Code of Ethics and Standards of Practice
Code of Ethics and Standards of
Practice of the
National Assocation of REALTORS®
Effective January 1, 2002
Where the word REALTORS® is used in this Code
and Preamble, it shall be deemed to include REALTOR-ASSOCIATE®s .
While the Code of Ethics establishes obligations that may be
higher than those mandated by law, in any instance where the Code of Ethics and the law
conflict, the obligations of the law must take precedence.
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 insubstantial economic harm, bring such matters to the attention of the appropriate Board or Association of REALTORS. (Amended 1/00)
Realizing that cooperation with other real estate
professionals promotes the best interests of those who utilize their services, REALTORS®
urge exclusive representation of clients; do not attempt to gain any unfair advantage over
their competitors; and they refrain from making unsolicited comments about other
practitioners. In instances where their opinion is sought, or where REALTORS® believe
that comment is necessary, their opinion is offered in an objective, professional manner,
uninfluenced by any personal motivation or potential advantage or gain.
The term REALTOR® has come to connote competency, fairness,
and high integrity resulting from adherence to a lofty ideal of moral conduct in business
relations. No inducement of profit and no instruction from clients ever can justify
departure from this ideal.
In the interpretation of this obligation, REALTORS® can take
no safer guide than that which has been handed down through the centuries, embodied in the
Golden Rule, "Whatsoever ye would that others should do to you, do ye even so to
them."
Accepting this standard as their own, REALTORS® pledge to
observe its spirit in all of their activities and to conduct their business in accordance
with the tenets set forth below.
Duties to Clients and Customers
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 of absolute fidelity to the client's interests is primary,
but it does not relieve REALTORS® of their obligation to treat all parties honestly. When
serving a buyer, seller, landlord, tenant or other party in a non-agency capacity,
REALTORS® remain obligated to treat all parties honestly. (Amended 1/01)
REALTORS®, when acting as principals in a real estate
transaction, remain obligated by the duties imposed by the Code of Ethics. (Amended 1/93)
The duties the Code of Ethics imposes are applicable whether
REALTORS® are acting as agents or in legally recognized non-agency capacities except that
any duty imposed exclusively on agents by law or regulation shall not be imposed by this
Code of Ethics on REALTORS® acting in non-agency capacities.
As used in this Code of Ethics, "client" means the
person(s) or entity(ies) with whom a REALTOR® or a REALTOR®'s firm has an agency or
legally recognized non-agency relationship; "customer" means a party to a real
estate transaction who receives information, services, or benefits but has no contractual
relationship with the REALTOR® or the REALTOR®'s firm; "agent" means a real
estate licensee (including brokers and sales associates) acting in an agency relationship
as as defined by state law or regulation; and "broker" means a real estate
licensee (including brokers and sales associates) acting as an agent or in a legally
recognized non-agency capacity.(Adopted 1/95, Amended 1/99)
REALTORS®, in attempting to secure a listing, shall not
deliberately mislead the owner as to market value.
REALTORS®, when seeking to become a buyer/tenant
representative, shall not mislead buyers or tenants as to savings or other benefits that
might be realized through use of the REALTOR®'s services. (Amended 1/93)
REALTORS® may represent the seller/landlord and buyer/tenant
in the same transaction only after full disclosure to and with informed consent of both
parties. (Adopted 1/93)
REALTORS® shall submit offers and counter-offers objectively
and as quickly as possible. (Adopted 1/93, Amended 1/95)
When acting as listing brokers, REALTORS® shall continue to
submit to the seller/landlord all offers and counter-offers until closing or execution of
a lease unless the seller/landlord has waived this obligation in writing. REALTORS® shall
not be obligated to continue to market the property after an offer has been accepted by
the seller/landlord. REALTORS® shall recommend that sellers/landlords obtain the advice
of legal counsel prior to acceptance of a subsequent offer except where the acceptance is
contingent on the termination of the pre-existing purchase contract or lease. (Amended
1/93)
REALTORS® acting as agents or brokers of buyers/tenants
shall submit to buyers/tenants all offers and counter-offers until acceptance but have no
obligation to continue to show properties to their clients after an offer has been
accepted unless otherwise agreed in writing. REALTORS® acting as agents or brokers of
buyers/tenants shall recommend that buyers/tenants obtain the advice of legal counsel if
there is a question as to whether a pre-existing contract has been terminated. (Adopted
1/93, Amended 1/99)
The obligation of REALTORS® to preserve confidential
information (as defined by state law) provided by their clients in the course of any
agency relationship or non-agency relationship recognized by law continues after
termination of agency relationships or any non-agency relationships recognized by law.
