Code of
Ethics and Standards of Practice
of the NATIONAL ASSOCIATION OF REALTORS ®
Effective January 1, 2007
Duties to Clients and Customers
Duties to the Public
Duties to REALTORS®
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 whether conducted
personally, through associates or others, or via technological means,
and to conduct their business in accordance with the tenets set forth
below. (Amended 1/07)
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 imposed by the Code of Ethics encompass all real estate-related
activities and transactions whether conducted in person, electronically,
or through any other means.
The duties the Code of Ethics imposes are applicable whether REALTORS®
are acting as agents or in legally recognized non-agency capacities
except that any duty imposed exclusively on agents by law or regulation
shall not be imposed by this Code of Ethics on REALTORS®
acting in non-agency capacities.
As used in this Code of Ethics, “client” means the person(s) or
entity(ies) with whom a 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;
“prospect” means a purchaser, seller, tenant, or landlord who is not
subject to a representation relationship with the REALTOR® or
REALTOR®’s firm; “agent” means a real estate licensee
(including brokers and sales associates) acting in an agency
relationship as defined by state law or regulation; and “broker” means a
real estate licensee (including brokers and sales associates) acting as
an agent or in a legally recognized non-agency capacity. (Adopted 1/95,
Amended 1/07)
· 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:
-
reveal
confidential information of clients; or
-
use
confidential information of clients to the disadvantage of
clients; or
-
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 client’s 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:
-
the REALTOR®’s
company policies regarding cooperation and the amount(s) of any
compensation that will be offered to subagents, buyer/tenant
agents, and/or brokers acting in legally recognized non-agency
capacities;
-
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
-
any potential
for listing brokers to act as disclosed dual agents, e.g.
buyer/tenant agents. (Adopted 1/93, Renumbered 1/98, Amended
1/03)
· Standard of Practice 1-13
When entering into buyer/tenant agreements,
REALTORS® must advise potential clients of:
-
the REALTOR®’s
company policies regarding cooperation;
-
the amount of
compensation to be paid by the client;
-
the potential
for additional or offsetting compensation from other brokers,
from the seller or landlord, or from other parties;
-
any potential
for the buyer/tenant representative to act as a disclosed dual
agent, e.g. listing broker, subagent, landlord’s agent, etc.,
and
-
the
possibility that sellers or sellers' representatives may not
treat the existence, terms, or conditions of offers as
confidential unless confidentiality is required by law,
regulation, or by any confidentiality agreement between the
parties. (Adopted 1/93, Renumbered 1/98, Amended 1/06)
· 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)
· Standard of Practice 1-15
REALTORS®,
in response to inquiries from buyers or cooperating brokers shall, with
the sellers’ approval, disclose the existence of offers on the property.
Where disclosure is authorized, REALTORS® shall also disclose whether
offers were obtained by the listing licensee, another licensee in the
listing firm, or by a cooperating broker. (Adopted 1/03, Amended 1/06))
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 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)
· 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
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)
· 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)
· Standard of Practice 3-6
REALTORS®
shall disclose the existence of accepted offers, including offers with
unresolved contingencies, to any broker seeking cooperation. (Adopted
5/86, Amended 1/04)
· 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 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)
· 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)
· 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 all agreements related to real estate
transactions including, but not limited to, listing and representation
agreements, purchase contracts, and leases are in writing in clear and
understandable language expressing the specific terms, conditions,
obligations and commitments of the parties. A copy of each agreement
shall be furnished to each party to such agreements upon their signing
or initialing. (Amended 1/04)
· 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)
· Standard of Practice 9-2
When
assisting or enabling a client or customer in establishing a contractual
relationship (e.g., listing and representation agreements, purchase
agreements, leases, etc.) electronically, REALTORS® shall
make reasonable efforts to explain the nature and disclose the specific
terms of the contractual relationship being established prior to it
being agreed to by a contracting party. (Adopted 1/07)
Duties to the Public
Article 10
REALTORS® shall not deny equal professional services to any
person for reasons of race, color, religion, sex, handicap, familial
status, 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
When
involved in the sale or lease of a residence, REALTORS® shall
not volunteer information regarding the racial, religious or ethnic
composition of any neighborhood nor shall they engage in any activity
which may result in panic selling, however, REALTORS® may
provide other demographic information. (Adopted 1/94, Amended 1/06)
· Standard of Practice 10-2
When not
involved in the sale or lease of a residence, REALTORS® may
provide demographic information related to a property, transaction or
professional assignment to a party if such demographic information is
(a) deemed by the REALTOR® to be needed to assist with or
complete, in a manner consistent with Article 10, a real estate
transaction or professional assignment and (b) is obtained or derived
from a recognized, reliable, independent, and impartial source. The
source of such information and any additions, deletions, modifications,
interpretations, or other changes shall be disclosed in reasonable
detail. (Adopted 1/05, Renumbered 1/06)
· Standard of Practice 10-3
REALTORS®
shall not print, display or circulate any statement or advertisement
with respect to selling or renting of a property that indicates any
preference, limitations or discrimination based on race, color,
religion, sex, handicap, familial status, or national origin. (Adopted
1/94, Renumbered 1/05 and 1/06)
· Standard of Practice 10-4
As used
in Article 10 “real estate employment practices” relates to employees
and independent contractors providing real estate-related services and
the administrative and clerical staff directly supporting those
individuals. (Adopted 1/00, Renumbered 1/05)
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:
-
identification of the subject property
-
date prepared
-
defined value
or price
-
limiting
conditions, including statements of purpose(s) and intended
user(s)
-
any present
or contemplated interest, including the possibility of
representing the seller/landlord or buyers/tenants
-
basis for the
opinion, including applicable market data
-
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)
· 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)
· 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 in any medium (e.g., electronically,
print, radio, television, etc.) without disclosing the name of that
REALTOR®'s firm in a reasonable and readily apparent manner.
