
Effective
January 1, 2001
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)
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)
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)
Standard of Practice 1-3
REALTORS®, in attempting to secure a
listing, shall not deliberately mislead the owner as to market value.
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)
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)
Standard of Practice 1-6
REALTORS® shall submit offers and
counter-offers objectively and as quickly as possible. (Adopted 1/93, Amended 1/95)
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)
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)
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)
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)
Standard of Practice 1-11
REALTORS® who are employed to maintain or
manage a clients property shall exercise due diligence and make reasonable efforts
to protect it against reasonably foreseeable contingencies and losses. (Adopted 1/95)
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)
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, landlords agent, etc. (Adopted 1/93, Renumbered 1/98,
Amended 1/99)
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)
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)
Standard of Practice 2-2
(Renumbered as Standard of Practice 1-12
1/98)
Standard of Practice 2-3
(Renumbered as Standard of Practice 1-13
1/98)
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.
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 clients best interest. The obligation
to cooperate does not include the obligation to share commissions, fees, or to otherwise
compensate another broker. (Amended 1/95)
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)
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)
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)
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 brokers 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. (Amended 1/94)
Standard of Practice 3-5
It is the obligation of subagents to
promptly disclose all pertinent facts to the principals agent prior to as well as
after a purchase or lease agreement is executed. (Amended 1/93)
Standard of Practice 3-6
REALTORS® shall disclose the existence of
an accepted offer to any broker seeking cooperation. (Adopted 5/86)
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)
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
owners 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 purchasers representative. (Amended 1/00)
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
clients knowledge and consent.
When recommending real estate products or
services (e.g., homeowners 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)
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)
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)
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, 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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
Standard of Practice 14-3
REALTORS® shall not obstruct the
Boards 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)
Standard of Practice 14-4
REALTORS® shall not intentionally impede
the Boards 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 competitors, their businesses, or
their business practices. (Amended 1/92)
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)
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)
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)
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)
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)
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)
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)
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 clients
future business. (Amended 1/98)
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)
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)
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/landlords agent or broker at first contact and shall provide written
confirmation of that disclosure to the seller/landlords agent or broker not later
than execution of a purchase agreement or lease. (Amended 1/98)
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)
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)
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 clients agent or broker, and not with the client, except with
the consent of the clients 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 brokers offer of compensation to subagents or
buyers agents or brokers nor make the submission of an executed offer to
purchase/lease contingent on the listing brokers 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 brokers 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 by them from the listing broker, through offers to cooperate received through
Multiple Listing Services or other sources authorized by the listing broker, for the
purpose of creating a referral prospect to a third broker, or for creating a buyer/tenant
prospect unless such use is authorized by the listing broker. (Amended 1/93)
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
and 2000.
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 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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