board experience. Camaraderie – Facilitate social interaction among board members to promote camaraderie. Arrange activities that might pleasantly BAKERSFIELD ASSOCIATION OF REALTORS®

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surprise the directors or add some fun. Consider “speed dating” where directors get to know each other or a contest with prizes rewarding volunteers who best know the association. Visionaries - Engage the board in visionary discussions; find opportunities to let their ideas soar. Directors should think beyond their term of office, positioning the profession, trade or community for 2020 and beyond. Dashboards - Avoid meetings built around reading and listening to reports. Diminish the length and number of reports by using dashboards to concisely depict information. The board should be steering the organization based on knowledge, not delving into minutia that are committee and staff responsibilities. Consent Agenda - Provide reports in advance of the meeting by using a consent agenda or distributing reports with the agenda as opposed to presenting them at the meeting. Strategy – Rely on a strategic plan to focus the board three to five years into the future. Keep the plan on the board table so directors consider it before making recommendations and motions. Access - Provide opportunities to hear from experts outside the

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board’s usual realm. Invite an author, elected official or publisher to share insights exclusively for the board. Directors appreciate having inside-information that might benefit their business or profession. Venue - Find an unusual venue for the meeting. Does it have to be an office or hotel conference room? What about exclusive access to a museum or a sports venue? Frequency - How often should the board meet? Many organizations govern with only three meetings a year, respecting the time of volunteers and staff. If there is not a good reason for the meeting, postpone it. Committees – Use only necessary committees to supplement the work of the board. The trend is to rely on task forces and quick action teams rather than yearlong standing committees. Be sure committees do their work in advance of board meetings and not at the board table. Breakouts - Make time for small group breakouts. Assign a particular issue for teams to resolve. Make use of the ideas and solutions from the groups. Break outs may encourage directors to contribute who remain quiet in front of the big board. Staffing - Include senior staff at

the board meetings to provide support. During meals have the staff spread out to get to know the directors. Have staff members host tables at lunch so directors can learn more about their roles. Right Size – Studies report the larger the board the less engaged directors feel. They realize they don’t have to attend or be accountable because they won’t be noticed. The IRS suggests the size of the board should facilitate meaningful discussions. Technology - Use technology so directors are looking at the screen (or on their computers) to ensure information is understood. Avoid a packet full of pages where directors get lost in the paperwork. Rating – Upon adjournment ask directors to rate the meeting and offer ways to improve it prior to the next board meeting. Before the year ends, have the board conduct a self-evaluation. Improvement should be a constant. Finally, celebrate the board of directors and their achievements. Include their photos on the website and let the community know these are the leaders and visionaries working to improve the organization. Note: Bob Harris, CAE, provides free governance tips and templates at www. nonprofitcenter. com

done LE A D E RSH I P RE S OU R CE S

CHUCK LAMB PAST PRESIDENT, C.A.R.

our term as the leader will be judged by whether you demonstrated clear vision, commitment and leadership. But it will also be judged by your followers’ feelings as to whether you were fair, allowed the body to make objective decisions and provided an opportunity for everyone to participate, demonstrating that you respect them and their precious time. The following will help you develop a “meeting management style” that will help you achieve the desired result.

Establish the ground rules It’s important to establish an understanding of your meeting management style. You may want to review the following with your group or Board just as I’ve presented it here. I’ve attached an abbreviated version of these guidelines for the members to

EFFECTIVE MEETING MANAGEMENT

Please keep to “one meeting”, remind them that this is a meeting, just one meeting. This means they should avoid side discussions. Let everyone hear your thoughts by waiting for your turn and speaking to the whole group. If you must have a side discussion, take it outside or at least whisper facing away from the meeting.

follow and later reference. You can use this outline and the scripts included to explain how to use their guide to effective meeting participation. Its starts with – “This will be our meeting process:” Meetings will start right on time, so please come early. Come prepared, tell them to read the materials in advance, formulate their thoughts independently and come prepared to express themselves. This alone will make their contribution truly valuable to the Board or Committee.

