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Code
of Ethics and Standards of Practice
of
the National Association of REALTORS®
Effective
January 1, 2005
Duties
to Clients and Customers
Duties
to the Public
Duties
to REALTORS®
Where
the word REALTORS® is used in this Code and Preamble, it shall be deemed to include REALTOR-ASSOCIATE®s.
While
the Code of Ethics establishes obligations that may be higher
than those mandated by law, in any instance where the Code
of Ethics and the law conflict, the obligations of the law
must take precedence.
Preamble
Under
all is the land. Upon its wise utilization and widely allocated
ownership depend the survival and growth of free institutions
and of our civilization. REALTORS® should recognize that the interests of the nation and its citizens require the
highest and best use of the land and the widest distribution
of land ownership. They require the creation of adequate
housing, the building of functioning cities, the development
of productive industries and farms, and the preservation
of a healthful environment.
Such
interests impose obligations beyond those of ordinary commerce.
They impose grave social responsibility and a patriotic duty
to which REALTORS® should dedicate themselves, and for which they should be diligent in preparing
themselves. REALTORS®, therefore, are zealous to maintain and improve the standards of their calling
and share with their fellow REALTORS® a common responsibility for its integrity and honor.
In
recognition and appreciation of their obligations to clients,
customers, the public, and each other, REALTORS® continuously strive to become and remain informed on issues affecting real estate
and, as knowledgeable professionals, they willingly share
the fruit of their experience and study with others. They
identify and take steps, through enforcement of this Code
of Ethics and by assisting appropriate regulatory bodies,
to eliminate practices which may damage the public or which
might discredit or bring dishonor to the real estate profession.
REALTORS® having direct personal knowledge of conduct that may violate the Code of Ethics
involving misappropriation of client or customer funds or
property, willful discrimination, or fraud resulting in substantial
economic harm, bring such matters to the attention of the
appropriate Board or Association of REALTORS®. (Amended 1/00)
Realizing
that cooperation with other real estate professionals promotes
the best interests of those who utilize their services, REALTORS® urge exclusive representation of clients; do not attempt to gain any unfair
advantage over their competitors; and they refrain from making
unsolicited comments about other practitioners. In instances
where their opinion is sought, or where REALTORS® believe that comment is necessary, their opinion is offered in an objective,
professional manner, uninfluenced by any personal motivation
or potential advantage or gain.
The
term REALTOR® has come to connote competency, fairness, and high integrity resulting from
adherence to a lofty ideal of moral conduct in business relations.
No inducement of profit and no instruction from clients ever
can justify departure from this ideal.
In
the interpretation of this obligation, REALTORS® can take no safer guide than that which has been handed down through the centuries,
embodied in the Golden Rule, "Whatsoever ye would that others should do to you, do ye even so to them."
Accepting
this standard as their own, REALTORS® pledge to observe its spirit in all of their activities 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 to the client is primary, but it does not relieve
REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller,
landlord, tenant or other party in a non-agency capacity,
REALTORS® remain obligated to treat all parties honestly. (Amended 1/01)
- Standard
of Practice 1-1
REALTORS®,
when acting as principals in a real estate
transaction, remain obligated by the duties
imposed by the Code of Ethics. (Amended
1/93)
- Standard
of Practice 1-2
The
duties 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 1/04)
- Standard
of Practice 1-3
REALTORS®,
in attempting to secure a listing, shall
not deliberately mislead the owner as to
market value.
