Procuring cause arbitration is the private process the National Association of REALTORS uses to decide which broker earned the commission when two firms claim the same sale. A panel of peers looks past who listed the home or whose name is on the closing documents and asks a single question: which broker started an unbroken chain of professional effort that led the buyer to buy? Article 17 of NAR’s Code of Ethics makes this process mandatory for REALTORS at different firms, meaning you resolve the dispute through your local board rather than in court.
What Procuring Cause Actually Means
Procuring cause identifies the broker whose continuous professional effort led directly to a completed sale. The panel isn’t tallying who showed the property first or who wrote the winning offer. It’s tracing a sequence: first contact, relationship building, showings, negotiation, closing. If that sequence stayed alive without a meaningful gap, the broker who began it generally prevails. If it broke somewhere along the way, the broker who stepped in and finished the work may walk away with the commission instead.
Agency relationships alone don’t settle the question. A signed buyer representation agreement helps, but a broker can hold one and still lose if they didn’t do the work that actually caused the sale.
What Breaks the Chain
Most procuring cause disputes turn on whether the first broker’s chain of effort stayed intact. Panels recognize two distinct ways it fails, and the distinction matters when you build your case or your defense.
Abandonment means the broker stopped doing the work. Calls go unreturned, follow-up showings don’t get scheduled, weeks pass with no contact. The panel asks whether the broker’s inactivity reasonably led the buyer to conclude the broker had moved on. A long communication gap is often fatal. If you weren’t actively helping the buyer, arguing you caused the purchase is a steep climb.
Estrangement is different. The broker stayed engaged, but their behavior drove the buyer away. Pushing properties the buyer didn’t want, failing to submit an offer when asked, being unresponsive at the moment it counted — any of these can sever the relationship even while the broker is technically still in the picture. The question is whether something the broker did, said, or failed to do caused the buyer to end the relationship.
Either one can shift the commission to a second broker who picked up the work and finished it. Panels expect substantive engagement from first contact through closing. Passive involvement does not survive scrutiny.
What the Panel Weighs
NAR’s Appendix II to Part Ten gives hearing panels a framework of considerations. It isn’t a scorecard, and panels are told to decide each case on its own facts and ignore rules of thumb or decisions from other panels. Still, knowing what gets examined helps you prepare.
- Who first introduced the buyer to the property, and whether that introduction is what created the buyer’s interest. If the buyer already knew about the home independently, the introduction carries less weight.
- What each broker actually did — showings, market data, negotiation, problem-solving — versus simply opening a door.
- Whether the original introduction began an uninterrupted series of events leading to closing, and if there was a break, who caused it and how long it lasted.
- The buyer representation agreement itself: exclusive or non-exclusive, and what compensation terms it specifies.
- The buyer’s conduct, including whether the buyer acted in bad faith to cut a broker out of the deal.
- The seller’s conduct, including straw transactions or deliberate efforts to avoid paying compensation.
Panels also look at the listing agreement, any offers of compensation and their terms, and whether required disclosures were handled properly.
Filing the Claim
The deadline is 180 days after closing, or 180 days after the facts giving rise to the dispute could reasonably have been discovered, whichever is later. Miss the window and you generally forfeit the right to arbitrate through the association. One exception: if you started an informal process the board offers (mediation or an ombudsman service) before the deadline, the 180-day clock pauses from the date you requested that service and resumes when the informal process concludes.
To file, the complainant completes Form A-1 (REALTOR members) or Form A-2 (nonmember MLS participants), obtained from the local or state association. Filing fees typically run $250 to $500 and are generally nonrefundable.
Documentation decides most cases. Before you file, assemble:
- A detailed contact log with every interaction with the buyer — dates, times, what was discussed, and the medium (phone, text, email, in person).
- Written agreements: your buyer representation agreement, any compensation agreements, and the listing documents tied to the transaction.
- Communication records — emails, texts, and phone logs — that show continuous engagement.
