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
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 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
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;
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
REALTORS®, 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
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)
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
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 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
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 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
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)
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
REALTOR® 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
REALTORS®? 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
REALTORS® 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)
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)
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
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. 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 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 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®
association, in instances where the respondent(s) REALTOR® 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, and 2005.
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.
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