With the deadline for implementing practice changes behind us, forward-thinking brokers are now revisiting their compliance procedures.  If your brokerage is smaller than $2 billion in transaction volume, you're technically covered under the NAR settlement.  But your release is only presumed and doesn't exist unless you can demonstrate compliance.  And what's the point of adopting the practice changes if you can't demonstrate your compliance?  

Improving your compliance program doesn't have to mean adding layers of bureaucracy and paperwork. It's about making intelligent choices and leveraging the technology you already use to demonstrate compliance. This approach simplifies your processes and provides clear evidence of your commitment to following the practice changes.

This article will explore how you can create a light-touch, tech-enabled compliance program. We'll focus on using your existing tools more effectively, implementing simple yet powerful changes, and creating a culture of continuous improvement. Remember, the goal is iteration and improvement over time, incorporating feedback from your audit process to refine your approach continually.

Write Clear and Simple Policies to Address Key Compliance Concerns

Before diving into the technicalities, it's crucial to have clear, understandable policies in place. These form the foundation of your compliance program.

Things to do before drafting the policy:

• Identify key compliance areas based on the NAR settlement and industry regulations.
• Review your existing policies and procedures. What's working well? What needs improvement?
• Conduct a gap analysis. Are there any areas where current policies fall short?

Critical elements of a policy:

• Clear objectives and scope: What is the policy trying to achieve, and to whom does it apply?
• Specific, actionable guidelines: Provide step-by-step instructions where possible.
• Roles and responsibilities: Who is responsible for implementing and enforcing the policy?
• Consequences of non-compliance: Be clear about what happens if the policy isn't followed.
• References to relevant laws, regulations or contracts: This adds credibility and context to your policy.

Keeping a log of policy revisions:

Maintain a policy revision log to track changes over time.  It’s common to include the change log in the policy document itself.  Make sure to consider:

• Version control practices
• Reasons for changes
• Approval process for revisions

This log helps you keep track of changes and demonstrates your ongoing commitment to compliance if ever questioned.

Stakeholder Involvement:

Don't create policies in a vacuum. Involve key stakeholders such as leadership, legal counsel, agents, and staff. Their input can provide valuable insights and increase buy-in. When communicating policy changes, be clear about what's changing and why.

Implementing Simple Technology Changes to Make Compliance Easier

Now, let's examine how technology can streamline your compliance efforts. The goal is to make compliance a natural part of your existing workflows rather than an additional burden.

Technology can automate repetitive tasks, ensure consistency in processes, and make auditing and reporting much more manageable. By integrating compliance into the tools your team uses daily, you increase adoption and reduce the risk of oversight.  Here are some examples:

Track critical dates in your CRM

Set up custom fields to track important compliance-related dates in your CRM. For example, you could create fields for "Date of Buyer Agency Agreement," "Date of First Showing," etc. Configure your system to send automated reminders when these dates are approaching or have passed.

Integrate DocuSign Templates into your CRM and Transaction Management Software

Create templates in DocuSign for all your compliance-related documents. Integrate these with your CRM and transaction management software to easily access and send them from within these systems. This integration lets you track when documents are sent, viewed, and signed, providing a clear audit trail.

Use Email Templates in your CRM to demonstrate timely disclosure

Develop email templates for everyday compliance-related communications. For instance, you might have a template for disclosing your commission structure or explaining that commissions are negotiable. By sending these through your CRM, you record when and to whom these disclosures were made.

Integrate calendars into the CRM to track key appointments:

Use calendar integration to schedule and track compliance-related appointments. These could include client meetings where disclosures are made or internal compliance review sessions. Logging these appointments in your CRM provides another layer of documentation.

Implement disclosures into website sign-up

If clients can create accounts on your website, include disclosures in the sign-up process. Log when users accept these disclosures. This can serve as an early point of compliance in your client relationships.

Incorporate these Technology Changes into your Policy Documents

Once you've implemented these changes, update your process documents to reflect them. If necessary, create user guides to ensure your team understands how to use these new features effectively.

Conduct Training on both Policies and Procedures

With optimized policies and technology, it's time to ensure your team is well-trained.

Develop a comprehensive training program covering your policies and the procedures for using your tech tools for compliance. Consider using a mix of training methods:

• In-person sessions for complex topics or to address questions
• Online modules for self-paced learning
• Video tutorials demonstrating how to use new tech features

Create quizzes or assessments to ensure understanding, and implement a system for tracking who has completed training. Schedule regular refresher sessions to keep compliance top-of-mind and to introduce any updates or changes.

Create a Tracking and Audit Process

Regular audits are crucial for ensuring your compliance efforts are effective and identifying improvement areas.

Most CRMs and Transaction Management platforms have custom reporting capabilities. Leverage these to create compliance-focused reports. You might set up reports that show:

• Buyers that have a showing scheduled but are missing the buyer's agency agreement
• Percentage of transactions with all required documents signed
• The average time between the listing date and commission structure disclosure

Create a checklist for audits, defining the frequency (e.g., quarterly) and scope (e.g., 10% of transactions). Your checklist might include items like:

• Verify that the buyer agency agreement is signed and dated correctly
• Confirm that the commission structure was disclosed in writing
• Check that all required fields in the CRM are complete

Maintain a remediation log to track any issues found during audits. Document:

• The nature of the non-compliance
• Actions taken to correct it
• Timeline for resolution
• Any changes made to prevent similar issues in the future

Create a non-punitive reporting system to encourage self-reporting of policy violations. This could be as simple as a form on your intranet. By encouraging openness, you can address issues proactively and foster a culture of compliance.

Policy Reviews and Revisions (best practices)

Your compliance program should evolve as your business and the regulatory landscape change. Schedule regular policy review sessions, perhaps annually, to ensure your policies remain current and effective.

Use the feedback from your audits and self-reporting system to inform these reviews. Are there areas where non-compliance is common? This might indicate a need for more straightforward policies or additional training.

Stay informed about industry changes and regulatory updates. Consider joining industry associations or subscribing to relevant publications to stay ahead of the curve.

Involve legal counsel in significant policy revisions to ensure you're meeting all regulatory requirements. And remember, any time you update a policy, communicate the changes clearly to all stakeholders and update your training materials accordingly.

Key Takeaways:

Creating a robust, tech-enabled compliance program can be manageable. By leveraging the tools you already use and making incremental improvements, you can build a system that meets regulatory requirements and adds value to your business operations.

Remember, the key is continuous improvement. Regularly seek feedback from your team, stay open to new solutions, and foster a culture where compliance is integral to providing excellent service to your clients.

With this approach, you'll be well-positioned to navigate the evolving real estate landscape, demonstrate your commitment to ethical practices, and protect your business for years.