Code
of Ethics and Standards of Practice
of the National Association of REALTORS®
Effective
January 1, 2010
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:
-
clients consent after full disclosure; or
- REALTORS®
are required by court order; or
-
it is the intention of a client to commit a crime and the
information is necessary to prevent the crime; or
- 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, if asked, whether offers were obtained by the
listing licensee, another licensee in the listing firm, or by a
cooperating broker. (Adopted 1/03, Amended 1/09)
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
To be effective, any change in compensation offered for cooperative
services must be communicated to the other REALTOR® prior to
the time that REALTOR® submits an offer to purchase/lease the
property. (Amended 1/10)
- 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)
- Standard
of Practice 3-9
REALTORS®
shall not
provide access to listed property on terms other than those established
by the owner or the listing broker. (Adopted 1/10)
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)
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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, land 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 1/10)
- 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 unless
the party requesting the opinion requires a specific type of report
or different data set:
- 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 1/10)
- 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 honest and truthful in their real estate communications
and shall present a true picture in their advertising, marketing, and
other representations. REALTORS® shall ensure that their status as
real estate professionals is readily apparent in their advertising, marketing,
and other representations, and that the recipients of all real estate
communications are, or have been, notified that those communications are
from a real estate professional. (Amended 1/08)
- 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 real estate services or 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. (Amended 1/10)
- 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)
- Standard of Practice
12-12
REALTORS®
shall not:
- use URLs
or domain names that present less than a true picture, or
- register
URLs or domain names which, if used, would present less than a
true picture. (Adopted 1/08)
- Standard of Practice
12-13
The obligation
to present a true picture in advertising, marketing, and representations
allows REALTORS® to use and display only professional designations,
certifications, and other credentials to which they are legitimately
entitled. (Adopted 1/08)
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)
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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,
competitors’ businesses and competitors’ business practices
includes the duty to not knowingly or recklessly publish, 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 1/10)
- Standard of Practice
15-3
The obligation
to refrain from making false or misleading statements about competitors,
competitors' businesses and competitors' business practices includes
the duty to publish a clarification about or to remove statements
made by others on electronic media the REALTOR® controls once
the REALTOR® knows the statement is false or misleading. (Adopted
1/10)
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 their relationship with their current firm is
terminated, 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. (Amended 1/10)
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 seller
or landlord 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.
Back
to top.
Copyright 2007,
National Association of REALTORS®, All rights reserved. Form No. 166-288
(12/06) (rev 2/07)
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