Code
of Ethics and Standards of Practice
of the National Association of REALTORS®
Effective January 1, 2002
Preamble
Duties to Clients and Customers (Articles 1-9)
Duties to the Public (Articles 10-14)
Duties to REALTORS® (Article 15-17)
Explanatory Notes
Where the word REALTORS® is used in this Code and Preamble, it shall be deemed to include REALTOR-ASSOCIATE®s.
While the Code of Ethics establishes obligations that may 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 is the land. Upon its wise utilization and widely allocated
ownership depend the survival and growth of free institutions and of
our civilization. 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 a 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, 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 experience 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 harm, bring such matters to the attention of the appropriate Board or Association of REALTORS®. (Amended 1/00)
Realizing that cooperation with other real estate professionals promotes the best interests 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 centuries, embodied in the Golden Rule, "Whatsoever ye would that others 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 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 interests 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 non-agency capacity, REALTORS® remain obligated
to treat all parties honestly. (Amended 1/01)
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Standard of Practice 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)
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Standard of Practice 1-2
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 REALTOR® 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; "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 1/99)
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Standard of Practice 1-3
REALTORS®, in attempting to secure a listing, shall not deliberately
mislead the owner as to market value.
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Standard of Practice 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)
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Standard of Practice 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)
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Standard of Practice 1-6
REALTORS® shall submit offers and counter-offers objectively and
as quickly as possible. (Adopted 1/93, Amended 1/95)
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Standard of Practice 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 where
the acceptance is contingent on the termination of the pre-existing
purchase contract or lease. (Amended 1/93)
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Standard of Practice 1-8
REALTORS® acting as agents or brokers of buyers/tenants shall submit
to buyers/tenants all offers and counter-offers 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)
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Standard of Practice 1-9
The obligation of REALTORS® to preserve confidential information
(as defined by state law) provided by their clients in the course of
any agency relationship or non-agency relationship recognized by law
continues after termination of agency relationships or any non-agency
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 REALTOR®'s 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 the REALTOR®'s employees
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)
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Standard of Practice 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 the premises. (Adopted
1/95, Amended 1/00)
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Standard of Practice 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)
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Standard of Practice 1-12
When entering into listing contracts, REALTORS® must advise sellers/landlords
of:
1) the REALTOR®'s general company policies regarding cooperation
with and compensation 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 interests
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 1/99)
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Standard of Practice 1-13
When entering into buyer/tenant agreements, REALTORS® must advise
potential clients of:
1) the REALTOR®'s general company policies regarding cooperation
and compensation; and
2) any potential for the buyer/tenant representative to act as a disclosed
dual agent, e.g. listing broker, subagent, landlord's agent, etc.
(Adopted 1/93, Renumbered 1/98, Amended 1/99)
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Standard of Practice 1-14
Fees for preparing appraisals or other valuations shall not be contingent
upon the amount of the appraisal or valuation. (Adopted 1/02)
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 as defined by state law. (Amended 1/00)
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Standard of Practice 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)
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Standard of Practice 2-2
(Renumbered as Standard of Practice 1-12 1/98)
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Standard of Practice 2-3
(Renumbered as Standard of Practice 1-13 1/98)
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Standard of Practice 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 nominal consideration.
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Standard of Practice 2-5
Factors defined as "non-material" 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)
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Standard of Practice 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)
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Standard of Practice 3-2
REALTORS® shall, with respect to offers of compensation to another
REALTOR®, timely communicate any change of compensation for cooperative
services to the other REALTOR® prior to the time such REALTOR®
produces an offer to purchase/lease the property. (Amended 1/94)
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Standard of Practice 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)
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Standard of Practice 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 where one amount of commission is payable if the listing
broker's firm is the procuring cause of sale/lease and a different amount
of commission is payable if 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)
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Standard of Practice 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)
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Standard of Practice 3-6
REALTORS® shall disclose the existence of an accepted offer to any
broker seeking cooperation. (Adopted 5/86)
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Standard of Practice 3-7
When seeking information from another REALTOR® concerning 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 representational
status. (Amended 1/95)
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Standard of Practice 3-8
REALTORS® shall not misrepresent the availability of access to show
or inspect a listed property. (Amended 11/87)
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 or the owner's agent or broker. In selling property they
own, or in which they have any interest, REALTORS® shall reveal
their ownership or interest in writing to the purchaser or the purchaser's
representative. (Amended 1/00)
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Standard of Practice 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 or 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 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 recommendation. (Amended 1/99)
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Standard of Practice 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®'s 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 agreements shall be in writing, and shall be 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 upon their signing or initialing.