- Standard
of Practice 1-4
REALTORS®,
when seeking to become a buyer/tenant representative,
shall not mislead buyers or tenants as
to savings or other benefits that might
be realized through use of the REALTOR®'s services. (Amended 1/93)
- Standard
of Practice 1-5
REALTORS® may
represent the seller/landlord and buyer/tenant
in the same transaction only after full
disclosure to and with informed consent
of both parties. (Adopted 1/93)
- Standard
of Practice 1-6
REALTORS® shall
submit offers and counter-offers objectively
and as quickly as possible. (Adopted 1/93,
Amended 1/95)
- Standard
of Practice 1-7
When
acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter-offers
until closing or execution of a lease unless
the seller/landlord has waived this obligation
in writing. REALTORS® shall not be obligated to continue to market the property after an offer has
been accepted by the seller/landlord. REALTORS® shall recommend that sellers/landlords obtain the advice of legal counsel prior
to acceptance of a subsequent offer except
where the acceptance is contingent on the
termination of the pre-existing purchase
contract or lease. (Amended 1/93)
- Standard
of Practice 1-8
REALTORS® ,
acting as agents or brokers of buyers/tenants,
shall submit to buyers/tenants all offers
and counter-offers until acceptance but
have no obligation to continue to show
properties to their clients after an offer
has been accepted unless otherwise agreed
in writing. REALTORS®, acting as agents or brokers of buyers/tenants, shall recommend that buyers/tenants
obtain the advice of legal counsel if there
is a question as to whether a pre-existing
contract has been terminated. (Adopted
1/93, Amended 1/99)
- Standard
of Practice 1-9
The
obligation of REALTORS® to preserve confidential information (as defined by state law) provided by their
clients in the course of any agency relationship
or non-agency relationship recognized by
law continues after termination of agency
relationships or any non-agency relationships
recognized by law. REALTORS® shall not knowingly, during or following the termination of professional relationships
with their clients:
- reveal
confidential information of clients; or
- use
confidential information of clients to the
disadvantage of clients; or
- use
confidential information of clients for the
REALTOR®'s advantage or the advantage of third parties unless:
- clients
consent after full disclosure; or
- REALTORS® are
required by court order; or
- it
is the intention of a client to commit
a crime and the information is necessary
to prevent the crime; or
- it
is necessary to defend a REALTOR® or the REALTOR®'s employees or associates against an accusation of wrongful conduct.
Information
concerning latent material defects is not considered
confidential information under this Code of Ethics.
(Adopted 1/93, Amended 1/01)
- Standard
of Practice 1-10
REALTORS® shall,
consistent with the terms and conditions
of their real estate licensure and their
property management agreement, competently
manage the property of clients with due
regard for the rights, safety and health
of tenants and others lawfully on the premises.
(Adopted 1/95, Amended 1/00)
- Standard
of Practice 1-11
REALTORS® who
are employed to maintain or manage a client's
property shall exercise due diligence and
make reasonable efforts to protect it against
reasonably foreseeable contingencies and
losses. (Adopted 1/95)
- Standard
of Practice 1-12
When
entering into listing contracts, REALTORS® must advise sellers/landlords of:
- the
REALTOR®'s company policies regarding cooperation and the amount(s) of any compensation
that will be offered to subagents,
buyer/tenant agents, and/or brokers
acting in legally recognized non-agency
capacities;
- the
fact that buyer/tenant agents or
brokers, even if compensated by listing
brokers, or by sellers/landlords
may represent the interests of buyers/tenants;
and
- any
potential for listing brokers to
act as disclosed dual agents, e.g.
buyer/tenant agents. (Adopted 1/93,
Renumbered 1/98, Amended 1/03)
- Standard
of Practice 1-13
When
entering into buyer/tenant agreements,
REALTORS® must advise potential clients of:
- the
REALTOR®'s company policies regarding cooperation;
- the
amount of compensation to be paid by the client;
- the
potential for additional or offsetting compensation
from other brokers, from the seller or landlord,
or from other parties; and
- any
potential for the buyer/tenant representative
to act as a disclosed dual agent, e.g. listing
broker, subagent, landlord's agent, etc. (Adopted
1/93, Renumbered 1/98, Amended 1/04)
- Standard
of Practice 1-14
Fees
for preparing appraisals or other valuations
shall not be contingent upon the amount
of the appraisal or valuation. (Adopted
1/02)
- Standard
of Practice 1-15
REALTORS®,
in response to inquiries from buyers or
cooperating brokers shall, with the sellers'
approval, divulge the existence of offers
on the property. (Adopted 1/03)
Article
2
REALTORS® shall
avoid exaggeration, misrepresentation, or
concealment of pertinent facts relating to
the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property,
to advise on matters outside the scope of
their real estate license, or to disclose
facts which are confidential under the scope
of agency or non-agency relationships as
defined by state law. (Amended 1/00)
- Standard
of Practice 2-1
REALTORS® shall
only be obligated to discover and disclose
adverse factors reasonably apparent to
someone with expertise in those areas required
by their real estate licensing authority.
