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Article 1

When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge them-selves 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.

Article 1 establishes a balanced obligation to clients and customers. The Code of Ethics and Arbitration Manual, defines “agent,” “client,” and “customer” as:

Agent: a real estate licensee acting in an agency relationship as defined by state law or regulation;

Client: 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: 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.

By entering into a contractual agreement to act as agents, REALTORS® are both legally and ethically obligated to the client to use their best efforts to accomplish the client’s objective, be it the sale, purchase, or lease of real property, or managing, counseling, syndicating, or other real estate related service. REALTORS® must be completely faithful to the client they have committed to serve. At the same time, a REALTOR® must also be honest with all parties to the transaction. If a REALTOR® is the agent of a seller, the REALTOR® nonetheless must be honest with buyers and cooperating brokers. If the REALTOR® is the agent of a prospective purchaser, the REALTOR® must also be honest with sellers and their agents by making his/her relationship with the buyer clearly known to all. If a REALTOR® leases property as the agent of the owner or landlord, the REALTOR® must be honest with the lessee and any other brokers involved in the transaction. Even when a REALTOR® is not acting as an agent, the REALTOR® remains obligated to treat all parties honestly. This has particular significance to REALTORS® engaging in appraising, counseling, facilitating, and other activities when a principal-agent relationship is not involved.
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Remember that you are obligated under the Code of Ethics even when acting as a principal in a real estate transaction. (Refer to Standard of Practice 1-1)

Regardless of what capacity you are acting in  (e.g., facilitator, transaction broker, etc. . . .), you are obligated by the duties established in the Code of Ethics. This is true regardless of whether real estate-related activities and transactions are conducted in person, electronically, or otherwise. (Refer to Standard of Practice 1-2)

Be forthright and honest when advising prospective sellers about the value of their property. (Refer to Standard of Practice 1-3)

When seeking to become a buyer or tenant representative, do not mislead buyers or tenants as to savings or other benefits that might be realized by using your services. (Refer to Standard of Practice 1-4)

REALTORS® may be dual agents but only after full disclosure to and with consent of both parties. (Refer to Standard of Practice 1-5)

Transmit all offers and counter-offers objectively to the seller and landlord as quickly as possible for the owner’s decision regardless of who produced the offer. (Refer to Standards of Practice 1-6 and 1-7 and Case Interpretations #1-29 and #1-30)

Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide, as soon as practical, a written affirmation to the cooperating broker stating that the offer has been submitted to the seller/landlord, or a written notification that the seller/landlord has waived the obligation to have the offer presented. (Refer to Standard of Practice 1-7)

REALTORS® as agents or brokers of buyers and tenants are not obligated to continue to show properties to their clients after an offer has been accepted unless agreed otherwise in writing. Upon the written request of the listing broker who submits a counter-offer to the buyer's/tenant's broker, the buyer's/tenant's broker shall provide, as soon as practical, a written affirmation to the listing broker stating that the counter-offer has been submitted to the buyers/tenants, or a written notification that the buyers/tenants have waived the obligation to have the counter-offer presented. (Refer to Standard of Practice 1-8)

Remember that your obligation to preserve confidential information provided by your client continues after the termination of your agency relationship or non-agency relationship recognized by law. Latent material defects are not considered confidential. (Refer to Standard of Practice 1-9)

As a property manager, you must competently manage the property with regard for the rights, safety, and health of those lawfully on the premises. (Refer to Standard of Practice 1-10)

As a property manager, you must exercise due diligence and make reasonable efforts to protect the client’s property. (Refer to Standard of Practice 1-11)

When entering into listing contracts, you must advise sellers and landlords of 1) your company policy regarding cooperation and the amount(s) of any compensation, 2) that buyer and tenant agents or brokers may represent the interests of the buyer or tenant even if compensated by you or the seller or landlord, and 3) any potential for you to act as a disclosed dual agent. (Refer to Standard of Practice 1-12)

When entering into buyer/tenant agreements, you must advise potential clients of 1) your 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; 4) any potential for you to act as a disclosed dual agent, and 5) the possibility that sellers or sellers’ representatives may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties. (Refer to Standard of Practice 1-13)