Turn off your cell phone. Every one of us has people who want to reach us, but we must prioritize our time and respect the time of the others in the meeting. Unless it is an emergency, they can wait to reach you. Please turn off or at least put your phone on vibrate and don’t answer it until you have left the room.

FOR LEADERS

Motion and Description, Discussion and Vote, in that order. On each item, only a brief description of the item will be heard before I will expect a motion on that item or we will move to the BAKERSFIELD ASSOCIATION OF REALTORS®

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next item on the agenda. To speak, just get my attention. To speak to an item, you need only get my attention. You won’t need to wave your hand or bounce up and down; I will be looking for you to raise your hand. When you see me look your way, just raise your hand until I nod. When I nod, you may take your hand down. I’ve noted that you want to speak and I’ve acknowledged you. I will take you in the order you were acknowledged; except that I will seek balance. If all the first speakers favor the item I may ask for those opposed. If a lot of you wish to speak, or if I believe everyone needs to comment, I will move from my left to right around the room. I may limit the amount of time of each speaker to one or two minutes. Please add to the body of knowledge, don’t just restate what others have already said. Your vote will be your expression of agreement or not. If you have a new thought or new fact that’s important for all to hear, we certainly want you to share. Too often people have simply restated what others have said and it doesn’t add to the body of information or our ability to make the best decision. It’s usually an expression that they think they are better salespeople than the people who made the original statement, and they want to sell the idea harder. It might feed your need to express yourself but just takes more of everybody’s time. We are all capable of reorganizing the information stated to its logical order in your own minds.

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Make your motion clear, concise, and complete. Think it through before you make it. Sometimes it’s helpful to answer the “who, what, how, when, where, and for how much” questions while you draft the motion. For the more complex motions, please write it out before you make it. The maker of the motion will always get to speak first to the motion. This means generally only once. The maker will not be able to defend or to filibuster every critical comment made about their motion. So, make sure you are clear and complete in your brief opening argument for your motion. Minimize your “war story” examples. Sometimes a war story is the very best way to express your thought or why you are so strong on a certain perspective, but it generally means more to you than it does to others, so it may not help you sell your argument. War stories always take more time than the simple explanation. I will seek differing opinions. When everyone speaking seems to be speaking on the same side of the motion, I will assume you are ready to vote and I will state, “the Chair seeks a differing opinion. If there is none, I will end discussion.” I will state that “the Chair senses you are ready to vote” and move to the vote on the motion. I will repeat the motion just before you vote. You need to check your own memory and me. Make sure the motion or amendment I state is what you

thought you were voting on. Let’s keep it friendly. It’s important to keep the atmosphere friendly and creative. Remember that everyone here is a volunteer. They don’t get a paycheck and they need to feel valuable. They deserve respect for sacrificing their time and energy to this job. Allowing a member to attack another member personally, even with a “cutesy” remark, will destroy the friendly and creative atmosphere. It will set a new minimum standard for your discussion level and put everyone in the room in an emotionally protective mode. Then nothing creative can be accomplished. The minute a temper flares, take back the floor. Remind everyone of the need to respect others’ opinions and their personal perspectives. Discuss other elements of the motion until you sense that emotions are settled down. You may need to make a statement about respecting each other’s opinions and that “We all come here to do this job right. Given our various backgrounds, we simply see the answers differently. It’s important that we give each other the benefit of the doubt and try to clearly understand the other person’s views. Let’s treat each other with a professional level of respect, can we?” Each of us has a limited amount of times we can speak without boring everyone in the room. If you want to maintain a level of respect when you speak so that everyone will pay attention to what you are saying, then think of yourself as having only

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six filter bullets in your “speaking to motions gun”. Use them prudently. Don’t take defending your motion too seriously. If your motion is a good one and you followed these guidelines in making it, then it will have its best chance of being passed when you have not had to constantly ask to speak to counter what someone else has said or to answer their questions. Let’s always have a good time. Let’s learn some good stuff, do some good work for the members and in this way, let’s be sure our time and energy is spent wisely.

