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CODE OF ETHICS
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Code of Ethics and Standards of Practice
of the National Association of REALTORS®
Effective January 1, 2008
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 whether offers were obtained by the listing licensee,
another licensee in the listing firm, or by a cooperating broker.
(Adopted 1/03, Amended 1/06))
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 2008, National Association of REALTORS®, All
rights reserved. Form No. 166-288 (12/07)
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