Article 2 does not impose upon the REALTOR® the obligation of expertise in other professional or technical disciplines.
(Amended 1/96)
- Standard
of Practice 2-2
(Renumbered
as Standard of Practice 1-12 1/98)
- Standard
of Practice 2-3
(Renumbered
as Standard of Practice 1-13 1/98)
- Standard
of Practice 2-4
REALTORS® shall
not be parties to the naming of a false
consideration in any document, unless it
be the naming of an obviously nominal consideration.
- Standard
of Practice 2-5
Factors
defined as "non-material" by law or regulation or which are expressly referenced in law or regulation
as not being subject to disclosure are
considered not "pertinent" for purposes of Article 2. (Adopted 1/93)
Article
3
REALTORS® shall
cooperate with other brokers except when
cooperation is not in the client's best interest.
The obligation to cooperate does not include
the obligation to share commissions, fees,
or to otherwise compensate another broker.
(Amended 1/95)
- Standard
of Practice 3-1
REALTORS®,
acting as exclusive agents or brokers of
sellers/ landlords, establish the terms
and conditions of offers to cooperate.
Unless expressly indicated in offers to
cooperate, cooperating brokers may not
assume that the offer of cooperation includes
an offer of compensation. Terms of compensation,
if any, shall be ascertained by cooperating
brokers before beginning efforts to accept
the offer of cooperation. (Amended 1/99)
- Standard
of Practice 3-2
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 3-3
Standard
of Practice 3-2 does not preclude the listing
broker and cooperating broker from entering
into an agreement to change cooperative
compensation. (Adopted 1/94)
- Standard
of Practice 3-4
REALTORS®,
acting as listing brokers, have an affirmative
obligation to disclose the existence of
dual or variable rate commission arrangements
(i.e., listings where one amount of commission
is payable if the listing broker's firm
is the procuring cause of sale/lease and
a different amount of commission is payable
if the sale/lease results through the efforts
of the seller/ landlord or a cooperating
broker). The listing broker shall, as soon
as practical, disclose the existence of
such arrangements to potential cooperating
brokers and shall, in response to inquiries
from cooperating brokers, disclose the
differential that would result in a cooperative
transaction or in a sale/lease that results
through the efforts of the seller/landlord.
If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such
information to their client before the
client makes an offer to purchase or lease.
(Amended 1/02)
- Standard
of Practice 3-5
It
is the obligation of subagents to promptly
disclose all pertinent facts to the principal's
agent prior to as well as after a purchase
or lease agreement is executed. (Amended
1/93)
- Standard
of Practice 3-6
REALTORS® shall
disclose the existence of accepted offers,
including offers with unresolved contingencies,
to any broker seeking cooperation. (Adopted
5/86, Amended 1/04)
- Standard
of Practice 3-7
When
seeking information from another REALTOR® concerning property under a management or listing agreement, REALTORS® shall disclose their REALTOR® status and whether their interest is personal or on behalf of a client and,
if on behalf of a client, their representational
status. (Amended 1/95)
- Standard
of Practice 3-8
REALTORS® shall
not misrepresent the availability of access
to show or inspect a listed property. (Amended
11/87)
Article
4
REALTORS® shall
not acquire an interest in or buy or present
offers from themselves, any member of their
immediate families, their firms or any member
thereof, or any entities in which they have
any ownership interest, any real property
without making their true position known
to the owner or the owner's agent or broker.
In selling property they own, or in which
they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the
purchaser's representative. (Amended 1/00)
- Standard
of Practice 4-1
For
the protection of all parties, the disclosures
required by Article 4 shall be in writing
and provided by REALTORS® prior to the signing of any contract. (Adopted 2/86)
Article
5
REALTORS® shall
not undertake to provide professional services
concerning a property or its value where
they have a present or contemplated interest
unless such interest is specifically disclosed
to all affected parties.
Article
6
REALTORS® shall
not accept any commission, rebate, or profit on expenditures
made for their client, without the client's knowledge
and consent.
