Code of Ethics and Standards of Practice of the National
Association of REALTORS®
Effective January 1, 2001
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; “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 1/99)
• 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:
1)
reveal confidential information of clients;
or
2)
use confidential information of clients to
the disadvantage of clients; or
3)
use confidential information of clients for
the REALTOR®’s advantage or the advantage of third parties unless:
a)
clients consent after full disclosure; or
b)
REALTORS® are required by court order; or
c)
it is the intention of a client to commit a
crime and the information is necessary to prevent the crime; or
d)
it is necessary to defend 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:
1)
the REALTOR®’s general company policies
regarding cooperation with and compensation to subagents, buyer/ tenant agents
and/or brokers acting in legally recognized non-agency capacities;
2)
the fact that buyer/tenant agents or brokers,
even if compensated by listing brokers, or by sellers/landlords may represent
the interests of buyers/tenants; and
3)
any potential for listing brokers to act as
disclosed dual agents, e.g. buyer/tenant agents. (Adopted 1/93, Renumbered
1/98, Amended 1/99)
• Standard of Practice 1-13
When entering into buyer/tenant
agreements, REALTORS® must advise potential clients of:
1)
the REALTOR®’s general company policies
regarding cooperation and compensation; and
2) any potential for the buyer/tenant representative to act as a disclosed dual agent, e.g. listing broker, subagent, landlord’s agent, etc. (Adopted 1/93, Renumbered 1/98, Amended 1/99)
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. (Amended 1/94)
• 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 an accepted offer to any broker seeking cooperation. (Adopted
5/86)
• 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 agreements shall be in writing, and shall be in clear
and understandable language expressing the specific terms, conditions,
obligations and commitments of the parties. A copy of each agreement shall be
furnished to each party upon their signing or initialing. (Amended 1/95)
• 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)
Article 12
REALTORS® shall be careful at all times to present a true
picture in their advertising and representations to the public. REALTORS® shall
also ensure that their professional status (e.g., broker, appraiser, property
manager, etc.) or status as REALTORS® is clearly identifiable in any such
advertising. (Amended 1/93)
• Standard of Practice 12-1
REALTORS® may use the term “free”
and similar terms in their advertising and in other representations provided
that all terms governing availability of the offered product or service are clearly
disclosed at the same time. (Amended 1/97)
• Standard of Practice 12-2
REALTORS® may represent their
services as “free” or without cost even if they expect to receive compensation
from a source other than their client provided that the potential for the
REALTOR® to obtain a benefit from a third party is clearly disclosed at the
same time. (Amended 1/97)
• Standard of Practice 12-3
The offering of premiums, prizes,
merchandise discounts or other inducements to list, sell, purchase, or lease is
not, in itself, unethical even if receipt of the benefit is contingent on
listing, selling, purchasing, or leasing through the REALTOR® making the offer.
However, REALTORS® must exercise care and candor in any such advertising or
other public or private representations so that any party interested in
receiving or otherwise benefiting from the REALTOR®’s offer will have clear,
thorough, advance understanding of all the terms and conditions of the offer.
The offering of any inducements to do business is subject to the limitations
and restrictions of state law and the ethical obligations established by any
applicable Standard of Practice. (Amended 1/95)
• Standard of Practice 12-4
REALTORS® shall not offer for sale/lease or advertise property
without authority. When acting as listing brokers or as subagents, REALTORS®
shall not quote a price different from that agreed upon with the
seller/landlord. (Amended 1/93)
• Standard of Practice 12-5
REALTORS® shall not advertise nor permit any person
employed by or affiliated with them to advertise listed property without
disclosing the name of the firm.
(Adopted 11/86)
• Standard of Practice 12-6
REALTORS®, when advertising unlisted real property for sale/lease
in which they have an ownership interest, shall disclose their status as both
owners/landlords and as REALTORS® or real estate licensees. (Amended 1/93)
• Standard of Practice 12-7
Only REALTORS® who participated in the transaction as the
listing broker or cooperating broker (selling broker) may claim to have “sold”
the property. Prior to closing, a cooperating broker may post a “sold” sign
only with the consent of the listing broker.
(Amended 1/96)
Article 13
REALTORS® shall not engage in activities that constitute
the unauthorized practice of law and shall recommend that legal counsel be
obtained when the interest of any party to the transaction requires it.