(Amended 1/95)
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Standard of Practice 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
or amendments. (Amended 1/93)
ARTICLE
10
REALTORS® shall not deny equal professional services to any person
for reasons of race, color, religion, sex, handicap, familial status,
or national origin. REALTORS® shall not be parties to any plan or
agreement to discriminate against a person or persons on the basis of
race, color, religion, sex, handicap, familial status, or national origin.
(Amended 1/90)
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, or national origin. (Amended 1/00)
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Standard of Practice 10-1
REALTORS® shall not volunteer information regarding the racial,
religious or ethnic composition of any neighborhood and shall not engage
in any activity which may result in panic selling. REALTORS® shall
not print, display or circulate any statement or advertisement with
respect to the selling or renting of a property that indicates any preference,
limitations or discrimination based on race, color, religion, sex, handicap,
familial status, or national origin. (Adopted 1/94)
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Standard of Practice 10-2
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)
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, 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 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. (Amended 1/95)
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Standard of Practice 11-1
When REALTORS® prepare opinions of real property value or price,
other than in pursuit of a listing or to assist a potential purchaser
in formulating a purchase offer, such opinions shall include the following:
1) identification of the subject property
2) date 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 buyers/tenants
6) basis for the opinion, including applicable market data
7) if the opinion is not an appraisal, a statement to that effect
(Amended 1/01)
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Standard of Practice 11-2
The obligations of the Code of Ethics in 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 expert assistance,
and, where the REALTOR® is an agent or subagent, the obligations
of a fiduciary. (Adopted 1/95)
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Standard of Practice 11-3
When REALTORS® provide consultive 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 consultive services, a separate
compensation may be paid with prior agreement between the client and
REALTOR®. (Adopted 1/96)
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Standard of Practice 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 careful at all times to present a true picture
in their advertising and representations to the public. REALTORS®
shall also ensure that their professional status (e.g., broker, appraiser,
property manager, etc.) or status as REALTORS® is clearly identifiable
in any such advertising. (Amended 1/93)
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Standard of Practice 12-1
REALTORS® may use the term "free" and similar terms in
their advertising and in other representations provided that all terms
governing availability of the offered product or service are clearly
disclosed at the same time. (Amended 1/97)
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Standard of Practice 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 1/97)
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Standard of Practice 12-3
The offering of premiums, prizes, merchandise discounts or other inducements
to list, sell, purchase, or lease is not, in itself, unethical even
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 REALTOR®'s offer will have clear,
thorough, 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 Standard of Practice. (Amended 1/95)
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Standard of Practice 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)
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Standard of Practice 12-5
REALTORS® shall not advertise nor permit any person employed by
or affiliated with them to advertise listed property without disclosing
the name of the firm.
(Adopted 11/86)
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Standard of Practice 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)
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Standard of Practice 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)
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 requires it.
ARTICLE
14
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)
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Standard of Practice 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)
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Standard of Practice 14-2
REALTORS® shall not make any unauthorized disclosure or dissemination
of the allegations, findings, or decision developed in connection with
an ethics hearing or appeal or in connection with an arbitration hearing
or procedural review. (Amended 1/92)
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Standard of Practice 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)
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Standard of Practice 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)
ARTICLE
15
REALTORS® shall not knowingly or recklessly make false or misleading
statements about competitors, their businesses, or their business practices.
(Amended 1/92)
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Standard of Practice 15-1
REALTORS® shall not knowingly or recklessly file false or unfounded
ethics complaints. (Adopted 1/00)
ARTICLE
16
REALTORS® shall not engage in any practice or take any action inconsistent
with the agency or other exclusive relationship recognized by law that
other REALTORS® have with clients. (Amended 1/98)
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Standard of Practice 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)
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Standard of Practice 16-2
Article 16 does not preclude REALTORS® from making general announcements
to prospective clients 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 canvass, general mailing or distribution addressed
to all prospective clients in a given geographical area or in a given
profession, business, club, or organization, or other classification
or group is deemed "general" for purposes of this standard.