When preparing appraisals or other valuations, do not make your fee contingent upon the amount of the approval or valuation. (Refer to Standard of Practice 1-14)

As a listing broker, disclose, with the seller’s approval, the existence of offers on the property in response to inquiries from buyers or cooperating brokers. When authorized, disclose whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker. (Refer to Standard of Practice 1-15 and Case Interpretation #1-28)

As a listing broker, do not access or use or permit others to access or use, listed or managed property except as authorized by the owner or seller. (Refer to Standard of Practice 1-16)

When acting as the seller’s agent, don’t suggest an offering price other than the listed price unless instructed by the seller to do so. (Refer to Case Interpretation #1-1)

Inform buyers of pertinent and relevant facts that may affect their decision to purchase. (Refer to Case Interpretation #1-2)

Avoid net listing agreements. They create an unavoidable conflict with the client’s best interests. (Refer to Case Interpretation #1-3)

As an agent, the best interests of your client must always come before any contemplated interest you or any member of your firm may have in the property. (Refer to Case Interpretations #1-4, #1-21, and #1-22)

If you are the listing broker or subagent, refrain from suggesting to a buyer that a property is overpriced without the seller’s authorization. (Refer to Case Interpretation #1-5)

Even when managing property, submit any offers to purchase received to the owner. (Refer to Case Interpretation #1-6)

Don’t leave property unsecured or available for unsupervised inspection, even if vacant, without the knowledge and consent of the seller. (Refer to Case Interpretation #1-7)

Promptly deposit checks received on behalf of clients or inform them of any reason for not doing so. (Refer to Case Interpretation #1-8)

When attempting to list a property, determine whether the property is already listed with another broker. Before taking a second, concurrent listing, advise the client of the potential liability for multiple commissions. (Refer to Case Interpretation #1-9)

Advise your client promptly if you become convinced the client’s property is overpriced. (Refer to Case Interpretation #1-10)

Remember that as an agent or subagent of the seller, you are required to submit all offers to the seller for the seller’s consideration even after an offer has already been accepted, unless prohibited by state law or unless the listing contract specifically relieves you of this responsibility. (Refer to Case Interpretations #1-12 and #1-13)

As a subagent, never condition writing a purchase contract on the buyer’s execution of a “pre-listing” agreement. (Refer to Case Interpretation #1-14)

Use your expertise as a real estate professional to advise your clients as to the market value of their homes, even where they claim to know what their properties are worth. (Refer to Case Interpretation #1-15)

Recommend that the client obtain an appraisal if you are unable to advise on the property’s market value, either because of your lack of experience or your limited knowledge of the area or of the type of property. (Refer to Case Interpretations #1-16 and #1-22)

Never misuse a prospective client’s personal opinion of the property’s value to obtain a listing. Base your recommendation for an asking price on a thorough inspection of the property and a systematic review of comparable sales in the area. (Refer to Case Interpretation #1-17)

Recommend that legal advice be sought when in the client’s best interest. (Refer to Case Interpretation #1-18)

Be aware of pending or enacted changes in the zoning ordinances that may affect the market value or use of property listed by you. (Refer to Case Interpretation #1-19)

REALTORS® remain bound by the obligations of the Code of Ethics even when dealing among themselves as principals. (Refer to Case Interpretation #1-20)

As an agent, the best interests of your client must always come before any contemplated interest you or any member of your firm may have in the property. (Refer to Case Interpretations #1-21 and #1-31)

Although a listing broker may offer to purchase property listed with him, a listing broker may not step out of his role as an agent and become a principal without the client’s knowledgeable consent. (Refer to Case Interpretation #1-22)

Do not “guarantee savings” unless you can demonstrate them in each and every instance. (Refer to Case Interpretation #1-23)

Do not deceive your client. (Refer to Case Interpretation #1-24)

Remember that latent material defects are not considered confidential under the Code. (Refer to Case Interpretation #1-25)

Your clients’ interests always take precedence over your personal gain or advantage. Don’t put your interest in a brokerage commission ahead of your responsibilities to your clients. (Refer to Case Interpretation #1-26)

Decline any appraisal assignment where your employment or your fee is contingent upon the amount of the appraisal. (Refer to Case Interpretation #1-27)

Do not manipulate comparables for your personal gain. (Refer to Case Interpretation #1-32)

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 or to advise on matters outside the scope of their real estate license or disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.