Article 14
If charged with unethical practice or asked to present
evidence or to cooperate in any other way, in any professional standards
proceeding or investigation, REALTORS® shall place all pertinent facts before
the proper tribunals of the Member Board or affiliated institute, society, or
council in which membership is held and shall take no action to disrupt or
obstruct such processes. (Amended 1/99)
• Standard of Practice 14-1
REALTORS® shall not be subject to disciplinary proceedings
in more than one Board of REALTORS® or affiliated institute, society or council
in which they hold membership with respect to alleged violations of the Code of
Ethics relating to the same transaction or event. (Amended 1/95)
• Standard of Practice 14-2
REALTORS® shall not make any unauthorized disclosure or
dissemination of the allegations, findings, or decision developed in connection
with an ethics hearing or appeal or in connection with an arbitration hearing
or procedural review. (Amended 1/92)
• Standard of Practice 14-3
REALTORS® shall not obstruct the Board’s investigative or
professional standards proceedings by instituting or threatening to institute
actions for libel, slander or defamation against any party to a professional
standards proceeding or their witnesses based on the filing of an arbitration
request, an ethics complaint, or testimony given before any tribunal. (Adopted
11/87, Amended 1/99)
• Standard of Practice 14-4
REALTORS® shall not intentionally impede the Board’s
investigative or disciplinary proceedings by filing multiple ethics complaints
based on the same event or transaction. (Adopted 11/88)
Duties to REALTORS®
Article 15
REALTORS® shall not knowingly or recklessly make false or
misleading statements about competitors, their businesses, or their business
practices. (Amended 1/92)
• Standard of Practice 15-1
REALTORS® shall not knowingly or recklessly file false or
unfounded ethics complaints. (Adopted 1/00)
Article 16
REALTORS® shall not engage in any practice or take any
action inconsistent with the agency or other exclusive relationship recognized
by law that other REALTORS® have with clients. (Amended 1/98)
• Standard of Practice 16-1
Article 16 is not intended to prohibit aggressive or
innovative business practices which are otherwise ethical and does not prohibit
disagreements with other REALTORS® involving commission, fees, compensation or
other forms of payment or expenses. (Adopted 1/93, Amended 1/95)
• Standard of Practice 16-2
Article 16 does not preclude REALTORS® from making general
announcements to prospective clients describing their services and the terms of
their availability even though some recipients may have entered into agency
agreements or other exclusive relationships with another REALTOR®. A general
telephone canvass, general mailing or distribution addressed to all prospective
clients in a given geographical area or in a given profession, business, club,
or organization, or other classification or group is deemed “general” for
purposes of this standard. (Amended 1/98)
Article 16 is intended to recognize as unethical two basic
types of solicitations:
First, telephone or personal solicitations of property
owners who have been identified by a real estate sign, multiple listing
compilation, or other information service as having exclusively listed their
property with another REALTOR®; and
Second, mail or other forms of written solicitations of
prospective clients whose properties are exclusively listed with another
REALTOR® when such solicitations are not part of a general mailing but are
directed specifically to property owners identified through compilations of
current listings, “for sale” or “for rent” signs, or other sources of
information required by Article 3 and Multiple Listing Service rules to be made
available to other REALTORS® under offers of subagency or cooperation. (Amended
1/93)
• Standard of Practice 16-3
Article 16 does not preclude REALTORS® from contacting the
client of another broker for the purpose of offering to provide, or entering
into a contract to provide, a different type of real estate service unrelated
to the type of service currently being provided (e.g., property management as
opposed to brokerage). However, information received through a Multiple Listing
Service or any other offer of cooperation may not be used to target clients of
other REALTORS® to whom such offers to provide services may be made. (Amended
1/93)
• Standard of Practice 16-4
REALTORS® shall not solicit a
listing which is currently listed exclusively with another broker. However, if
the listing broker, when asked by the REALTOR®, refuses to disclose the
expiration date and nature of such listing; i.e., an exclusive right to sell, an
exclusive agency, open listing, or other form of contractual agreement between
the listing broker and the client, the REALTOR® may contact the owner to secure
such information and may discuss the terms upon which the REALTOR® might take a
future listing or, alternatively, may take a listing to become effective upon
expiration of any existing exclusive listing. (Amended 1/94)
• Standard of Practice 16-5
REALTORS® shall not solicit
buyer/tenant agreements from buyers/tenants who are subject to exclusive buyer/tenant
agreements. However, if asked by a REALTOR®, the broker refuses to disclose the
expiration date of the exclusive buyer/tenant agreement, the REALTOR® may
contact the buyer/tenant to secure such information and may discuss the terms
upon which the REALTOR® might enter into a future buyer/tenant agreement or,
alternatively, may enter into a buyer/tenant agreement to become effective upon