REALTORS® shall not knowingly, during or following the termination of a professional
relationship with their client:
1) reveal confidential information of clients; or
2) use confidential information of clients to the
disadvantage of clients; or
3) use confidential information of clients for the
REALTOR®'s advantage or the advantage of a third parties unless:
a) clients consent after full disclosure; or
b) REALTORS® are required by court order; or
c) it is the intention of a client to commit a crime and the
information is necessary to prevent the crime; or
d) it is necessary to defend the REALTOR® or the REALTOR®'s
employees or associates against an accusation of wrongful conduct.
Information concerning latent material defects is not considered confidential information under this Code of Ethics. (Adopted 1/93, Amended
1/01)
- Standard of Practice 1-10
REALTORS® shall, consistent with the terms and conditions of
their property management agreement, competently manage the property of clients with due
regard for the rights, safety and health of tenants and others
lawfully on the premises. (Adopted 1/95, Amended 1/00)
- Standard of Practice 1-11
REALTORS® who are employed to maintain or manage a client's
property shall exercise due diligence and make reasonable efforts to protect it against
reasonably foreseeable contingencies and losses. (Adopted 1/95)
- Standard of Practice 1-12
When entering into listing contracts, REALTORS® must advise
sellers/landlords of:
1) the REALTOR®'s general company policies regarding
cooperation with and compensation to subagents, buyer/tenant agents and/or brokers acting
in legally recognized non agency capacities;
2) the fact that buyer/tenant agents or brokers, even if
compensated by listing brokers, or by sellers/landlords may represent the interests of
buyers/tenants; and
3) any potential for listing brokers to act as disclosed dual
agents, e.g. buyer/tenant agents. (Adopted 1/93, Renumbered 1/98, Amended 1/99)
- Standard of Practice 1-13
When entering into buyer/tenant agreements, REALTORS® must
advise potential clients of:
1) the REALTOR®'s general company policies regarding
cooperation and compensation; and
2) any potential for the buyer/tenant representative to act
as a disclosed dual agent, e.g. listing broker, subagent, landlord's agent, etc. (Adopted
1/93, Renumbered 1/98, Amended 1/99)
- Standard of Practice 1-14
Fees for preparting appraisals or other valuations shall not be contingent upon the amount of the appraisal or valuation. (Adopted 1/02)
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)
REALTORS® shall only be obligated to discover and disclose
adverse factors reasonably apparent to someone with expertise in those areas required by
their real estate licensing authority. Article 2 does not impose upon the REALTOR® the
obligation of expertise in other professional or technical disciplines. (Amended 1/96)
(Renumbered as Standard of Practice 1-12 1/98)
(Renumbered as Standard of Practice 1-13 1/98)
REALTORS® shall not be parties to the naming of a false
consideration in any document, unless it be the naming of an obviously nominal
consideration.
Factors defined as "non-material" by law or
regulation or which are expressly referenced in law or regulation as not being subject to
disclosure are considered not "pertinent" for purposes of Article 2. (Adopted
1/93)
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)
REALTORS®, acting as exclusive agents or brokers of
sellers/landlords, establish the terms and conditions of offers to cooperate. Unless
expressly indicated in offers to cooperate, cooperating brokers may not assume that the
offer of cooperation includes an offer of compensation. Terms of compensation, if any,
shall be ascertained by cooperating brokers before beginning efforts to accept the offer
of cooperation. (Amended 1/99)
REALTORS® shall, with respect to offers of compensation to
another REALTOR® , timely communicate any change of compensation for cooperative services
to the other REALTOR® prior to the time such REALTOR® produces an offer to
purchase/lease the property. (Amended 1/94)
Standard of Practice 3-2 does not preclude the listing broker
and cooperating broker from entering into an agreement to change cooperative compensation.