Most Useful Motions – Tell your members that the following are motions they may wish to use. I move that – as soon as you have formulated a clear and complete motion that you believe is the correct direction for us to approve, please make your motion. The chair will re-state the motion at this time for clarity.

I move to amend the motion. Use this motion to make changes to the elements within the window of motion. Example: the original motion reads: Susie moved “that we hold a bake sale fund-raiser to raise money for our local legislative PAC.” You might offer to amend it to say let’s hold it on Saturday July 7th at the Elks Lodge. But if you moved that we should amend the motion to raise money by putting on a Fifty’s party and to put an item on the dues billing and then fund the installation dinner with it, this motion would be outside the window of the main motion and, therefore, inappropriate. You might need to speak negatively to the main motion and suggest that you will offer a new motion following action on the main motion. As tempting as it may be, this is not a place for a substitute motion either. Remember, the substitute motion is an amendment and must, therefore, be within the window of the main motion. This one addresses only a small portion of the main

motion’s subjects. I move to bifurcate (divide) the motion. Use this motion when you feel there are separate elements of a motion that you think are important to address separately. Example: a motion to hold a bake sale to raise PAC money might be bifurcated into a motion to hold an event to raise money for your PAC and another to decide whether a bake sale is the most effective event to raise the money. I move to substitute the following motion for the motion on the floor. Use this motion when you want to kill the existing motion and believe you have a related plan that members may find more palatable than the current motion. I move to table the motion. Use this only when you are interrupting the meeting for an emergency or at least to interrupt the meeting for what would seem more urgent business. Example: “The building is on fire, the President of the United States just walked in, someone just had a

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heart attack in the hallway.” This motion is not debatable and could create a huge liability if you don’t allow discussion when you should have. So, don’t use it to postpone an issue or just stop the process on an issue. I move the previous question – This is a motion to vote on the current subject and motion on the table. The Chair may see it as a motion to end debate and state it as such. This is at the discretion of the Chair. If the Chair feels that the debate has been exhausted and the body is ready to vote, they may go right to the vote, stating, “I sense you are ready to vote on this motion.”

To postpone an issue, make one of the following motions I move to postpone to --- (to a time certain). Usually to the next meeting or some specific meeting when the item can appropriately be addressed. I move to postpone indefinately. Usually this is used to try to stop addressing a sensitive issue without having to vote it down or pass it. But understand that it can be returned to the table at any time after this meeting session or series of sessions such as C.A.R.’s two-day directors meetings. To postpone it indefinitely is to suppress it throughout the current session. Point of Order – This motion has high precedence and must be taken up immediately. Use this motion only to question the motion process, whether this motion is appropriate given your bylaws, or whether this

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item should be addressed after something else on the agenda. If your reason for calling a Point of Order involves any of the action items or operative language in the motion or discussion, the “Point of Order” is likely an inappropriate motion. Parliamentary Inquiry – This motion is in order at any time and must be taken immediately. Use this motion to question the operative language of the motion, the chair’s procedure, or any possible use of Parliamentary motions or processes. Example: “Parliamentary Inquiry, Mr./ Madam Chair, is the motion Joe just made to table the main motion appropriate? It appears that his sole reason is that he just doesn’t like the motion. Is this then a proper use of the “motion to table”? Shouldn’t he consider a motion to “postpone to a time certain” or to “postpone it indefinitely”? Point of personal privilege – When a member feels personally maligned or that some other member’s statement reflected on them personally, they may want to clear it up and ask for a moment to make a “Point of Personal Privilege.” This is appropriate and must be addressed immediately.

