Code of Ethics and Standards of Practice
of the National Association of REALTORS®
Effective January 1, 2001
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.
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
Go to Top
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 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:
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, landlord’s 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 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. (Amended 1/94)
• 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 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 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 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
Go to Top
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
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)
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 client’s 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/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)
• 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 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 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, 2000 and 2001.
Explanatory
Notes
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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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