(Adopted 1/94)
REALTORS®, acting as listing brokers, have an affirmative
obligation to disclose the existence of dual or variable rate commission arrangements
(i.e., listings where one amount of commission is payable if the listing broker's firm is
the procuring cause of sale/lease and a different amount of commission is payable if the
sale/lease results through the efforts of the seller/landlord or a cooperating broker).
The listing broker shall, as soon as practical, disclose the existence of such
arrangements to potential cooperating brokers and shall, in response to inquiries from
cooperating brokers, disclose the differential that would result in a cooperative
transaction or in a sale/lease that results through the efforts of the seller/landlord. If
the cooperating broker is a buyer/tenant representative, the buyer/tenant representative
must disclose such information to their client before the client makes an offer to purchase or lease. (Amended 1/02)
It is the obligation of subagents to promptly disclose all
pertinent facts to the principal's agent prior to as well as after a purchase or lease
agreement is executed. (Amended 1/93)
REALTORS® shall disclose the existence of an accepted offer
to any broker seeking cooperation. (Adopted 5/86)
When seeking information from another REALTOR® concerning
property under a management or listing agreement, REALTORS® shall disclose their
REALTOR® status and whether their interest is personal or on behalf of a client and, if
on behalf of a client, their representational status. (Amended 1/95)
REALTORS® shall not misrepresent the availability of access
to show or inspect a listed property. (Amended 11/87)
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)
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)
REALTORS® shall not recommend or suggest to a client or a
customer the use of services of another organization or business entity in which they have
a direct interest without disclosing such interest at the time of the recommendation or
suggestion. (Amended 5/88)
Article 7
In a transaction, REALTORS® shall not accept compensation
from more than one party, even if permitted by law, without disclosure to all parties and
the informed consent of the REALTOR®'s client or clients. (Amended 1/93)
Article 8
REALTORS® shall keep in a special account in an appropriate
financial institution, separated from their own funds, monies coming into their possession
in trust for other persons, such as escrows, trust funds, clients' monies, and other like
items.
Article 9
REALTORS®, for the protection of all parties, shall assure
whenever possible that agreements shall be in writing, and shall be in clear and
understandable language expressing the specific terms, conditions, obligations and
commitments of the parties. A copy of each agreement shall be furnished to each party upon
their signing or initialing. (Amended 1/95)
For the protection of all parties, REALTORS® shall use
reasonable care to ensure that documents pertaining to the purchase, sale, or lease of
real estate are kept current through the use of written extensions or amendments. (Amended
1/93)
Duties to the Public
Article 10
REALTORS® shall not deny equal professional services to any
person for reasons of race, color, religion, sex, handicap, familial status, or national
origin. REALTORS® shall not be parties to any plan or agreement to discriminate against a
person or persons on the basis of race, color, religion, sex, handicap, familial status,
or national origin. (Amended 1/90)
REALTORS® in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin. (Amended 1/00)
- Standard of Practice 10-1
REALTORS® shall not volunteer information regarding the
racial, religious or ethnic composition of any neighborhood and shall not engage in any
activity which may result in panic selling. REALTORS® shall not print, display or
circulate any statement or advertisement with respect to the selling or renting of a
property that indicates any preference, limitations or discrimination based on race,
color, religion, sex, handicap, familial status or national origin. (Adopted 1/94)
- Standard of Practice 10-2
As used in Article 10 "real estate employment practices" relates to employees and independent contractors providing real-estate related services and the administrative and clerical staff directly supporting those individuals. (Adopted 1/00)
Article 11
The services which REALTORS® provide to their clients and
customers shall conform to the standards of practice and competence which are reasonably
expected in the specific real estate disciplines in which they engage; specifically,
residential real estate brokerage, real property management, commercial and industrial
real estate brokerage, real estate appraisal, real estate counseling, real estate
syndication, real estate auction, and international real estate.
