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Duties to Clients and Customers
Duties to the Public
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Code of Ethics and Standards of Practice
of the National Association of REALTORS®
Effective January 1, 2003
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
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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:
- 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 general company policies regarding cooperation and
compensation; 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 1/99)
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
Standard of Practice 2-3
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 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
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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:
- identification of the subject property
- date prepared
- defined value or price
- limiting conditions, including statements of purpose(s) and intended
user(s)
- any present or contemplated interest, including the possibility of
representing the seller/landlord or buyers/tenants
- basis for the opinion, including applicable market data
- if the opinion is not an appraisal, a statement to that effect (Amended
1/01)
Standard of Practice 11-2
The obligations of the Code of Ethics in respect of real estate disciplines
other than appraisal shall be interpreted and applied in accordance with the
standards of competence and practice which clients and the public reasonably
require to protect their rights and interests considering the complexity of
the transaction, the availability of expert assistance, and, where the
REALTOR® is an agent or subagent, the obligations of a fiduciary. (Adopted
1/95)
Standard of Practice 11-3
When REALTORS® provide consultive services to clients which involve advice
or counsel for a fee (not a commission), such advice shall be rendered in an
objective manner and the fee shall not be contingent on the substance of the
advice or counsel given. If brokerage or transaction services are to be
provided in addition to consultive services, a separate compensation may be
paid with prior agreement between the client and REALTOR®. (Adopted 1/96)
Standard of Practice 11-4
The competency required by Article 11 relates to services contracted for
between REALTORS® and their clients or customers; the duties expressly imposed
by the Code of Ethics; and the duties imposed by law or regulation. (Adopted
1/02)
Article 12
REALTORS® shall be careful at all times to present a true picture in their
advertising and representations to the public. REALTORS® shall also ensure that
their professional status (e.g., broker, appraiser, property manager, etc.) or
status as REALTORS® is clearly identifiable in any such advertising. (Amended
1/93)
Standard of Practice 12-1
REALTORS® may use the term "free" and similar terms in their advertising
and in other representations provided that all terms governing availability of
the offered product or service are clearly disclosed at the same time.
(Amended 1/97)
Standard of Practice 12-2
REALTORS® may represent their services as "free" or without cost even if
they expect to receive compensation from a source other than their client
provided that the potential for the REALTOR® to obtain a benefit from a third
party is clearly disclosed at the same time. (Amended 1/97)
Standard of Practice 12-3
The offering of premiums, prizes, merchandise discounts or other
inducements to list, sell, purchase, or lease is not, in itself, unethical
even if receipt of the benefit is contingent on listing, selling, purchasing,
or leasing through the REALTOR® making the offer. However, REALTORS® must
exercise care and candor in any such advertising or other public or private
representations so that any party interested in receiving or otherwise
benefiting from the REALTOR®'s offer will have clear, thorough, advance
understanding of all the terms and conditions of the offer. The offering of
any inducements to do business is subject to the limitations and restrictions
of state law and the ethical obligations established by any applicable
Standard of Practice. (Amended 1/95)
Standard of Practice 12-4
REALTORS® shall not offer for sale/lease or advertise property without
authority. When acting as listing brokers or as subagents, REALTORS® shall not
quote a price different from that agreed upon with the seller/landlord.
(Amended 1/93)
Standard of Practice 12-5
REALTORS® shall not advertise nor permit any person employed by or
affiliated with them to advertise listed property without disclosing the name
of the firm. (Adopted 11/86)
Standard of Practice 12-6
REALTORS®, when advertising unlisted real property for sale/lease in which
they have an ownership interest, shall disclose their status as both
owners/landlords and as REALTORS® or real estate licensees. (Amended 1/93)
Standard of Practice 12-7
Only REALTORS® who participated in the transaction as the listing broker or
cooperating broker (selling broker) may claim to have "sold" the property.
Prior to closing, a cooperating broker may post a "sold" sign only with the
consent of the listing broker. (Amended 1/96)
Article 13
REALTORS® shall not engage in activities that constitute the unauthorized
practice of law and shall recommend that legal counsel be obtained when the
interest of any party to the transaction requires it.
Article 14
If charged with unethical practice or asked to present evidence or to cooperate
in any other way, in any professional standards proceeding or investigation,
REALTORS® shall place all pertinent facts before the proper tribunals of the
Member Board or affiliated institute, society, or council in which membership is
held and shall take no action to disrupt or obstruct such processes. (Amended
1/99)
Standard of Practice 14-1
REALTORS® shall not be subject to disciplinary proceedings in more than one
Board of REALTORS® or affiliated institute, society or council in which they
hold membership with respect to alleged violations of the Code of Ethics
relating to the same transaction or event. (Amended 1/95)
Standard of Practice 14-2
REALTORS® shall not make any unauthorized disclosure or dissemination of
the allegations, findings, or decision developed in connection with an ethics
hearing or appeal or in connection with an arbitration hearing or procedural
review. (Amended 1/92)
Standard of Practice 14-3
REALTORS® shall not obstruct the Board's investigative or professional
standards proceedings by instituting or threatening to institute actions for
libel, slander or defamation against any party to a professional standards
proceeding or their witnesses based on the filing of an arbitration request,
an ethics complaint, or testimony given before any tribunal. (Adopted 11/87,
Amended 1/99)
Standard of Practice 14-4
REALTORS® shall not intentionally impede the Board's investigative or
disciplinary proceedings by filing multiple ethics complaints based on the
same event or transaction. (Adopted 11/88)
Duties to REALTORS®
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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.
Before providing substantive services (such as writing a purchase offer or
presenting a CMA) to prospective purchasers, sellers, tenants or landlords
("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 1/03)
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 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
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 and
2002.
Explanatory Notes
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The reader should be aware of the following policies which have been approved by
the Board of Directors of the National Association:
In filing a charge of an alleged violation of the Code of Ethics by a REALTOR®,
the charge must read as an alleged violation of one or more Articles of the
Code. Standards of Practice may be cited in support of the charge.
The Standards of Practice serve to clarify the ethical obligations imposed by
the various Articles and supplement, and do not substitute for, the Case
Interpretations in Interpretations of the Code of Ethics.
Modifications to existing Standards of Practice and additional new Standards of
Practice are approved from time to time. Readers are cautioned to ensure that
the most recent publications are utilized.
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