When
recommending real estate products or services (e.g.,
homeowner's insurance, warranty programs, mortgage financing,
title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made
any financial benefits or fees, other than real estate
referral fees, the REALTOR® or REALTOR®'s firm may receive as a direct result of such recommendation. (Amended 1/99)
- Standard
of Practice 6-1
REALTORS® shall
not recommend or suggest to a client or
a customer the use of services of another
organization or business entity in which
they have a direct interest without disclosing
such interest at the time of the recommendation
or suggestion. (Amended 5/88)
Article
7
In
a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by
law, without disclosure to all parties and
the informed consent of the REALTOR®'s client or clients. (Amended 1/93)
Article
8
REALTORS® shall
keep in a special account in an appropriate financial
institution, separated from their own funds, monies coming
into their possession in trust for other persons, such
as escrows, trust funds, clients' monies, and other like
items.
Article
9
REALTORS®,
for the protection of all parties, shall assure whenever
possible that all agreements related to real estate transactions
including, but not limited to, listing and representation
agreements, purchase contracts, and leases are in writing
in clear and understandable language expressing the specific
terms, conditions, obligations and commitments of the
parties. A copy of each agreement shall be furnished
to each party to such agreements upon their signing or
initialing. (Amended 1/04)
- Standard
of Practice 9-1
For
the protection of all parties, REALTORS® shall use reasonable care to ensure that documents pertaining to the purchase,
sale, or lease of real estate are kept
current through the use of written extensions
or amendments. (Amended 1/93)
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
Except
as provided in Standard of Practice 10-3,
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. (Adopted 1/94, Amended 1/05)
- Standard
of Practice 10-2
REALTORS® shall
not print, display or circulate any statement
or advertisement with respect to selling
or renting of a property that indicates
any preference, limitations or discrimination
based on race, color, religion, sex, handicap,
familial status, or national origin. (Adopted
1/94, Renumbered 1/05)
- Standard
of Practice 10-3
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)
- 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
When
REALTORS® prepare opinions of real property value or price, other than in pursuit of a
listing or to assist a potential purchaser
in formulating a purchase offer, such opinions
shall include the following:
- 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
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 exclusive representation
or exclusive brokerage relationship agreements
that other REALTORS® have with clients. (Amended 1/04)
- Standard
of Practice 16-1
Article
16 is not intended to prohibit aggressive
or innovative business practices which
are otherwise ethical and does not prohibit
disagreements with other REALTORS® involving commission, fees, compensation or other forms of payment or expenses.
(Adopted 1/93, Amended 1/95)
- Standard
of Practice 16-2
Article
16 does not preclude REALTORS® from making general announcements to prospects describing their services and
the terms of their availability even though
some recipients may have entered into agency
agreements or other exclusive relationships
with another REALTOR®. A general telephone canvass, general mailing or distribution addressed to all
prospects in a given geographical area
or in a given profession, business, club,
or organization, or other classification
or group is deemed "general" for purposes of this standard. (Amended 1/04)
Article
16 is intended to recognize as unethical two basic
types of solicitations:
First,
telephone or personal solicitations of property owners
who have been identified by a real estate sign, multiple
listing compilation, or other information service
as having exclusively listed their property with
another REALTOR®; and
Second,
mail or other forms of written solicitations of prospects
whose properties are exclusively listed with another
REALTOR® when such solicitations are not part of a general mailing but are directed specifically
to property owners identified through compilations
of current listings, "for sale" or "for rent" signs, or other sources of information required by Article 3 and Multiple Listing
Service rules to be made available to other REALTORS® under offers of subagency or cooperation. (Amended 1/04)
- Standard
of Practice 16-3
Article
16 does not preclude REALTORS® from contacting the client of another broker for the purpose of offering to
provide, or entering into a contract to
provide, a different type of real estate
service unrelated to the type of service
currently being provided (e.g., property
management as opposed to brokerage) or
from offering the same type of service
for property not subject to other brokers'
exclusive agreements. However, information
received through a Multiple Listing Service
or any other offer of cooperation may not
be used to target clients of other REALTORS® to whom such offers to provide services may be made. (Amended 1/04)
- Standard
of Practice 16-4
REALTORS® shall
not solicit a listing which is currently
listed exclusively with another broker.