(Amended 1/98)
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,
mail or other forms of written solicitations of prospective clients
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 Listing Service
rules to be made available to other REALTORS® under offers of subagency
or cooperation.
(Amended 1/93)
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Standard of Practice 16-3
Article 16 does not preclude REALTORS® from contacting 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). However, information received through
a Multiple Listing Service or any other offer of cooperation may not
be used to target clients of other REALTORS® to whom such offers
to provide services may be made. (Amended 1/93)
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Standard of Practice 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, an 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 to become effective upon expiration of any existing exclusive
listing. (Amended 1/94)
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Standard of Practice 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. (Adopted 1/94, Amended 1/98)
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Standard of Practice 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, and REALTORS® have not directly or indirectly initiated
such discussions, 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)
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Standard of Practice 16-7
The fact that a client has retained a REALTOR® as an agent or in
another exclusive relationship in one or more past transactions does
not preclude other REALTORS® from seeking such former client's future
business. (Amended 1/98)
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Standard of Practice 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)
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Standard of Practice 16-9
REALTORS®, prior to entering into an agency agreement or other exclusive
relationship, have an affirmative obligation to make reasonable efforts
to determine whether the client is subject to a current, valid exclusive
agreement to provide the same type of real estate service. (Amended
1/98)
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Standard of Practice 16-10
REALTORS®, acting as agents of, or in another relationship with,
buyers or tenants, shall disclose that relationship to the seller/landlord's
agent or broker at first contact and shall provide written confirmation
of that disclosure to the seller/landlord's agent or broker not later
than execution of a purchase agreement or lease. (Amended 1/98)
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Standard of Practice 16-11
On unlisted property, REALTORS® acting as buyer/tenant agents or
brokers shall disclose that relationship to the seller/landlord at first
contact for that client and shall provide written confirmation of such
disclosure to the seller/landlord not later than execution of any purchase
or lease agreement.
REALTORS® shall make any request for anticipated compensation from the seller/landlord at first contact. (Amended 1/98)
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Standard of Practice 16-12
REALTORS®, acting as agents 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 1/98)
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Standard of Practice 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 agent or broker, and not with the client, except with the consent
of the client's agent or broker or except where such dealings are initiated
by the client. (Adopted 1/93, Amended 1/98)
•
Standard of Practice 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)
•
Standard of Practice 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.
•
Standard of Practice 16-16
REALTORS®, acting as subagents or buyer/tenant agents 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's
agents 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 1/98)
•
Standard of Practice 16-17
REALTORS® acting as subagents or as buyer/tenant agents 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 1/98)
•
Standard of Practice 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)
•
Standard of Practice 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)
•
Standard of Practice 16-20
REALTORS®, prior to or after terminating their relationship with
their current firm, 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)
ARTICLE
17
In the event of contractual disputes or specific non-contractual disputes
as defined in Standard of Practice 17-4 between REALTORS® (principals)
Associated with different firms, arising out of their relationship as
REALTORS®, the REALTORS® shall submit the dispute to arbitration
in accordance with the regulations of their Board or Boards rather than
litigate the matter.
In the event clients of REALTORS® wish to arbitrate contractual disputes arising out of real estate transactions, REALTORS® shall arbitrate those disputes in accordance with the regulations of their Board, provided the clients agree to be bound by the decision.
The obligation to participate in arbitration contemplated by this Article includes the obligation of REALTORS® (principals) to cause their firms to arbitrate and be bound by any award. (Amended 1/01)
•
Standard of Practice 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)
•
Standard of Practice 17-2
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 1/93)
•
Standard of Practice 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)
•
Standard of Practice 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. 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)
2) 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, another cooperating broker claims to be the procuring cause of 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. 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)
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 such actions, another cooperating broker claims to be the procuring cause of 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. 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 requests 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)
The
Code of Ethics was adopted in 1913. Amended at the Annual Convention
in 1924, 1928, 1950, 1951, 1952, 1955, 1956, 1961, 1962, 1974, 1982,
1986, 1987, 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998,
1999, 2000
and 2001.
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 charge 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
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me at (561) 371-7577 or E-mail to jerry@geraldolsen.com
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Copyright
© 2002. Gerald Olsen. All rights reserved.