- Transaction documents: showing confirmations, offer submissions, inspection reports, anything proving substantive work toward closing.
- A chronological narrative tying it all together from first contact to the dispute.
Mediation First, If Your Board Requires It
Article 17 requires REALTORS to mediate when the local board mandates it. If the board doesn’t require mediation, or if mediation fails, the case proceeds to arbitration. Refusing to mediate where it’s mandatory can itself be treated as a complaint before the Board of Directors. Boards cannot expand the mandate beyond what the Code of Ethics authorizes. A mediator who tries to resolve a case cannot later sit on the arbitration panel for that same case, and any settlement reached in mediation must be put in writing and signed.
The Hearing
The association assembles a panel of peers. Both parties receive a list of potential panelists and can challenge individuals they believe may be biased; the chair then selects three or more from the unchallenged names, with REALTORS making up the majority.
You can bring an attorney, but you must notify the board and the other parties at least 15 days before the hearing with your lawyer’s name, address, and phone number. Arrive with counsel without notice and the panel will likely grant a continuance so the other side can arrange representation. Attorneys may give opening statements, call witnesses, and cross-examine, but they generally cannot testify unless the panel finds their testimony essential to due process. The board may have its own counsel present to advise on procedure; that counsel does not question witnesses or deliberate.
The hearing follows a set sequence: opening statements, evidence and testimony from both sides, responses, then private deliberation in executive session. The decision comes to the parties in writing.
Burden of Proof
The complainant — the broker who requested arbitration — carries the burden throughout. The standard is preponderance of the evidence: the panel decides which version of events is more likely true than not. You don’t need to prove your case beyond a reasonable doubt, but your evidence has to outweigh the other side’s. If it comes out evenly balanced, the complainant loses.
After the Award
The losing party has 10 days to either pay the award or deposit the same amount in escrow with the association’s Professional Standards Administrator. Doing neither can be treated as a violation of membership duties and lead to discipline.
There’s no appeal on the merits, but the losing party has 20 days to request a procedural review by the Board of Directors. That review examines only whether the hearing followed the association’s procedures and whether both sides received due process. No request within 20 days and the award becomes final and binding. If the Board of Directors confirms the award after a procedural review, the losing party then has 15 more days to file a lawsuit challenging it; without a suit filed in that window, the escrowed funds go to the winner.
If a member simply refuses to pay, NAR directs the recipient to seek judicial enforcement in state or federal court. The local board may support that action and may reimburse the winner’s legal costs if the court doesn’t order the losing side to pay them. Nonmember MLS participants who refuse to pay can face sanctions under MLS rules, including loss of MLS access.
How the 2024 Settlement Changed the Evidence
NAR has confirmed that procuring cause remains the standard for arbitration panels after the 2024 settlement, and compensation disputes between brokers can still be arbitrated under Article 17 and local MLS rules. What’s changed is where panels will look for proof.
MLSs can no longer include offers of compensation to buyer brokers in property listings, and brokerages cannot use MLS data to build outside platforms that facilitate those offers. Buyer-broker compensation now flows through written buyer agreements, off-MLS offers from sellers or listing brokers, or seller concessions in the purchase contract. Total compensation a buyer’s broker receives from all sources cannot exceed what the written buyer agreement specifies.
Written buyer agreements are now mandatory before an MLS participant can tour a home with a buyer, and the compensation figure in those agreements must be objectively clear rather than open-ended. That paperwork is likely to become the single most important exhibit in future procuring cause hearings. Draft it carefully, keep it current, and treat it as the backbone of any claim you may need to prove later.
Who Can Use the System
Arbitration isn’t limited to NAR members. Nonmember brokers who participate in a board’s MLS can invoke the board’s arbitration facilities for disputes with REALTORS at other firms or with other nonmember MLS participants, and they are subject to the same procedural obligations, including prompt payment or escrow of awards. Nonmember brokers who do not participate in the MLS have no way to force a REALTOR into association arbitration; a REALTOR can agree voluntarily, but there is no obligation.