Clearing up the myths Myth 1 – All motions must be seconded. No, they don’t; at least motions made by a committee Chair who is a member of the voting body doesn’t. For example, a Committee of your Board of Directors chaired by a Board Member doesn’t need a second. They have a whole committee that seconded it. Also, you don’t need

a second to enter a name into consideration on a ballot. Myth 2 – Parliamentary procedure must be followed to the letter. No, it doesn’t. Any words, which essentially convey what is intended and which are in accordance with the proper (parliamentary) procedure or your own Board Rules is just fine. Example: “I move the previous questions.” That’s correct, but so is, “I move we vote on that now,” if there is clear intent it will work. But get the operative functions right. Make sure you have seconds when one is required. Don’t let motions that disallow discussion go forward if they should have had discussion, and so on. Myth 3 – A substitute motion is a separate motion. No, it’s not; it’s a motion to amend. If you have already had two amendments and they are still pending, you can’t offer a substitute motion. If you address the amendments and vote them up or down, you can still offer additional amendments or a substitute motion; you just can’t have more than two motions pending a vote at the same time. Myth 4 – Yelling “Question” or “I move the question” can cause the body to have to vote immediately on the motion. No, it can’t. The Chair hasn’t recognized the speaker so it’s irrelevant. Just skip it or you will invite it often. The chair has already explained their process for being recognized by the Chair. You may want to remind them, but don’t honor that request or you may deal with it regularly.

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Myth 5 – If recognized by the Chair, the speaker then says, “I move the previous question.” The Chair must act to take the vote at that time. Not necessarily. If the Chair feels that there has not been enough discussion and wishes to hear more discussions (remembering that the point of all this is an orderly, full debate) he/ she can exercise the prerogative of the Chair and hold that motion. However, the speaker can appeal the action of the Chair and the Chair must put the appeal to a vote of the body. It requires a second and a 2/3 majority vote if the chair is not supported by a vote of the body; the ruling is overturned and the body will then vote on the main or in-line subsidiary motions. Myth 6 – The Chair can change the agenda at will. Actually, they can’t. The agenda is usually approved at the beginning of the meeting. Once approved it takes two thirds vote to amend

the order. However, were the Chair to say, “Unless there is an objection, the agenda will be altered as follows,” and no objection is raised, then consensus is assumed and the body has accepted the action of the Chair. Myth 7 – It’s OK to table a motion you don’t want to see voted on. Don’t do it. The motion to table has already been addressed above but basically, it’s to interrupt for an emergency reason and doesn’t allow discussion. The appropriate motion is to move postponement to an indefinite time or simply, “I move to postpone this indefinitely.” What differentiates it is that, “If there is no objection, I will adjourn the meeting”. If there is no objection, then the Chair is acting with consensus and it’s OK.

The Leader’s Tips for Great Meetings Prepare your agenda early and become very familiar with it.

Anticipate questions certain members of your board or committee are liable to raise. Ask staff about those questions and both you and the staff should be prepared to address them. Formulate what you think is the best decision on each subject, but don’t become committed to it or you could end up falling on your own sword. By that, I mean you should demonstrate that you are objective and neutral. It’s usually advisable to have someone else make the motion or say what you think. It’s not your decision; it’s theirs. Show up early. Be there to greet most of the members personally. This begins a personal dialog that puts each member in a better frame of reference toward the committee and you as his or her leader. They will give you some slack if they think you know and respect them. Believe me; you are just human; you will need some slack from time to time. BAKERSFIELD ASSOCIATION OF REALTORS®

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So, have a personal dialog with each, establishing that you have an interest in them personally. Start on time and tell them that you are always going to start on time; then always do it. The committee chair should make the motion. If it comes from a committee and the chair is a member of the Board or body; if they are a member of your Board, for example, and it’s a committee of the Board, then a second is not necessary. If they are not members of the Board or body, then a member of the Board must make the motion and it must, then, be seconded. The meeting chair should then restate the motion and open the discussion. For example: “The motion on the floor is to rebuild our website making it more user friendly and including more links to ancillary services at a cost not to exceed $5,000. Is there discussion?” Put incidental items early on the agenda and meaty issues in the middle. This is for practical reasons. The middle of the meeting time is when you are likely to have the most members present. But it’s also the time they are most creative. They tend to develop shorter attention spans over time and get glazed over toward the end. Some leaders would say that late in the meeting is the time to put the items they will spend the most time talking about; it will cut down on the extra dialog. My thought is that early is the time to get the yes/no simple items on the agenda. If you are expecting