REALTORS® shall not undertake to provide specialized
professional services concerning a type of property or service that is outside their field
of competence unless they engage the assistance of one who is competent on such types of
property or service, or unless the facts are fully disclosed to the client. Any persons
engaged to provide such assistance shall be so identified to the client and their
contribution to the assignment should be set forth. (Amended 1/95)
- Standard of Practice 11-1
When REALTORS prepare opinions of real property value or price, other than in pursuite of a listing or to assist a potential purchaser in formulating a purchase offer, such opinions shll include the following:
1. identification of the subject property
2. date prepared
3. defined value or price
4. limiting conditions, including statements of purpose(s) and intended user(s)
5. any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants
6. basis for the opinion, including applicable market data
7. if the opinion is not an appraisal, a statement to that effect (Amended 1/01)
- Standard of Practice 11-2
The obligations of the Code of Ethics in respect of real
estate disciplines other than appraisal shall be interpreted and applied in accordance
with the standards of competence and practice which clients and the public reasonably
require to protect their rights and interests considering the complexity of the
transaction, the availability of expert assistance, and, where the REALTOR® is an agent
or subagent, the obligations of a fiduciary. (Adopted 1/95)
- Standard of Practice 11-3
When REALTORS® provide consultive services to clients which
involve advice or counsel for a fee (not a commission), such advice shall be rendered in
an objective manner and the fee shall not be contingent on the substance of the advice or
counsel given. If brokerage or transaction services are to be provided in addition to
consultive services, a separate compensation may be paid with prior agreement between the
client and REALTOR®. (Adopted 1/96)
- 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 careful at all times to present a true
picture in their advertising and representations to the public. REALTORS® shall also
ensure that their professional status (e.g., broker, appraiser, property manager, etc.) or
status as REALTORS® is clearly identifiable in any such advertising. (Amended 1/93)
- Standard of Practice 12-1
REALTORS® may use the term "free" and similar
terms in their advertising and in other representations provided that all terms governing
availability of the offered product or service are clearly disclosed at the same time.
(Amended 1/97)
- Standard of Practice 12-2
REALTORS® may represent their services as "free"
or without cost even if they expect to receive compensation from a source other than their
client provided that the potential for the REALTOR® to obtain a benefit from a third
party is clearly disclosed at the same time. (Amended 1/97)
- Standard of Practice 12-3
The offering of premiums, prizes, merchandise discounts or
other inducements to list, sell, purchase, or lease is not, in itself, unethical even if
receipt of the benefit is contingent on listing, selling, purchasing, or leasing through
the REALTOR® making the offer. However, REALTORS® must exercise care and candor in any
such advertising or other public or private representations so that any party interested
in receiving or otherwise benefiting from the REALTOR®'s offer will have clear, thorough,
advance understanding of all the terms and conditions of the offer. The offering of any
inducements to do business is subject to the limitations and restrictions of state law and
the ethical obligations established by any applicable Standard of Practice. (Amended 1/95)
- Standard of Practice 12-4
REALTORS® shall not offer for sale/lease or advertise
property without authority. When acting as listing brokers or as subagents, REALTORS®
shall not quote a price different from that agreed upon with the seller/landlord. (Amended
1/93)
- Standard of Practice 12-5
REALTORS® shall not advertise nor permit any person employed
by or affiliated with them to advertise listed property without disclosing the name of the
firm. (Adopted 11/86)
- Standard of Practice 12-6
REALTORS®, when advertising unlisted real property for
sale/lease in which they have an ownership interest, shall disclose their status as both
owners/landlords and as REALTORS® or real estate licensees. (Amended 1/93)
- Standard of Practice 12-7
Only REALTORS® who participated in the transaction as the
listing broker or cooperating broker (selling broker) may claim to have "sold"
the property. Prior to closing, a cooperating broker may post a "sold" sign only
with the consent of the listing broker. (Amended 1/96)
Article 13
REALTORS® shall not engage in activities that constitute the
unauthorized practice of law and shall recommend that legal counsel be obtained when the
interest of any party to the transaction requires it.
