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Code of Ethics
and Standards of Practice of the National Association of REALTORS®
Effective January 1, 2009
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
®,
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
®,
in attempting to secure a listing, shall not deliberately
mislead the owner as to market value.
Standard of Practice 1-4
®,
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
®
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
®
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
®
, 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
®
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
®
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
®,
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
®
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
®
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
®,
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
®
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
®,
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
®
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
®
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
®
shall not recommend or suggest to a client or a customer the use
of services of another organization or business entity in which
they have a direct interest without disclosing such interest at
the time of the recommendation or suggestion. (Amended 5/88)
Article 7
In a
transaction, REALTORS®
shall not accept compensation from more than one party, even if
permitted by law, without disclosure to all parties and the informed
consent of the REALTOR®’s
client or clients. (Amended 1/93)
Article 8
REALTORS®
shall keep in a special account in an appropriate financial
institution, separated from their own funds, monies coming into
their possession in trust for other persons, such as escrows, trust
funds, clients’ monies, and other like items.
Article 9
REALTORS®,
for the protection of all parties, shall assure whenever possible
that all agreements related to real estate transactions including,
but not limited to, listing and representation agreements, purchase
contracts, and leases are in writing in clear and understandable
language expressing the specific terms, conditions, obligations and
commitments of the parties. A copy of each agreement shall be
furnished to each party to such agreements upon their signing or
initialing. (Amended 1/04)
Standard of Practice 9-1
For the protection of all parties, REALTORS ®
shall use reasonable care to ensure that documents pertaining to
the purchase, sale, or lease of real estate are kept current
through the use of written extensions or amendments. (Amended
1/93)
Standard of Practice 9-2
When assisting or enabling a client or customer
in establishing a contractual relationship (e.g., listing and
representation agreements, purchase agreements, leases, etc.)
electronically, REALTORS ®
shall make reasonable efforts to explain the nature and disclose
the specific terms of the contractual relationship being
established prior to it being agreed to by a contracting party.
(Adopted 1/07)
Duties to the Public
Article 10
REALTORS®
shall not deny equal professional services to any person for reasons
of race, color, religion, sex, handicap, familial status, or
national origin. REALTORS®
shall not be parties to any plan or agreement to discriminate
against a person or persons on the basis of race, color, religion,
sex, handicap, familial status, or national origin. (Amended 1/90)
REALTORS®,
in their real estate employment practices, shall not discriminate
against any person or persons on the basis of race, color, religion,
sex, handicap, familial status, or national origin. (Amended 1/00)
Standard of Practice 10-1
When involved in the sale or lease of a
residence, REALTORS ®
shall not volunteer information regarding the racial, religious
or ethnic composition of any neighborhood nor shall they engage
in any activity which may result in panic selling, however,
REALTORS®
may provide other demographic information. (Adopted 1/94,
Amended 1/06)
Standard of Practice 10-2
When not involved in the sale or lease of a
residence, REALTORS ®
may provide demographic information related to a property,
transaction or professional assignment to a party if such
demographic information is (a) deemed by the REALTOR®
to be needed to assist with or complete, in a manner consistent
with Article 10, a real estate transaction or professional
assignment and (b) is obtained or derived from a recognized,
reliable, independent, and impartial source. The source of such
information and any additions, deletions, modifications,
interpretations, or other changes shall be disclosed in
reasonable detail. (Adopted 1/05, Renumbered 1/06)
Standard of Practice 10-3
®
shall not print, display or circulate any statement or
advertisement with respect to selling or renting of a property
that indicates any preference, limitations or discrimination
based on race, color, religion, sex, handicap, familial status,
or national origin. (Adopted 1/94, Renumbered 1/05 and 1/06)
Standard of Practice 10-4
As used in Article 10 “real estate employment
practices” relates to employees and independent contractors
providing real estate-related services and the administrative
and clerical staff directly supporting those individuals.
(Adopted 1/00, Renumbered 1/05)
Article 11
The
services which REALTORS®
provide to their clients and customers shall conform to the
standards of practice and competence which are reasonably expected
in the specific real estate disciplines in which they engage;
specifically, residential real estate brokerage, real property
management, commercial and industrial real estate brokerage, real
estate appraisal, real estate counseling, real estate syndication,
real estate auction, and international real estate.
REALTORS®
shall not undertake to provide specialized professional services
concerning a type of property or service that is outside their field
of competence unless they engage the assistance of one who is
competent on such types of property or service, or unless the facts
are fully disclosed to the client. Any persons engaged to provide
such assistance shall be so identified to the client and their
contribution to the assignment should be set forth. (Amended 1/95)
Standard of Practice 11-1
®
prepare opinions of real property value or price, other than in
pursuit of a listing or to assist a potential purchaser in
formulating a purchase offer, such opinions shall include the
following:
- identification of the subject
property
date prepared
defined value or price
limiting conditions, including statements
of purpose(s) and intended user(s)
any present or contemplated interest,
including the possibility of representing the
seller/landlord or buyers/tenants
basis for the opinion, including
applicable market data
if the opinion is not an appraisal, a
statement to that effect (Amended 1/01)
Standard of Practice 11-2
The obligations of the Code of Ethics in respect
of real estate disciplines other than appraisal shall be
interpreted and applied in accordance with the standards of
competence and practice which clients and the public reasonably
require to protect their rights and interests considering the
complexity of the transaction, the availability of expert
assistance, and, where the REALTOR ®
is an agent or subagent, the obligations of a fiduciary.