Article 2 guarantees faithful service to both clients and customers as consumers of real estate services.

Article 2 protects the consumer by ensuring that the REALTOR® provides accurate, factual information without exaggeration; that the REALTOR® communicates truthfully and does not misrepresent the facts; and that the REALTOR® does not remain silent concerning pertinent facts including adverse factors affecting the property. As a real estate professional, the REALTOR® is obligated to discover and disclose adverse factors apparent to someone with the REALTOR®’s level of expertise, but is not required to discover and disclose latent (hidden) defects in property or to advise clients or customers on matters requiring specialized knowledge and training not required by the state licensing authority or in the REALTOR®’s area of expertise. The REALTOR® is not expected to possess knowledge or skills generally attributable to specialists in other fields such as architects, structural engineers, soils experts, etc. Nor is the REALTOR® obligated to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law. The necessity to safeguard the confidence of clients must be respected unless there is some superseding ethical obligation or legal duty.
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Remember that you are obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in the real estate profession, but that you are not required to provide expert advice on matters involving specialized knowledge or training outside the scope of your real estate license. In such cases, advise your clients and customers to use the services of appropriate experts. (Refer to Standard of Practice 2-1)

Avoid naming a false consideration in any document unless it is an obviously nominal consideration. (Refer to Standard of Practice 2-4 and Case Interpretations #2-10 and #2-11)

Factors defined or expressly referenced in law or regulation as “non-material” or as not being subject to disclosure are not considered “pertinent” for purposes of Article 2. (Refer to Standard of Practice 2-5)

Be truthful and accurate concerning property for which you are responsible. If any inaccuracy occurs, act promptly to remedy the matter to the best of your ability. (Refer to Case Interpretation #2-1)

Remember that you are responsible for the statements and actions of those licensed with you. (Refer to Case Interpretation #2-2)

When acting as the listing broker, faithfully represent to prospective purchasers information provided by the sellers, unless you have reason to suspect that the information is not accurate. (Refer to Case Interpretations #2-3 and #2-4)

Be familiar with the requirements of law and regulations that may affect a purchaser’s use of property and suggest that the advice of experts be sought, if the situation warrants. (Refer to Case Interpretation #2-5)

Make no guarantees regarding the future value of property unless you are prepared to make good your guarantee. (Refer to Case Interpretation #2-6)

Remember that the public relies on your superior knowledge of the real estate market. Avoid “guesses” which may be misconstrued as facts by those relying on you. (Refer to Case Interpretation #2-7)

Failure to accurately disclose pertinent information cannot be excused by the use of a “disclaimer of accuracy.” (Refer to Case Interpretation #2-8)

REALTORS® remain bound by the obligations of the Code of Ethics even when dealing among themselves as principals. (Refer to Case Interpretation #2-13)

Promptly communicate any change in the amount of cooperating broker compensation being offered prior to the time the cooperating broker has a signed offer to purchase in hand. (Refer to Case Interpretation #2-14)

The obligation to “avoid misrepresentation or concealment of pertinent facts” also requires REALTORS® to provide tribunals of their Board with information on the activities of other REALTORS® which may have violated Article 2. (Refer to Case Interpretation #2-15)

Avoid falsifying credit information. (Refer to Case Interpretation #2-16)

Inform buyers of pertinent and relevant facts that may affect their decision to purchase. (Refer to Case Interpretation #2-18)

Be sure information in MLS compilations is truthful and accurate. (Refer to Case Interpretation #2-19)

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.