Article 14
If charged with unethical practice or asked to present
evidence or to cooperate in any other way, in any professional standards proceeding or
investigation, REALTORS® shall place all pertinent facts before the proper tribunals of
the Member Board or affiliated institute, society, or council in which membership is held
and shall take no action to disrupt or obstruct such processes. (Amended 1/99)
- Standard of Practice 14-1
REALTORS® shall not be subject to disciplinary proceedings
in more than one Board of REALTORS® or affiliated institute, society or council in which
they hold membership with respect to alleged violations of the Code of Ethics relating to
the same transaction or event. (Amended 1/95)
- Standard of Practice 14-2
REALTORS® shall not make any unauthorized disclosure or
dissemination of the allegations, findings, or decision developed in connection with an
ethics hearing or appeal or in connection with an arbitration hearing or procedural
review. (Amended 1/92)
- Standard of Practice 14-3
REALTORS® shall not obstruct the Board's investigative or
professional standards proceedings by instituting or threatening to institute actions for
libel, slander or defamation against any party to a professional standards proceeding or
their witnesses based on the filing of an arbitration request, an ethics complaint, or
testimony given before any tribunal. (Adopted 11/87, Amended 1/99)
- Standard of Practice 14-4
REALTORS® shall not intentionally impede the Board's
investigative or disciplinary proceedings by filing multiple ethics complaints based on
the same event or transaction. (Adopted 11/88)
Duties to REALTORS®
Article 15
REALTORS® shall not knowingly or recklessly make false or
misleading statements about competitors, their businesses, or their business practices.
(Amended 1/92)
- Standard of Practice 15-1
REALTORS® shall not knowingly or recklessly file false or unfounded ethics complaints. (Adopted 1/00)
Article 16
REALTORS® shall not engage in any practice or take any
action inconsistent with the agency or other exclusive relationship recognized by law that
other REALTORS® have with clients. (Amended 1/98)
- Standard of Practice 16-1
Article 16 is not intended to prohibit aggressive or
innovative business practices which are otherwise ethical and does not prohibit
disagreements with other REALTORS® involving commission, fees, compensation or other
forms of payment or expenses. (Adopted 1/93, Amended 1/95)
- Standard of Practice 16-2
Article 16 does not preclude REALTORS® from making general
announcements to prospective clients describing their services and the terms of their
availability even though some recipients may have entered into agency agreements or other
exclusive relationships with another REALTOR® . A general telephone canvass, general
mailing or distribution addressed to all prospective clients in a given geographical area
or in a given profession, business, club, or organization, or other classification or
group is deemed "general" for purposes of this standard. (Amended 1/98)
Article 16 is intended to recognize as unethical two basic
types of solicitations:
First, telephone or personal solicitations of property owners
who have been identified by a real estate sign, multiple listing compilation, or other
information service as having exclusively listed their property with another REALTOR® ;
and
Second, mail or other forms of written solicitations of
prospective clients whose properties are exclusively listed with another REALTOR® when
such solicitations are not part of a general mailing but are directed specifically to
property owners identified through compilations of current listings, "for sale"
or "for rent" signs, or other sources of information required by Article 3 and
Multiple Listing Service rules to be made available to other REALTORS® under offers of
subagency or cooperation. (Amended 1/93)
- Standard of Practice 16-3
Article 16 does not preclude REALTORS® from contacting the
client of another broker for the purpose of offering to provide, or entering into a
contract to provide, a different type of real estate service unrelated to the type of
service currently being provided (e.g., property management as opposed to brokerage).
However, information received through a Multiple Listing Service or any other offer of
cooperation may not be used to target clients of other REALTORS® to whom such offers to
provide services may be made. (Amended 1/93)
- Standard of Practice 16-4
REALTORS® shall not solicit a listing which is currently
listed exclusively with another broker. However, if the listing broker, when asked by the
REALTOR®, refuses to disclose the expiration date and nature of such listing; i.e., an
exclusive right to sell, an exclusive agency, open listing, or other form of contractual
agreement between the listing broker and the client, the REALTOR® may contact the owner
to secure such information and may discuss the terms upon which the REALTOR® might take a
future listing or, alternatively, may take a listing to become effective upon expiration
of any existing exclusive listing. (Amended 1/94)
- Standard of Practice 16-5
REALTORS® shall not solicit buyer/tenant agreements from
buyers/tenants who are subject to exclusive buyer/tenant agreements. However, if asked by
a REALTOR®, the broker refuses to disclose the expiration date of the exclusive
buyer/tenant agreement, the REALTOR® may contact the buyer/tenant to secure such
information and may discuss the terms upon which the REALTOR® might enter into a future
buyer/tenant agreement or, alternatively, may enter into a buyer/tenant agreement to
become effective upon the expiration of any existing exclusive buyer/tenant agreement.