the expiration of any existing exclusive buyer/tenant agreement. (Adopted 1/94,
Amended 1/98)
• Standard of Practice 16-6
When REALTORS® are contacted by
the client of another REALTOR® regarding the creation of an exclusive
relationship to provide the same type of service, and REALTORS® have not
directly or indirectly initiated such discussions, they may discuss the terms
upon which they might enter into a future agreement or, alternatively, may
enter into an agreement which becomes effective upon expiration of any existing
exclusive agreement. (Amended 1/98)
• Standard of Practice 16-7
The fact that a client has
retained a REALTOR® as an agent or in another exclusive relationship in one or
more past transactions does not preclude other REALTORS® from seeking such
former client’s future business. (Amended 1/98)
• Standard of Practice 16-8
The fact that an exclusive
agreement has been entered into with a REALTOR® shall not preclude or inhibit
any other REALTOR® from entering into a similar agreement after the expiration
of the prior agreement. (Amended 1/98)
• Standard of Practice 16-9
REALTORS®, prior to entering into
an agency agreement or other exclusive relationship, have an affirmative
obligation to make reasonable efforts to determine whether the client is
subject to a current, valid exclusive agreement to provide the same type of
real estate service. (Amended 1/98)
• Standard of Practice 16-10
REALTORS®, acting as agents of, or
in another relationship with, buyers or tenants, shall disclose that
relationship to the seller/landlord’s agent or broker at first contact and
shall provide written confirmation of that disclosure to the seller/landlord’s
agent or broker not later than execution of a purchase agreement or lease.
(Amended 1/98)
• Standard of Practice 16-11
On unlisted property, REALTORS®
acting as buyer/tenant agents or brokers shall disclose that relationship to
the seller/landlord at first contact for that client and shall provide written
confirmation of such disclosure to the seller/landlord not later than execution
of any purchase or lease agreement.
REALTORS® shall make any request
for anticipated compensation from the seller/landlord at first contact.
(Amended 1/98)
• Standard of Practice 16-12
REALTORS®, acting as agents or
brokers of sellers/landlords or as subagents of listing brokers, shall disclose
that relationship to buyers/tenants as soon as practicable and shall provide
written confirmation of such disclosure to buyers/tenants not later than
execution of any purchase or lease agreement. (Amended 1/98)
• Standard of Practice 16-13
All dealings concerning property exclusively
listed, or with buyer/tenants who are subject to an exclusive agreement shall
be carried on with the client’s agent or broker, and not with the client,
except with the consent of the client’s agent or broker or except where such
dealings are initiated by the client. (Adopted 1/93, Amended 1/98)
• Standard of Practice 16-14
REALTORS® are free to enter into
contractual relationships or to negotiate with sellers/landlords,
buyers/tenants or others who are not subject to an exclusive agreement but
shall not knowingly obligate them to pay more than one commission except with
their informed consent. (Amended 1/98)
• Standard of Practice 16-15
In cooperative transactions
REALTORS® shall compensate cooperating REALTORS® (principal brokers) and shall
not compensate nor offer to compensate, directly or indirectly, any of the
sales licensees employed by or affiliated with other REALTORS® without the
prior express knowledge and consent of the cooperating broker.
• Standard of Practice 16-16
REALTORS®, acting as subagents or
buyer/tenant agents or brokers, shall not use the terms of an offer to
purchase/lease to attempt to modify the listing broker’s offer of compensation
to subagents or buyer’s agents or brokers nor make the submission of an executed
offer to purchase/lease contingent on the listing broker’s agreement to modify
the offer of compensation. (Amended 1/98)
• Standard of Practice 16-17
REALTORS® acting as subagents or
as buyer/tenant agents or brokers, shall not attempt to extend a listing
broker’s offer of cooperation and/or compensation to other brokers without the
consent of the listing broker. (Amended 1/98)
• Standard of Practice 16-18
REALTORS® shall not use
information obtained by them from the listing broker, through offers to
cooperate received through Multiple Listing Services or other sources
authorized by the listing broker, for the purpose of creating a referral
prospect to a third broker, or for creating a buyer/tenant prospect unless such
use is authorized by the listing broker. (Amended 1/93)
• Standard of Practice 16-19
Signs giving notice of property
for sale, rent, lease, or exchange shall not be placed on property without
consent of the seller/landlord. (Amended 1/93)
• Standard of Practice 16-20
REALTORS®, prior to or after
terminating their relationship with their current firm, shall not induce
clients of their current firm to cancel exclusive contractual agreements
between the client and that firm. This does not preclude REALTORS® (principals)
from establishing agreements with their associated licensees governing
assignability of exclusive agreements. (Adopted 1/98)
Article 17
In the event of contractual disputes or specific
non-contractual disputes as defined in Standard of Practice 17-4 between REALTORS®
(principals) associated with different firms, arising out of their relationship
as REALTORS®, the REALTORS® shall submit the dispute to arbitration in
accordance with the regulations of their Board or Boards rather than litigate
the matter.