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creative thinking keep it in the middle of the agenda. Keep in mind that large dollar numbers are usually easy to address in a committee because they can’t personally identify with those very big numbers; but when you address something that they deal with every day, or a cost number they have personal experience with, you can expect a protracted dialog. They can really get into that. Don’t cater to abusers. Stop them. Do it respectfully, but do it anyway. Some members never have an unexpressed thought. They seem to think that everyone is entitled to know everything they think. Sometimes it’s necessary to have an “off-line” discussion out in the hall. You may want to meet with them before the next meeting to explain how disruptive it is to have one member speak on every subject. You may want to point out that they don’t need to express their every thought. Usually, if they will wait, someone else will express the very same thought and they won’t have used up one of their “fair share” opportunities to speak, or they may decide that it doesn’t need to be said at all. Some members want to clear up every personal misconception and confusion in their understanding of the business. You may need to explain that this is not his or her personal council for advice. They need to keep the perspective of the whole association and the whole Board of Directors in mind in the discussion.

Keep the rhythm; Keep the pace and the dialog directly on the motion on the floor. If they go astray, stop them and remind them what is on the floor and get back on track. Again, it’s about respect for everyone’s time and your actual purpose. Most of the time, a protracted discussion needs to be referred back to committee. A Board of Directors should act like a Board of Directors, not a committee. Deciding what level of discussion should be allowed at the Board’s level is an art. Allowing too much discussion disrespects the committee, wastes precious Board time and generally destroys the morale. It’s helpful to ask yourself if this is the kind of thing you would really like to have dissected carefully. If it is, the subject needs to be referred back to committee, not re-discussed here at your Board Meeting. Always end on a positive note. “This was a very good meeting. We took care of a lot of important business for the members. I want to thank each of you for your contribution.” Or something even more pertinent to the actual business of the day, thanking certain people for their outstanding contributions is a real plus. Following these guidelines will have your Board or Committee members respecting your management style and enjoying the process. They will know what to expect and they can expect to get the job done in a timely manner.

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2019 C.A.R. AND NAR Directors Meetings 2019 C.A.R. DIRECTORS n Athena Collup n Ronda Newport n Scott Knoeb n Derek Sprague n Sheri Anthes n Midge Jimerson n David Knoeb n Theresa Olson C.A.R. Region 12 Regional Reps 2019 Appointments n David Knoeb, Immediate Past Chair n Investment Housing Committee- Regional Representative – Scott Knoeb n Land Use and Environmental Committee – Regional Representative – Derek Sprague n Legislative Committee – Regional Representative – Theresa Olson n Taxation and Government Finance Policy Committee – Regional Representative – Midge Jimerson n Transaction and Regulatory Policy Committee – Regional Representative – Ronda Newport n 2019 Immediate Past Chair and Nominating Committee Representative – David Knoeb n AE Advisory, SPF Committee, Tax Portability Task Force – Linda Jay n NAR Governance Game Changer Presidential Advisory Group– Derek Sprague C.A.R. 2019 MEETING SCHEDULE Winter: January 29-February 2 Indian Wells, California n Hyatt Regency Hotel n Renaissance Hotel

Spring: April 30 - May 4 (Legislative Day – May 1) Sacramento California n Sheraton Grand Hotel n Hyatt Regency Hotel n Sacramento Community Convention Center Fall: September 24-28 (Tentative) Location: TBD C.A.R. Leadership Symposium September: Fall n LAX Hotel TBD C.A.R. Director meeting and reimbursement policy is as follows: The CEO will make room reservations and other travel arrangements as applicable and unless otherwise requested. Leadership/C.A.R. Director deems it necessary to change his/her reservations, such changes shall be noticed to the CEO for modification. All room modifications/ confirmations must be completed one week prior to arrival at all conferences/events. CEO will make arrangements, on site, to cover the cost of conference room accommodations, overnight parking and customary meals charged to your room folio Directors will be required to provide a credit card, on site, for incidentals (e.g. adult beverages, movies, etc.) Upon check out, Directors shall obtain a copy of their room folio for submission to the CEO. CEO will also make group dinner reservations/purchase tickets to special conference events, inaugurals, luncheons and evening dining as deemed appropriate. Directors may submit