(Adopted 1/94, Amended 1/98)
- Standard of Practice 16-6
When REALTORS® are contacted by the client of another
REALTOR® regarding the creation of an exclusive relationship to provide the same type of
service, and REALTORS® have not directly or indirectly initiated such discussions, they
may discuss the terms upon which they might enter into a future agreement or,
alternatively, may enter into an agreement which becomes effective upon expiration of any
existing exclusive agreement. (Amended 1/98)
- Standard of Practice 16-7
The fact that a client has retained a REALTOR® as an agent
or in another exclusive relationship in one or more past transactions does not preclude
other REALTORS® from seeking such former client's future business. (Amended 1/98)
- Standard of Practice 16-8
The fact that an exclusive agreement has been entered into
with a REALTOR® shall not preclude or inhibit any other REALTOR® from entering into a
similar agreement after the expiration of the prior agreement. (Amended 1/98)
- Standard of Practice 16-9
REALTORS®, prior to entering into an agency agreement or
other exclusive relationship, have an affirmative obligation to make reasonable efforts to
determine whether the client is subject to a current, valid exclusive agreement to provide
the same type of real estate service. (Amended 1/98)
- Standard of Practice 16-10
REALTORS®, acting as agents of, or in another relationship
with, buyers or tenants, shall disclose that relationship to the seller/landlord's agent
or broker at first contact and shall provide written confirmation of that disclosure to
the seller/landlord's agent or broker not later than execution of a purchase agreement or
lease. (Amended 1/98)
- Standard of Practice 16-11
On unlisted property, REALTORS® acting as buyer/tenant
agents or brokers shall disclose that relationship to the seller/landlord at first contact
for that client and shall provide written confirmation of such disclosure to the
seller/landlord not later than execution of any purchase or lease agreement. REALTORS®
shall make any request for anticipated compensation from the seller/landlord at first
contact. (Amended 1/98)
- Standard of Practice 16-12
REALTORS®, acting as agents or brokers of sellers/landlords
or as subagents of listing brokers, shall disclose that relationship to buyers/tenants as
soon as practicable and shall provide written confirmation of such disclosure to
buyers/tenants not later than execution of any purchase or lease agreement. (Amended 1/98)
- Standard of Practice 16-13
All dealings concerning property exclusively listed, or with
buyer/tenants who are subject to an exclusive agreement shall be carried on with the
client's agent or broker, and not with the client, except with the consent of the client's
agent or broker or except where such dealings are initiated by the client. (Adopted 1/93,
Amended 1/98)
- Standard of Practice 16-14
REALTORS® are free to enter into contractual relationships
or to negotiate with sellers/landlords, buyers/tenants or others who are not subject to an
exclusive agreement but shall not knowingly obligate them to pay more than one commission
except with their informed consent. (Amended 1/98)
- Standard of Practice 16-15
In cooperative transactions REALTORS® shall compensate
cooperating REALTORS® (principal brokers) and shall not compensate nor offer to
compensate, directly or indirectly, any of the sales licensees employed by or affiliated
with other REALTORS® without the prior express knowledge and consent of the cooperating
broker.
- Standard of Practice 16-16
REALTORS®, acting as subagents or buyer/tenant agents or
brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the
listing broker's offer of compensation to subagents or buyer's agents or brokers nor make
the submission of an executed offer to purchase/lease contingent on the listing broker's
agreement to modify the offer of compensation. (Amended 1/98)
- Standard of Practice 16-17
REALTORS® acting as subagents or as buyer/tenant agents or
brokers, shall not attempt to extend a listing broker's offer of cooperation and/or
compensation to other brokers without the consent of the listing broker. (Amended 1/98)
- Standard of Practice 16-18
REALTORS® shall not use information obtained by them from
the listing broker, through offers to cooperate made through Multiple Listing Services
or through offers of cooperation to refer listing brokers' clients to other brokers or to create buyer/tenant relationships with listing borkers' clients, unless suchus is authorized by listing brokers. (Amended 1/02)
- Standard of Practice 16-19
Signs giving notice of property for sale, rent, lease, or
exchange shall not be placed on property without consent of the seller/landlord. (Amended
1/93)
- Standard of Practice 16-20
REALTORS®, prior to or after terminating their relationship
with their current firm, shall not induce clients of their current firm to cancel
exclusive contractual agreements between the client and that firm. This does not preclude
REALTORS® (principals) from establishing agreements with their associated licensees
governing assignability of exclusive agreements. (Adopted 1/98)
Article 17
In the event of contractual disputes or specific
non-contractual disputes as defined in Standard of Practice 17-4 between REALTORS® (principals)
associated with different firms, arising out of their relationship as REALTORS®, the
REALTORS® shall submit the dispute to arbitration in accordance with the regulations of
their Board or Boards rather than litigate the matter.