Article 3 obligates REALTORS® to cooperate with their competitors on mutually agreed upon terms when it is in the best interest of the client. This obligation promotes harmonious teamwork by competitors to the benefit of buyers/tenants and sellers/lessors. The real estate market is best served when individuals with a variety of skills and resources work together. Cooperation optimizes the benefits available to clients and customers, as well as agents and their subagents. Cooperation ensures sellers and lessors of the broadest possible market exposure. Through cooperation, brokers are able to enhance the market exposure of listed property and their ability to serve the needs of prospective purchasers and tenants.
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Compensation in cooperative transactions should be agreed upon by the listing and cooperating brokers prior to the time the cooperating broker begins efforts to accept the offer of cooperation. (Refer to Standard of Practice 3-1)

Avoid inviting cooperation by a third broker without the consent of the listing broker. (Refer to Case Interpretations #3-11 and #3-12)

Any change in the amount of compensation being offered must be communicated prior to the time the cooperating broker submits an offer to purchase or lease the property. After a REALTOR® has submitted an offer to purchase or lease property, the listing broker may not attempt to unilaterally modify the offered compensation with respect to that cooperative transaction. (Refer to Standard of Practice 3-2 and Case Interpretation #2-14)

Listing brokers and cooperating brokers may enter into an agreement to change the cooperative compensation after the cooperating broker produces an offer to purchase or lease the property if both REALTORS® agree to the change. (Refer to Standard of Practice 3-3)

As a listing broker, as soon as practical, disclose the existence of a dual or variable rate commission arrangement. As the buyer/tenant representative, disclose such information to your client before the client makes an offer to purchase or lease. (Refer to Standard of Practice 3-4)

Where a dual commission arrangement exists,  the REALTOR®, as listing broker, must disclose the existence of the “special arrangement,” and must indicate, in response to an inquiry from a potential cooperating broker, the differential that would result in the total commission in a cooperative transaction or in a sale that results through the efforts of the seller. (Refer to Standard of Practice 3-4 and Case Interpretations #1-30, #3-8 and #3-9)

As a subagent, immediately advise the listing broker of all pertinent facts you discover concerning a property or prospective purchaser either before or after a contract is executed. (Refer to Standard of Practice 3-5)

Disclose the existence of accepted offers, including offers with unresolved contingencies, to brokers seeking to cooperate on your listing. (Refer to Standard of Practice 3-6 and Case Interpretation #3-10)

Disclose your REALTOR® or licensed status when seeking information about a property from another REALTOR® concerning property under a management or listing agreement. (Refer to Standard of Practice 3-7)

Avoid misrepresenting the availability of property listed with your firm. (Refer to Standard of Practice 3-8)

Avoid providing access to listed property on terms other than those established by the owner or the seller. (Refer to Standard of Practice 3-9)

Share information on property you have listed/leased, and make property available to show when in the seller’s/lessor’s best interests. (Refer to Standard of Practice 3-10)

Cooperate with other brokers regardless of their race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender identity. (Refer to Standard of Practice 3-11)

Recognize the agency of listing brokers and make all arrangements to show property through them unless they grant you specific authority to deal directly with their clients. (Refer to Case Interpretation #3-1)

Cooperate in the sale of listed property unless you have valid reason for believing that cooperation would not further the best interests of your client or the client instructs you to withhold cooperation. Be prepared to justify your refusal to cooperate if you are charged with an arbitrary refusal to cooperate. (Refer to Case Interpretations #3-3 and #3-4)

Realize that under certain circumstances a REALTOR® may legitimately withhold cooperation when it is not in the client’s best interest or when the REALTOR® is dealing as a principal. (Refer to Case Interpretations #3-4 and #3-5)

Promptly communicate any change in the amount of cooperating broker compensation being offered prior to the time the cooperating broker has submitted an offer. (Refer to Case Interpretation #3-7)

Recognize that listing brokers must disclose the existence of dual and variable commission arrangements and must, in response to questions from cooperating brokers, disclose the compensation differential resulting from a cooperative transaction versus one brought about through the listing broker’s efforts. (Refer to Case Interpretation #3-8)

Recognize that “special” or “side” deals may be dual or variable commission arrangements that must be disclosed pursuant to Standard of Practice 3-4. (Refer to Case Interpretation #3-9)

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.

Article 4 prohibits the REALTOR® from buying, presenting offers, or selling property owned by the REALTOR®, or in which the REALTOR® has any interest, without making full disclosure of the ownership or interest to the buyer or seller or their agent or representative.