a “Request for Reimbursement” for out-of-pocket expenditures related to attending C.A.R. and NAR Meetings/Conferences (e.g. mileage, miscellaneous transportation costs, etc. – support documentation/receipts required). Association Leadership/C.A.R./ NAR Directors are responsible for attending all applicable Regional Caucus, Director and Committee meetings. 2019 NAR DIRECTOR Jeanne Radsick, Director State Allocated NAR MEETING SCHEDULE TBD Association Executive’s Institute March 28 - April 1 Linda Jay, CEO Austin, TX REALTORS® Legislative Meetings/Expo Athena Collup, 2019 President May 13-18, Washington, DC GAD Institute (TBD) Kim Schaefer, GAD Leadership Summit Ronda Newport 2019 President Elect August 11-13 Chicago, IL Annual Governance Meetings/ Conference/Expo Ronda Newport 2019 President Elect November 6–11 San Francisco, CA BAKERSFIELD ASSOCIATION OF REALTORS®

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2019 DIRECTORS

and Strategic Planning Meetings 2019 GE/MLS

n Wednesday,

n Tuesday,

April 9, 2019, 1:30

2019 Strategic Planning and Finance

n Tuesday,

June 11, 2019, 1:30

n Tuesday,

August 6, 2019, 1:30

n Tuesday,

October 1, 2019, 1:30

n Tuesday,

December 3, 2019,

BOARD OF DIRECTORS SCHEDULE n Tuesday, February 5, 2019, 1:30

1:30

2019 Association

BOARD OF DIRECTORS SCHEDULE n Wednesday, February 6, 2019, 1:30 n Wednesday,

April 10, 2019, 1:30

n Wednesday,

June 12, 2019,

1:30 n Wednesday,

August 7, 2019,

1:30 n Wednesday,

October 2, 2019,

1:30

BAKERSFIELD ASSOCIATION OF REALTORS®

December 4, 2019,

1:30

n Tuesday,

January 22, 2019, 1:30

n Tuesday,

March 25, 2019, 1:30

n Tuesday,

June 10, 2019, 1:30

n Monday,

July 29, 2019, 1:30

n Monday,

September 23, 2019,

1:30 n Tuesday,

November 19, 2019,

1:30

2019 Annual Membership Meeting

Attendance is required for all Association and GE/MLS Directors n Wednesday,

10am

June 26, 2019,

Special Meetings of the BOD and SPF Committee to be scheduled

as needed. Per Association and GE/MLS policy, after three absences of regularly or specially called meetings, the Director would be subject to dismissal from their respective position. Any extraordinary absences to be cleared by the Executive Committee.

Timeline for the Nominating Process: n Monday,

March 4, 2019 Notice of Election – Invitation for Officer/Director Applications n Friday,

April 5, 2019 Applications Due n Monday,

April 15 – Friday, April 19, 2019 Candidate Interviews n Monday,

May 13, 2019 Ballots Sent Out n Wednesday,

June 14, 2019 Election Closed

LE A D E RSH I P RE S OU R CE S

2019 MAGAZINE Submission Schedule February / March Issue Submissions Due: Monday, January 7th Cover/Theme: Introducing the new President

2018 REALTOR® Magazine Covers

April / May Issue

Submissions Due: Monday, March 4th Cover/Theme: Community

June / July Issue Submissions Due: Monday, May 6th Theme: Legislative

August / September Issue

Submissions Due: Monday, July 1st Cover/Theme: Highlight of our committees and volunteers

October / November Issue Submissions Due:

Tuesday, September 3rd Cover/Theme: Year in Review

IF YOU’RE INTERESTED IN SUBMITTING AN ARICLE OR KNOW OF A GREAT STORY, CALL

Carol Duran at 661.635.2307 | email: carol@bakersfieldrealtor.org

2019 ASSOCIATION HOLIDAYS Schedule n Martin Luther King Monday, January 21 n President’s Day Monday, February 18 n Memorial Day Monday, May 27 n Fourth of July Thursday, July 4

n Labor Day Monday, September 2 n Staff Development Day – TBD n Thanksgiving Thursday - Friday November 28 - 29

n Christmas Tuesday - Wednesday December 24 - 25 n New Year Tuesday - Wednesday December 31 - January 1

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GUIDELINES Communications/Promotions Special Events

Mixers, Community Events, Annual Golf Tournament, Bringing Home the Cure – Wine Tasting, etc.