(Adopted 11/86, Amended 1/07)
· 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)
· Standard of Practice 12-8
The
obligation to present a true picture in representations to the public
includes information presented, provided, or displayed on REALTORS®’
websites. REALTORS® shall use reasonable efforts to
ensure that information on their websites is current. When it becomes
apparent that information on a REALTOR®’s website is no
longer current or accurate, REALTORS® shall promptly take
corrective action. (Adopted 1/07)
· Standard of Practice 12-9
REALTOR®
firm websites shall disclose the firm’s name and state(s) of licensure
in a reasonable and readily apparent manner.
Websites of REALTORS® and non-member licensees affiliated
with a REALTOR® firm shall disclose the firm’s name and that
REALTOR®’s or non-member licensee’s state(s) of licensure in
a reasonable and readily apparent manner. (Adopted 1/07)
· Standard of Practice 12-10
REALTORS®’
obligation to present a true picture in their advertising and
representations to the public includes the URLs and domain names they
use, and prohibits REALTORS® from:
-
engaging in
deceptive or unauthorized framing of real estate brokerage
websites;
-
manipulating
(e.g., presenting content developed by others) listing content
in any way that produces a deceptive or misleading result; or
-
deceptively
using metatags, keywords or other devices/methods to direct,
drive, or divert Internet traffic, or to otherwise mislead
consumers. (Adopted 1/07)
· Standard of Practice 12-11
REALTORS®
intending to share or sell consumer information gathered via the
Internet shall disclose that possibility in a reasonable and readily
apparent manner. (Adopted 1/07)
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 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)
· 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)
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)
· Standard of Practice 15-2
The obligation to refrain from making false or
misleading statements about competitors’ businesses and competitors’
business practices includes the duty to not knowingly or recklessly
repeat, retransmit, or republish false or misleading statements made by
others. This duty applies whether false or misleading statements are
repeated in person, in writing, by technological means (e.g., the
Internet), or by any other means. (Adopted 1/07)
Article 16
REALTORS® shall not engage in any practice or take any action
inconsistent with exclusive representation or exclusive brokerage
relationship agreements that other REALTORS® have with
clients. (Amended 1/04)
· 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 prospects describing their services and the terms of
their availability even though some recipients may have entered into
agency agreements or other exclusive relationships with another REALTOR®.
A general telephone canvass, general mailing or distribution addressed
to all prospects 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 1/04)
Article 16 is intended to recognize as unethical two basic types of
solicitations:
First, telephone or personal solicitations of property owners who have
been identified by a real estate sign, multiple listing compilation, or
other information service as having exclusively listed their property
with another REALTOR®; and
Second, mail or other forms of written solicitations of prospects whose
properties are exclusively listed with another REALTOR® when
such solicitations are not part of a general mailing but are directed
specifically to property owners identified through compilations of
current listings, “for sale” or “for rent” signs, or other sources of
information required by Article 3 and Multiple Listing Service rules to
be made available to other REALTORS® under offers of
subagency or cooperation. (Amended 1/04)
· 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) or from offering the same type of
service for property not subject to other brokers’ exclusive agreements.