However, if the listing broker, when asked
by the REALTOR®, refuses to disclose the expiration date and nature of such listing; i.e., an
exclusive right to sell, an exclusive agency,
open listing, or other form of contractual
agreement between the listing broker and
the client, the REALTOR® may contact the owner to secure such information and may discuss the terms upon
which the REALTOR® might take a future listing or, alternatively, may take a listing to become
effective upon expiration of any existing
exclusive listing. (Amended 1/94)
- Standard
of Practice 16-5
REALTORS® shall
not solicit buyer/tenant agreements from
buyers/ tenants who are subject to exclusive
buyer/tenant agreements. However, if asked
by a REALTOR®, the broker refuses to disclose the expiration date of the exclusive buyer/tenant
agreement, the REALTOR® may contact the buyer/tenant to secure such information and may discuss the
terms upon which the REALTOR® might enter into a future buyer/tenant agreement or, alternatively, may enter
into a buyer/tenant agreement to become
effective upon the expiration of any existing
exclusive buyer/tenant agreement. (Adopted
1/94, Amended 1/98)
- Standard
of Practice 16-6
When
REALTORS® are contacted by the client of another REALTOR® regarding the creation of an exclusive relationship to provide the same type
of service, and REALTORS® have not directly or indirectly initiated such discussions, they may discuss
the terms upon which they might enter into
a future agreement or, alternatively, may
enter into an agreement which becomes effective
upon expiration of any existing exclusive
agreement. (Amended 1/98)
- Standard
of Practice 16-7
The
fact that a prospect has retained a REALTOR®
as an exclusive representative or exclusive
broker in one or more past transactions
does not preclude other REALTORS® from
seeking such prospect's future business.
(Amended 1/04)
- Standard
of Practice 16-8
The
fact that an exclusive agreement has been
entered into with a REALTOR® shall not
preclude or inhibit any other REALTOR®
from entering into a similar agreement
after the expiration of the prior agreement.
(Amended 1/98)
- Standard
of Practice 16-9
REALTORS®,
prior to entering into a representation
agreement, have an affirmative obligation
to make reasonable efforts to determine
whether the prospect is subject to a current,
valid exclusive agreement to provide the
same type of real estate service. (Amended
1/04)
- Standard
of Practice 16-10
REALTORS®,
acting as buyer or tenant representatives
or brokers, shall disclose that relationship
to the seller/landlord's representative
or broker at first contact and shall provide
written confirmation of that disclosure
to the seller/landlord's representative
or broker not later than execution of a
purchase agreement or lease. (Amended 1/04)
- Standard
of Practice 16-11
On
unlisted property, REALTORS® acting as
buyer/tenant representatives or brokers
shall disclose that relationship to the
seller/landlord at first contact for that
buyer/tenant and shall provide written
confirmation of such disclosure to the
seller/landlord not later than execution
of any purchase or lease agreement. (Amended
1/04)
REALTORS®
shall make any request for anticipated compensation
from the seller/ landlord at first contact. (Amended
1/98)
- Standard
of Practice 16-12
REALTORS®,
acting as representatives or brokers of
sellers/landlords or as subagents of listing
brokers, shall disclose that relationship
to buyers/tenants as soon as practicable
and shall provide written confirmation
of such disclosure to buyers/tenants not
later than execution of any purchase or
lease agreement. (Amended 1/04)
- Standard
of Practice 16-13
All
dealings concerning property exclusively
listed, or with buyer/tenants who are subject
to an exclusive agreement shall be carried
on with the client's representative or
broker, and not with the client, except
with the consent of the client's representative
or broker or except where such dealings
are initiated by the client.
Before
providing substantive services (such as writing a
purchase offer or presenting a CMA) to prospects,
REALTORS® shall ask prospects whether they are a
party to any exclusive representation agreement.