In the event clients of REALTORS® wish to arbitrate
contractual disputes arising out of real estate transactions, REALTORS® shall
arbitrate those disputes in accordance with the regulations of their Board,
provided the clients agree to be bound by the decision.
The obligation to participate in arbitration contemplated
by this Article includes the obligation of REALTORS® (principals) to cause
their firms to arbitrate and be bound by any award. (Amended 1/01)
• Standard of Practice 17-1
The filing of litigation and
refusal to withdraw from it by REALTORS® in an arbitrable matter constitutes a
refusal to arbitrate. (Adopted 2/86)
• Standard of Practice 17-2
Article 17 does not require
REALTORS® to arbitrate in those circumstances when all parties to the dispute
advise the Board in writing that they choose not to arbitrate before the Board.
(Amended 1/93)
• Standard of Practice 17-3
REALTORS®, when acting solely as
principals in a real estate transaction, are not obligated to arbitrate
disputes with other REALTORS® absent a specific written agreement to the
contrary. (Adopted 1/96)
• Standard of Practice 17-4
Specific non-contractual disputes
that are subject to arbitration pursuant to Article 17 are:
1)
Where a listing broker has compensated a
cooperating broker and another cooperating broker subsequently claims to be the
procuring cause of the sale or lease. In such cases the complainant may name
the first cooperating broker as respondent and arbitration may proceed without
the listing broker being named as a respondent. Alternatively, if the complaint
is brought against the listing broker, the listing broker may name the first
cooperating broker as a third-party respondent. In either instance the decision
of the hearing panel as to procuring cause shall be conclusive with respect to
all current or subsequent claims of the parties for compensation arising out of
the underlying cooperative transaction. (Adopted 1/97)
2)
Where a buyer or tenant representative is
compensated by the seller or landlord, and not by the listing broker, and the
listing broker, as a result, reduces the commission owed by the seller or
landlord and, subsequent to such actions, another cooperating broker claims to
be the procuring cause of sale or lease. In such cases the complainant may name
the first cooperating broker as respondent and arbitration may proceed without
the listing broker being named as a respondent. Alternatively, if the complaint
is brought against the listing broker, the listing broker may name the first
cooperating broker as a third-party respondent. In either instance the decision
of the hearing panel as to procuring cause shall be conclusive with respect to
all current or subsequent claims of the parties for compensation arising out of
the underlying cooperative transaction. (Adopted 1/97)
3)
Where a buyer or tenant representative is
compensated by the buyer or tenant and, as a result, the listing broker reduces
the commission owed by the seller or landlord and, subsequent to such actions, another
cooperating broker claims to be the procuring cause of sale or lease. In such
cases the complainant may name the first cooperating broker as respondent and
arbitration may proceed without the listing broker being named as a respondent.
Alternatively, if the complaint is brought against the listing broker, the
listing broker may name the first cooperating broker as a third-party
respondent. In either instance the decision of the hearing panel as to
procuring cause shall be conclusive with respect to all current or subsequent
claims of the parties for compensation arising out of the underlying
cooperative transaction. (Adopted 1/97)
4) Where two or more listing brokers claim entitlement to compensation pursuant to open listings with a seller or landlord who agrees to participate in arbitration (or who requests arbitration) and who agrees to be bound by the decision. In cases where one of the listing brokers has been compensated by the seller or landlord, the other listing broker, as complainant, may name the first listing broker as respondent and arbitration may proceed between the brokers. (Adopted 1/97)
The Code of Ethics was adopted in 1913.
Amended at the Annual Convention in 1924, 1928, 1950, 1951, 1952, 1955, 1956,
1961, 1962, 1974, 1982, 1986, 1987, 1989, 1990, 1991, 1992, 1993, 1994, 1995,
1996, 1997, 1998, 1999 and 2000.
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.
Contact the NATIONAL ASSOCIATION OF REALTORS®
on the internet at
http://www.onerealtorplace.com and
http://nar.realtor.com
Modifications to existing
Standards and additional new Standards may be approved or updated from time to
time. Readers are cautioned to ensure that the most recent publications are
utilized. Contact the NATIONAL
ASSOCIATION OF REALTORS® for the most
recent updated information. Consumers and the Media are welcome to visit the
public website to learn more about the NATIONAL ASSOCIATION OF REALTORS®