However, information received through a Multiple Listing Service or any
other offer of cooperation may not be used to target clients of other
REALTORS® to whom such offers to provide services may be
made. (Amended 1/04)
· 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 prospect has retained a REALTOR® as an exclusive representative
or exclusive broker in one or more past transactions does not preclude
other REALTORS® from seeking such prospect’s future business. (Amended
1/04)
· 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 a representation agreement, have an
affirmative obligation to make reasonable efforts to determine whether
the prospect is subject to a current, valid exclusive agreement to
provide the same type of real estate service. (Amended 1/04)
· Standard of Practice 16-10
REALTORS®, acting as buyer or tenant representatives or brokers, shall
disclose that relationship to the seller/landlord’s representative or
broker at first contact and shall provide written confirmation of that
disclosure to the seller/landlord’s representative or broker not later
than execution of a purchase agreement or lease. (Amended 1/04)
· Standard of Practice 16-11
On
unlisted property, REALTORS® acting as buyer/tenant representatives or
brokers shall disclose that relationship to the seller/landlord at first
contact for that buyer/tenant and shall provide written confirmation of
such disclosure to the seller/landlord not later than execution of any
purchase or lease agreement. (Amended 1/04)
REALTORS® shall make any request for anticipated compensation from the
seller/ landlord at first contact. (Amended 1/98)
· Standard of Practice 16-12
REALTORS®, acting as representatives or brokers of sellers/landlords or
as subagents of listing brokers, shall disclose that relationship to
buyers/tenants as soon as practicable and shall provide written
confirmation of such disclosure to buyers/tenants not later than
execution of any purchase or lease agreement. (Amended 1/04)
· 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 representative or broker, and not with the client, except with
the consent of the client’s representative or broker or except where
such dealings are initiated by the client.
Before providing substantive services (such as writing a purchase offer
or presenting a CMA) to prospects, REALTORS® shall ask prospects whether
they are a party to any exclusive representation agreement. REALTORS®
shall not knowingly provide substantive services concerning a
prospective transaction to prospects who are parties to exclusive
representation agreements, except with the consent of the prospects’
exclusive representatives or at the direction of prospects. (Adopted
1/93, Amended 1/04)
· 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 representatives or
brokers, shall not use the terms of an offer to purchase/lease to
attempt to modify the listing broker’s offer of compensation to
subagents or buyer/tenant representatives or brokers nor make the
submission of an executed offer to purchase/lease contingent on the
listing broker’s agreement to modify the offer of compensation. (Amended
1/04)
· Standard of Practice 16-17
REALTORS®,
acting as subagents or as buyer/tenant representatives or brokers, shall
not attempt to extend a listing broker’s offer of cooperation and/or
compensation to other brokers without the consent of the listing broker.
(Amended 1/04)
· 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:
-
Where a
listing broker has compensated a cooperating broker and another
cooperating broker subsequently claims to be the procuring cause
of the sale or lease. In such cases the complainant may name the
first cooperating broker as respondent and arbitration may
proceed without the listing broker being named as a respondent.
When arbitration occurs between two (or more) cooperating
brokers and where the listing broker is not a party, the amount
in dispute and the amount of any potential resulting award is
limited to the amount paid to the respondent by the listing
broker and any amount credited or paid to a party to the
transaction at the direction of the respondent. Alternatively,
if the complaint is brought against the listing broker, the
listing broker may name the first cooperating broker as a
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, Amended 1/07)
-
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. When arbitration occurs
between two (or more) cooperating brokers and where the listing
broker is not a party, the amount in dispute and the amount of
any potential resulting award is limited to the amount paid to
the respondent by the listing broker and any amount credited or
paid to a party to the transaction at the direction of the
respondent. Alternatively, if the complaint is brought against
the listing broker, the listing broker may name the first
cooperating broker as a 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, Amended 1/07)
-
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)
-
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)
-
Where a buyer
or tenant representative is compensated by the seller or
landlord, and not by the listing broker, and the listing broker,
as a result, reduces the commission owed by the seller or
landlord and, subsequent to such actions, claims to be the
procuring cause of sale or lease. In such cases arbitration
shall be between the listing broker and the buyer or tenant
representative and the amount in dispute is limited to the
amount of the reduction of commission to which the listing
broker agreed. (Adopted 1/05)
· Standard of Practice 17-5
The
obligation to arbitrate established in Article 17 includes disputes
between REALTORS® (principals) in different states in
instances where, absent an established inter–association arbitration
agreement, the REALTOR® (principal) requesting arbitration
agrees to submit to the jurisdiction of, travel to, participate in, and
be bound by any resulting award rendered in arbitration conducted by the
respondent(s) REALTOR®’s association, in instances where the
respondent(s) REALTOR®’s association determines that an
arbitrable issue exists. (Adopted 1/07)
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, 2001, 2002, 2003, 2004, and 2005.
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.
Copyright 2007, National Association of REALTORS®, All rights reserved.
Form No. 166-288 (12/06)