This prohibition applies not only to buying and selling by the REALTOR®, but also any member of the REALTOR®’s immediate family, firm, or any entity in which the REALTOR® has any ownership interest.

“Immediate family” includes “in-laws” because, at least in some instances, the transaction may benefit the REALTOR® in the future. A purchase or sale for the REALTOR®’s firm or any member thereof must be disclosed because it can be reasonably presumed that an individual will tend to favor the interests of business colleagues over the interests of strangers. Any entity in which the REALTOR® has any ownership interest is included to ensure that the buyer or seller or respective agents will be fully informed, in advance, of the REALTOR®’s position and interest in the transaction.

Article 4 protects the public by ensuring their full awareness of any direct or indirect personal interest of the REALTOR® in a real estate transaction involving property owned by the REALTOR® or property the REALTOR® is interested in acquiring. If the seller or buyer knows of the REALTOR®’s interest in a real estate transaction, in advance, they can make knowledgeable decisions, secure competent assistance, if necessary, and deal with the REALTOR® in an arm’s length transaction.
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Written disclosure of any present or contemplated interest, direct or indirect, that you have in a property must be given to buyers and sellers or their respective agents before entering into any contracts involving the property. (Refer to Standard of Practice 4-1 and Case Interpretation #4-6)

Be sure your client (seller) understands your position when you intend to acquire any interest in listed property. (Refer to Case Interpretation #4-1)

Even when the need to disclose a remote “indirect” interest is questionable, full disclosure is preferable since it avoids possible appearance of impropriety. (Refer to Case Interpretation #4-2)

Disclose in writing the fact that an offer is being presented on behalf of a family member, including in-laws. (Refer to Case Interpretation #4-3)

Be aware that REALTORS® have responsibility for ensuring that individuals licensed with the REALTOR® disclose the fact that an offer is being presented on behalf of a family member. (Refer to Case Interpretation #4-4)

As an agent, the best interests of your client must always come before any contemplated interest you may have in the property. (Refer to Case Interpretation #4-5)

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 5 protects the public by requiring REALTORS® to disclose any present or contemplated interest they may have in a property for which they are undertaking to provide professional services.

These services include buying, selling, leasing, appraising, managing, counseling, and other real estate related services.

Article 5 prevents REALTORS® from using their professional knowledge to gain an unfair advantage in a real estate transaction.

REALTORS® should remain aware that even indirect interests may obscure their objectivity and jeopardize the quality of their service. Such indirect interests could include interest in adjoining property, or could relate to transactions involving relatives or business associates. REALTORS® must be alert and utilize care in any real estate transaction that could be seen as benefiting them either directly or indirectly.
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When appraising a property disclose any current or contemplated interest you may have in the property to your client before accepting the assignment. (Refer to Case Interpretation #5-1)

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.

Article 6 protects clients and customers from conflicts of interest by the REALTOR® by requiring advance disclosure of the REALTOR®’s connection or interest in any organization or business entity before the REALTOR® recommends such services or products.

Many REALTORS® have interests in service firms, including contracting, roofing, brickwork, plumbing, electrical, air conditioning, title insurance, home owner’s insurance, pest control, moving, etc. The REALTOR® is not precluded from offering such services, and it should be noted that such services may be among the best available. But, to recommend such services without first disclosing the REALTOR®’s interest, making it clear that the clients and customers are free to obtain these services elsewhere, can raise suspicion and create the appearance of impropriety.

Article 6 also prevents the REALTOR® from benefiting directly or indirectly from the providers of such goods or services without the client’s prior knowledge and consent. Remember to disclose when you or your firm will receive any fee or will benefit directly from recommending a real estate service or product to a client or customer.
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Advise clients and customers about any direct or indirect interests you have in businesses or organizations to which you refer them. (Refer to Standard of Practice 6-1)

Don’t profit from your client’s expenditures without the client’s prior knowledge and consent. (Refer to Case Interpretation #6-1)

Be sure your client is aware of any use of the client’s property which may result in a benefit or profit to you. (Refer to Case Interpretation #6-2)

Exercise caution when dealing in matters that may be inconsistent with your client’s interests. Try to avoid potentially conflicting situations. (Refer to Case Interpretation #6-3)

Don’t accept rebates or other considerations from those providing goods or services to your client without your client’s prior knowledge and consent. (Refer to Case Interpretation #6-4)

When recommending real estate products and services, disclose affiliated business relationships and any potential benefit that may accrue to you. (Refer to Case Interpretations #6-5 and #6-6)

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.