(Adopted 1/95)
Standard of Practice 11-3
®
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
®
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
®
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
®
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
®
shall not advertise nor permit any person employed by or
affiliated with them to advertise listed property in any medium
(e.g., electronically, print, radio, television, etc.) without
disclosing the name of that REALTOR®'s
firm in a reasonable and readily apparent manner. (Adopted
11/86, Amended 1/07)
Standard of Practice 12-6
®,
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
®
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
®
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
®’
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
®
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
®
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
®
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
®
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
®
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
®
shall not intentionally impede the Board’s investigative or
disciplinary proceedings by filing multiple ethics complaints
based on the same event or transaction. (Adopted 11/88)
Duties to REALTORS®
Article 15
REALTORS®
shall not knowingly or recklessly make false or misleading
statements about competitors, their businesses, or their business
practices. (Amended 1/92)
Standard of Practice 15-1
®
shall not knowingly or recklessly file false or unfounded ethics
complaints. (Adopted 1/00)
Standard of Practice 15-2
The obligation to refrain from making false or misleading
statements about competitors’ businesses and competitors’
business practices includes the duty to not knowingly or
recklessly repeat, retransmit, or republish false or misleading
statements made by others. This duty applies whether false or
misleading statements are repeated in person, in writing, by
technological means (e.g., the Internet), or by any other means.
(Adopted 1/07)
Article 16
REALTORS®
shall not engage in any practice or take any action inconsistent
with exclusive representation or exclusive brokerage relationship
agreements that other REALTORS®
have with clients. (Amended 1/04)
Standard of Practice 16-1
Article 16 is not intended to prohibit aggressive
or innovative business practices which are otherwise ethical and
does not prohibit disagreements with other REALTORS ®
involving commission, fees, compensation or other forms of
payment or expenses. (Adopted 1/93, Amended 1/95)
Standard of Practice 16-2
Article 16 does not preclude REALTORS ®
from making general announcements to prospects describing their
services and the terms of their availability even though some
recipients may have entered into agency agreements or other
exclusive relationships with another REALTOR®.
A general telephone canvass, general mailing or distribution
addressed to all prospects in a given geographical area or in a
given profession, business, club, or organization, or other
classification or group is deemed “general” for purposes of this
standard. (Amended 1/04)
Article 16 is intended to recognize as unethical two basic types
of solicitations:
First, telephone or personal solicitations of property owners
who have been identified by a real estate sign, multiple listing
compilation, or other information service as having exclusively
listed their property with another REALTOR®;
and
Second, mail or other forms of written solicitations of
prospects whose properties are exclusively listed with another
REALTOR®
when such solicitations are not part of a general mailing but
are directed specifically to property owners identified through
compilations of current listings, “for sale” or “for rent”
signs, or other sources of information required by Article 3 and
Multiple Listing Service rules to be made available to other
REALTORS®
under offers of subagency or cooperation. (Amended 1/04)
Standard of Practice 16-3
Article 16 does not preclude REALTORS ®
from contacting the client of another broker for the purpose of
offering to provide, or entering into a contract to provide, a
different type of real estate service unrelated to the type of
service currently being provided (e.g., property management as
opposed to brokerage) or from offering the same type of service
for property not subject to other brokers’ exclusive agreements.
However, information received through a Multiple Listing Service
or any other offer of cooperation may not be used to target
clients of other REALTORS®
to whom such offers to provide services may be made. (Amended
1/04)
Standard of Practice 16-4
®
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
®
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
®
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
®,
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
®
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
®,
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
®,
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, 2005, 2006,
and 2007.
Explanatory Notes
The
reader should be aware of the following policies which have been
approved by the Board of Directors of the National Association:
In
filing a charge of an alleged violation of the Code of Ethics by a
REALTOR®,
the charge must read as an alleged violation of one or more Articles
of the Code. Standards of Practice may be cited in support of the
charge.
The
Standards of Practice serve to clarify the ethical obligations
imposed by the various Articles and supplement, and do not
substitute for, the Case Interpretations in Interpretations of the
Code of Ethics.
Modifications to existing Standards of Practice and additional new
Standards of Practice are approved from time to time. Readers are
cautioned to ensure that the most recent publications are utilized.
Copyright 2009, National Association of REALTORS®, All rights
reserved. Form No. 166-288 (12/08)
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