Magazine 1/4 - 1/2 page ad (as space permits) Connections save the date mention Connections banner with link to flyer Event listed on TV’s Banner posted on .org and MLS Poster for lobby (as needed) MLS broadcast notice Facebook posting Twitter Separate email blast(s) Flyers/poster to large broker offices Bakersfield Life/Californian newspaper Press release/community calendars for events open to the public

Issue closest to event date (discretion of Editor) 5-6 weeks prior to event 4-5 weeks prior 2-3 weeks prior 2-3 weeks prior 1-2 weeks prior (at discretion of the Association) 1-2 times prior 1-2 posts per week Coordinated with eblast 4 blasts (three prior to the event; one several days prior) 2-4 weeks prior (as needed) 1-2 weeks prior (when appropriate) As appropriate

Monthly Programs - RGR, Commercial Investment, MLS Open Forum, etc. Magazine Connections save the date mention Connections banner with link to flyer Event listed on TV’s Banner posted on .org and MLS MLS broadcast notice Poster printed Facebook posting Twitter Separate email blast(s)

Issue closest to event date (used when appropriate) 5 weeks prior to event 2-3 weeks prior 2-3 weeks prior 2-3 weeks prior 1 week prior 2 weeks prior (as needed) 1-2 posts per week Coordinated with eblast 4 blasts (three prior to the event; one several days prior)

Education Classes Connections listing with link to flyer Event listed on TV’s Banners posted on .org and MLS (as needed) MLS broadcast notice Poster printed (for select classes only) Facebook posting Twitter Separate email blast(s)

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2-3 weeks prior 2-3 weeks prior 3 weeks prior As needed 2 weeks prior (as needed) 2 posts per week Coordinated with eblast 4 blasts (three prior to the event; one several days prior)

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8 9 10 11 12 13 14

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15 16 17 18 19 20 21

22 23 24 25 26 27 28

20 21 22 23 24 25 26

29 30

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NOVEMBER su m t

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DECEMBER su m t

1 2

1 2 3 4 5 6 7

3 4 5 6 7 8 9

8 9 10 11 12 13 14

11 12 13 14 15 16

15 16 17 18 19 20 21

17 18 19 20 21 22 23 24 25 26 27 28

29 30

22 23 24

25 26 27 28

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Leadership Attributes Checklist for Leaders

Check to see how you are doing as a leader. Use this to help yourself become a more successful leader.

People Management 1. Clearly communicates expectations 2. Recognizes, acknowledges and rewards achievement 3. Inspires others to perform in ways they would not without the leader’s support and direction 4. Puts the right people in the right positions at the right time with the right resources 5. Persuades/encourages people to achieve the desired results for themselves and organization 6. Looks out for people’s well-being as well as the organization’s well being 7. Identifies signals of impending conflict and deals with the sources effectively 8. Holds people accountable 9. Encourages and values human capital development in the organization and allocates sufficient resources to this endeavor 10. Encourages people to stand up for and express their beliefs 11. Creates an environment where all persons can speak the truth as he or she sees it without concern for retaliation 12. Able to empathize with those he or she leads 13. Demonstrates strong commitment to diversity and change improvement 14. Is innovative and open to new ideas 15. Treats people fairly. Respects and values their opinions and ideas

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Yes

Somewhat

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Leadership Attributes Checklist for Leaders (continued)