Article 7 imposes an ethical obligation that may go beyond the requirements of state law. A REALTOR® may never accept compensation from more than one party without the informed consent of all parties. Only through adequate prior disclosure can the parties be fully aware of any potential conflicts of interest that may affect their ability or willingness to rely on the objectivity of the REALTOR®’s advice and counsel.
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Prior to representing both the buyer/tenant and the seller/landlord in the same transaction, you must disclose that fact to all parties and secure their agreement. (Refer to Case Interpretation #7-3)

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.

REALTORS®, as fiduciaries, are in positions of trust. They must keep monies coming into their possession in trust funds, separate from their own funds.

Stated simply, REALTORS® must not commingle their firm’s monies or their personal monies with money accepted in trust for others. Such money must be placed in a separate account to safeguard against its unauthorized use.
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Never commingle funds entrusted to you with your personal funds. (Refer to Case Interpretation #8-1)

Be aware that the Board may institute a complaint with the real estate commission based upon facts brought to light at an ethics hearing. (Refer to Case Interpretation #8-2)

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.

To avoid any misunderstanding and to prevent future controversy, all contractual agreements should be in writing and should set forth, in detail, the understanding of each of the parties. This can substantially reduce questions relating to the terms of the listing agreements, offers to purchase, financing instruments, and other agreements and commitments.
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Remember to use timely written extensions or amendments to purchase and sale contracts. (Refer to Standard of Practice 9-1)

Make reasonable efforts to explain to clients and customers the nature and specific terms of any contractual relationship being established electronically. (Refer to Standard of Practice 9-2)

Article 10

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender identity. 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, disability, familial status, national origin, sexual orientation, or gender identity.

REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender identity.

The law prohibits discrimination in housing on the basis of race, color, religion, sex, disability, familial status, or national origin.

Article 10 illustrates the REALTOR®’s commitment to fair housing. A charge alleging that a REALTOR® has violated a fair housing law may also form the basis of a charge alleging a violation of Article 10.

The REALTOR® can have nothing to do with any plan or agreement to discriminate on the basis of race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender identity with respect to any real estate transaction.

To ensure strict compliance with fair housing laws, Boards of REALTORS® are authorized to require training in fair housing as a condition of continued membership and REALTORS® are encouraged to establish ongoing equal opportunity educational training programs for individuals in their firms.

Article 10 also calls on REALTORS® to refrain from discrimination in selecting and retaining employees and independent contractors who provide real estate-related services, and the administrative and clerical staff who support them.
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When involved in the sale or lease of a residence, do not volunteer information on the racial, religious, or ethnic composition of any neighborhood and do not engage in any activity which may result in panic selling; however, you may provide other demographic information. (Refer to Standard of Practice 10-1)

When not involved in the sale or lease of a residence, you may provide demographic information related to a property, transaction, or professional assignment to a party if the demographic information is needed to assist with or complete, in a manner consistent with Article 10, a real estate transaction or professional assignment and is obtained or derived from a recognized, reliable, independent, and impartial source. Disclose in reasonable detail the source of the information and any additions, deletions, modifications, interpretations, or other changes. (Refer to Standard of Practice 10-2)

When selling or renting any property, do not convey any preference, limitations, or discrimination based on race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender identity. (Refer to Standard of Practice 10-3)

In all of your activities, remember REALTORS® must not use harassing speech, hate speech, epithets, or slurs based on race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender identity. (Refer to Standard of Practice 10-5) 

Offer equal professional services to every client and customer regardless of their race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. (Refer to Case Interpretations #10-1 and #10-3)

Educate those affiliated with you to ensure that they provide equal professional service to all. (Refer to Case Interpretation #10-2)