In the event clients of REALTORS® wish to arbitrate
contractual disputes arising out of real estate transactions, REALTORS® shall arbitrate
those disputes in accordance with the regulations of their Board, provided the clients
agree to be bound by the decision.
The obligation to participate in arbitration contemplated by this Article includes the obligation of REALTORS (principals) to cause their firms to arbitrate and be bound by any award. (Amended 1/01)
- Standard of Practice 17-1
The filing of litigation and refusal to withdraw from it by
REALTORS® in an arbitrable matter constitutes a refusal to arbitrate. (Adopted 2/86)
- Standard of Practice 17-2
Article 17 does not require REALTORS® to arbitrate in those
circumstances when all parties to the dispute advise the Board in writing that they choose
not to arbitrate before the Board. (Amended 1/93)
- Standard of Practice 17-3
REALTORS®, when acting solely as principals in a real estate
transaction, are not obligated to arbitrate disputes with other REALTORS® absent a
specific written agreement to the contrary. (Adopted 1/96)
- Standard of Practice 17-4
Specific non-contractual disputes that are subject to
arbitration pursuant to Article 17 are:
1) Where a listing broker has compensated a cooperating
broker and another cooperating broker subsequently claims to be the procuring cause of the
sale or lease. In such cases the complainant may name the first cooperating broker as
respondent and arbitration may proceed without the listing broker being named as a
respondent. Alternatively, if the complaint is brought against the listing broker, the
listing broker may name the first cooperating broker as a third-party respondent. In
either instance the decision of the hearing panel as to procuring cause shall be
conclusive with respect to all current or subsequent claims of the parties for
compensation arising out of the underlying cooperative transaction. (Adopted 1/97)
2) Where a buyer or tenant representative is compensated by
the seller or landlord, and not by the listing broker, and the listing broker, as a
result, reduces the commission owed by the seller or landlord and, subsequent to such
actions, another cooperating broker claims to be the procuring cause of sale or lease. In
such cases the complainant may name the first cooperating broker as respondent and
arbitration may proceed without the listing broker being named as a respondent.
Alternatively, if the complaint is brought against the listing broker, the listing broker
may name the first cooperating broker as a third-party respondent. In either instance the
decision of the hearing panel as to procuring cause shall be conclusive with respect to
all current or subsequent claims of the parties for compensation arising out of the
underlying cooperative transaction. (Adopted 1/97)
3) Where a buyer or tenant representative is compensated by
the buyer or tenant and, as a result, the listing broker reduces the commission owed by
the seller or landlord and, subsequent to such actions, another cooperating broker claims
to be the procuring cause of sale or lease. In such cases the complainant may name the
first cooperating broker as respondent and arbitration may proceed without the listing
broker being named as a respondent. Alternatively, if the complaint is brought against the
listing broker, the listing broker may name the first cooperating broker as a third-party
respondent. In either instance the decision of the hearing panel as to procuring cause
shall be conclusive with respect to all current or subsequent claims of the parties for
compensation arising out of the underlying cooperative transaction. (Adopted 1/97)
4) Where two or more listing brokers claim entitlement to
compensation pursuant to open listings with a seller or landlord who agrees to participate
in arbitration (or who requests arbitration) and who agrees to be bound by the decision.
In cases where one of the listing brokers has been compensated by the seller or landlord,
the other listing broker, as complainant, may name the first listing broker as respondent
and arbitration may proceed between the brokers. (Adopted 1/97)
The Code of Ethics was adopted in 1913. Amended at the Annual
Convention in 1924, 1928, 1950, 1951, 1952, 1955, 1956, 1961, 1962, 1974, 1982, 1986,
1987, 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997 and 1998 and 1999, 2000 and 2001.
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.
