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Code of Ethics and Standards of Practice
of the NATIONAL ASSOCIATION OF REALTORS®
Effective January 1, 2004
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
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 pursuit of a listing or to assist a
potential purchaser in formulating a purchase offer, such opinions
shall 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 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)
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 and 2003.
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.
© 2004, NATIONAL ASSOCIATION OF REALTORS®, All Rights Reserved
Form No. 166-288 (12/03)
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