REALTORS® shall not knowingly provide substantive
services concerning a prospective transaction to
prospects who are parties to exclusive representation
agreements, except with the consent of the prospects'
exclusive representatives or at the direction of
prospects. (Adopted 1/93, Amended 1/04)
- Standard
of Practice 16-14
REALTORS®
are free to enter into contractual relationships
or to negotiate with sellers/ landlords,
buyers/tenants or others who are not subject
to an exclusive agreement but shall not
knowingly obligate them to pay more than
one commission except with their informed
consent. (Amended 1/98)
- Standard
of Practice 16-15
In
cooperative transactions REALTORS® shall
compensate cooperating REALTORS® (principal
brokers) and shall not compensate nor offer
to compensate, directly or indirectly,
any of the sales licensees employed by
or affiliated with other REALTORS® without
the prior express knowledge and consent
of the cooperating broker.
- Standard
of Practice 16-16
REALTORS®,
acting as subagents or buyer/tenant representatives
or brokers, shall not use the terms of
an offer to purchase/lease to attempt to
modify the listing broker's offer of compensation
to subagents or buyer/tenant representatives
or brokers nor make the submission of an
executed offer to purchase/lease contingent
on the listing broker's agreement to modify
the offer of compensation. (Amended 1/04)
- Standard
of Practice 16-17
REALTORS®,
acting as subagents or as buyer/tenant
representatives or brokers, shall not attempt
to extend a listing broker's offer of cooperation
and/or compensation to other brokers without
the consent of the listing broker. (Amended
1/04)
- Standard
of Practice 16-18
REALTORS® shall
not use information obtained from listing
brokers through offers to cooperate made
through multiple listing services or through
other offers of cooperation to refer listing
brokers' clients to other brokers or to
create buyer/tenant relationships with
listing brokers' clients, unless such use
is authorized by listing brokers. (Amended
1/02)
- Standard
of Practice 16-19
Signs
giving notice of property for sale, rent,
lease, or exchange shall not be placed
on property without consent of the seller/landlord.
(Amended 1/93)
- Standard
of Practice 16-20
REALTORS®,
prior to or after 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:
- Where
a listing broker has compensated a cooperating
broker and another cooperating broker subsequently
claims to be the procuring cause of the sale
or lease. In such cases the complainant may
name the first cooperating broker as respondent
and arbitration may proceed without the listing
broker being named as a respondent. Alternatively,
if the complaint is brought against the listing
broker, the listing broker may name the first
cooperating broker as a third-party respondent.
In either instance the decision of the hearing
panel as to procuring cause shall be conclusive
with respect to all current or subsequent claims
of the parties for compensation arising out
of the underlying cooperative transaction. (Adopted 1/97)
- Where
a buyer or tenant representative is compensated
by the seller or landlord, and not by the listing
broker, and the listing broker, as a result,
reduces the commission owed by the seller or
landlord and, subsequent to such actions, another
cooperating broker claims to be the procuring
cause of sale or lease. In such cases the complainant
may name the first cooperating broker as respondent
and arbitration may proceed without the listing
broker being named as a respondent. Alternatively,
if the complaint is brought against the listing
broker, the listing broker may name the first
cooperating broker as a third-party respondent.
In either instance the decision of the hearing
panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation
arising out of the underlying cooperative transaction.
(Adopted 1/97)
- Where
a buyer or tenant representative is compensated
by the buyer or tenant and, as a result, the
listing broker reduces the commission owed
by the seller or landlord and, subsequent to
such actions, another cooperating broker claims
to be the procuring cause of sale or lease.
In such cases the complainant may name the
first cooperating broker as respondent and
arbitration may proceed without the listing
broker being named as a respondent. Alternatively,
if the complaint is brought against the listing
broker, the listing broker may name the first
cooperating broker as a third-party respondent.
In either instance the decision of the hearing
panel as to procuring cause shall be conclusive
with respect to all current or subsequent claims of the parties for compensation arising out
of the underlying cooperative transaction.
(Adopted 1/97)
- Where
two or more listing brokers claim entitlement
to compensation pursuant to open listings with
a seller or landlord who agrees to participate
in arbitration (or who requests arbitration)
and who agrees to be bound by the decision.
In cases where one of the listing brokers has
been compensated by the seller or landlord,
the other listing broker, as complainant, may
name the first listing broker as respondent
and arbitration may proceed between the brokers.
(Adopted 1/97)
- 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)
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 and 2004.
Explanatory
Notes
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