2004 Code of Ethics
and Standards of Practice
The 2004 Code of Ethics and Standards
of Practice of the National Association of REALTORS® is provided below.
Their web site is http://www.realtor.com/
Code of Ethics and Standards
of Practice
of the NATIONAL ASSOCIATION OFREALTORS®
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:
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 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;
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 1/03)
Standard of Practice 1-13
When entering into buyer/tenant agreements,
REALTORS® must advise potential clients of:
1) the REALTOR®'s company policies regarding
cooperation;
2) the amount of compensation to be paid by
the client;
3) the potential for additional or offsetting
compensation from other brokers, from the seller or landlord, or
from other parties; and
4) 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:
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, 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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