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Code of Ethics and Standards of Practice of the National Associationof
REALTORS®
Effective
January 1, 2002
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.
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)
REALTORS®, when acting as principals in a real estate transaction,
remain obligated by the duties imposed by the Code of Ethics. (Amended
1/93)
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)
REALTORS®, in attempting to secure a listing, shall not deliberately
mislead the owner as to market value.
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)
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)
REALTORS® shall submit offers and counter-offers objectively
and as quickly as possible. (Adopted 1/93, Amended
1/95)
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)
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)
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:
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reveal confidential information of clients; or
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use confidential information of clients to the disadvantage
of clients; or
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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)
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)
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)
When entering into listing contracts, REALTORS® must advise
sellers/landlords of:
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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;
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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 1/99)
When entering into buyer/tenant agreements, REALTORS® must advise
potential clients of:
-
the REALTOR®'s general company policies regarding
cooperation and compensation; and
-
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)
Fees for preparing appraisals or other valuations shall not
be contingent upon the amount of the appraisal or valuation.
(Adopted 1/02)
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)
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)
(Renumbered as Standard of Practice
1-12 1/98)
(Renumbered as Standard of Practice
1-13 1/98)
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.
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)
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)
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)
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 3-2 does not preclude the listing broker
and cooperating broker from entering into an agreement to change cooperative
compensation. (Adopted 1/94)
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)
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)
REALTORS® shall disclose the existence of an accepted offer
to any broker seeking cooperation. (Adopted
5/86)
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)
REALTORS® shall not misrepresent the availability of access
to show or inspect a listed property. (Amended
11/87)
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)
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)
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.
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)
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)
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)
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.
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)
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)
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)
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)
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)
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)
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:
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identification of the subject property
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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
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if the opinion is not an appraisal, a statement to
that effect (Amended 1/01)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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.
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)
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)
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)
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)
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)
REALTORS® shall not knowingly or recklessly make false or misleading
statements about competitors, their businesses, or their business practices.
(Amended 1/92)
REALTORS® shall not knowingly or recklessly file false or unfounded
ethics complaints. (Adopted 1/00)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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.
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)
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)
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)
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)
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)
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)
The filing of litigation and refusal to withdraw from it by REALTORS®
in an arbitrable matter constitutes a refusal to arbitrate. (Adopted
2/86)
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)
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)
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. 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 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)
- 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)
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.
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. |
