Code of Ethics and
Standards of Practice
of the National Association
of REALTORS®
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
(return 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
(return 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 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®
(return to top)
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 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.