Strategic Management

Yes

Somewhat

16. Flexible. Can adapt to changing circumstances 17. Sets, with input from all stakeholders, the long-term direction for oneself and for the organization 18. Understand the environment, social trends,competitors, clients/customers and all stakeholders 19. Correctly analyzes the risks of all decisions 20. Correctly analyzes the returns of all decisions 21. Can develop and implement strategies to improve organizational strengths and combat the weaknesses 22. Identifies appropriate partners, strategic alliances and outside resources to help further goals 23. Demonstrates strong commitment to diversity and change improvement 24. Always looks for improvements - never satisfied completely with the status quo 25. Can articulate the organizationâ&#x20AC;&#x2122;s values and develop strategies with the core values

NOTES ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ BAKERSFIELD ASSOCIATION OF REALTORSÂŽ

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Splitting Responsibilities Activity Determine who would be responsible to complete each of the following tasks. You may check more than one box if necessary.

President

1. Act as official spokesperson for the association 2. Conduct performance evaluation of chief staff executive, personnel communication, executive communication 3. Make recommendations to the Board of Directors on ways to promote the education offerings of the association 4. Approve the annual budget 5. Monitor and ensure the effectiveness of the association’s public relations efforts 6. Oversee property management of the association facility 7. Chair the directors’ meeting 8. Write and distribute press releases 9. Approve by-law changes 10. Attend the strategic planning session 11. Make recommendations on ways to educate members on legislative and regulatory 12. Book meeting facilities 13. Monitor the strategic plan

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Board of Directors

AE and/or Staff

Committee/ Task Force

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Signs of a Productive Association – Self Assessment Often

Sometimes

Seldom

1. We use a clear mission, vision and core values to help us make better decisions and achieve our objectives 2. We understand who our members are and listen to what they have to say 3. We understand the nature of change and work together to make change a positive experience for all 4. We redefine the volunteers’ roles and responsibilities, recognizing the natural decline in volunteerism 5. We clearly define the roles of paid staff and volunteers 6. We look at the ‘big picture’ when making decisions and implementing services 7. We take a professional, businesslike approach to running our Association Where you answered “sometimes” or “seldom”, there is opportunity for improvement. Ask yourself “What could I do?” Write own a few ideas of how you could help your association become more productive.

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Signs of an Effective Leader – Self Assessment

Assess how effective you are as a leader and what you can do to improve Often

1. Vision - I have a clear, vivid picture of what I need to achieve, as well as a firm grasp of what success looks like and the steps I need to take to get there. 2. Integrity – I adhere to a strict moral or ethical code. I exhibit honest dealings, predictable reactions, well controlled emotions and an absence of harsh outbursts. 3. Dedication - I spend whatever time or energy is necessary to accomplish the task at hand and I inspire dedication in others by example. 4. Generosity of Spirit - I give credit where credit is due and ensure that credit for successes is spread as widely as possible throughout the organization. I also take personal responsibility for failures. 5. Humility – I recognize that all members of a team contribute in their own way. I am not self-effacing; rather I try to elevate everyone to be the best they can be. 6. Openness – I listen to new ideas, even if they do not conform to the usual way of thinking. I am able to suspend judgement while listening to others’ idea and accept new ways of doing things. 7. Fairness – I deal with others consistently and justly. I check all the facts and hear everyone out before passing judgement. I avoid leaping to conclusions based on incomplete evidence. 8. Clarity in Expectations – I clearly state what I expect of others so that there are no more misunderstandings and I clearly understand what others expect from me.

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Sometimes

Seldom

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GEMLS

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doneY O U ’ R E

INVITED! SAVE THE DATE: JANUARY 25, 2018

LE A D E RSH I P RE S OU R CE S

Inaugural Celebration Dinner & Dance HONORING

Join us on. . . January 25, 2019 LUIGI’S WAREHOUSE 725 EAST 19TH STREET

6pm: No Host Cocktails 7pm: Dinner and Program 9pm: Dancing Cocktail / Formal attire Black Tie optional

173 R E S E R V E Y O U R S E AT N O W ! C O N T A C T C I N D Y AT 6 6 1 . 6 3 5 . 2 3 1 5 BAKERSFIELD ASSOCIATION OF REALTORS®

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