Ensure that advertising campaigns and other marketing strategies cannot be construed as expressing a preference that a potential buyer be of a specific racial or ethnic group. (Refer to Case Interpretations #10-4 and #10-5)

Hate speech and disparagement of individuals based on race reflects discrimination. (Refer to Case Interpretation #10-6)

REALTORS® are not precluded from engaging in political discussions and expressing political opinions, depending on context. (Refer to Case Interpretation #10-7)

Using harassing speech based on an individual's or group's sex is a violation of Article 10. (Refer to Case Interpretation #10-8)

REALTORS® should be mindful of Standard of Practice 10-5 when expressing ideas about religious doctrine. (Refer to Case Interpretations #10-9 and #10-10)

Remember Standards of Practice 10-3 and 10-5 when diplaying images and symbols that could reasonably be construed as showing a preference, limitation or discrimination in violation of Article 10. (Refer to Case Interpretation #10-11)

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, land 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 person engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth.

Article 11 is explicit in setting forth REALTORS®’ responsibilities to refrain from attempting to provide service for which they are inadequately prepared.

For example, if a REALTOR® as a residential broker with no commercial experience was asked to market a complex business property, the REALTOR® would be obligated to disclose to the client that the REALTOR® did not possess the experience and expertise to provide the requested service. In certain instances, a prospective client may value the general abilities and integrity of a particular REALTOR® and may insist on engaging that REALTOR®’s services despite the REALTOR®’s lack of experience and competency needed to undertake the assignment. In such a case, the REALTOR® may undertake the assignment if, having fully disclosed his lack of experience, the REALTOR® obtains assistance from someone competent in the field. The REALTOR® must fully inform the client as to whose assistance was utilized and the degree to which that person contributed to the assignment.
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When preparing an opinion of property value or price be knowledgeable about the type of property being valued, have access to necessary information and resources to formulate an accurate opinion, and be familiar with the area where the property is located (unless you disclose to the party requesting the opinion in advance of providing your opinion your lack of knowledge about the type of property, area it is located in, or information and resources necessary to formulate an accurate opinion). When an opinion of value or price is prepared other than in pursuit of a listing or to assist a purchaser in formulating an offer, make sure you identify the property; include the date prepared; include the defined value or price; provide limiting conditions, including statements of purpose(s) and intended user(s); disclose any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants; provide the basis for the opinion, including applicable market data; provide, if the opinion is not an appraisal, a statement to that effect; disclose whether and when a physical inspection of the property’s interior and exterior was conducted; and disclose whether you have any conflicts of interest. The only exception to this general rule is when a client or customer requests a different type of report or data set. (Refer to Standard of Practice 11-1)

In real estate disciplines other than appraisal, REALTORS® are expected to comply with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests. (Refer to Standard of Practice 11-2)

If you are providing consultive services to clients which involves advice or counsel for a fee (not a commission) be sure to provide any advice given in an objective manner and do not make the fee contingent on the substance of the information provided. A separate compensation may be paid with prior agreement between you and your client if you are providing brokerage or transaction services in addition to consultive services. (Refer to Standard of Practice 11-3)

Remember that the competency expected of you relates to services contracted for between you and your customer/client, the duties addressed by the Code of Ethics, and the duties imposed by law and regulation. (Refer to Standard of Practice 11-4)

Disclose your lack of experience to the client before accepting any appraisal assignment outside your area of competency. (Refer to Case Interpretations #11-1 and #11-4)

Identify in appraisal reports the names of any individuals or firms that provide assistance enabling you to prepare the report unless the information is general in nature. (Refer to Case Interpretations #11-2 and #11-3)

Don’t accept an appraisal assignment for which you are not qualified unless you disclose your lack of experience to the client and obtain qualified assistance. (Refer to Case Interpretation #11-5)

Consider all pertinent factors when making an appraisal. (Refer to Case Interpretation #11-6)

Remember that you must avoid conflicts of interest (e.g., listing and appraising the same property in a transaction) which might prevent you from acting as a disinterested third party rendering an unbiased appraisal, review, or consulting service. (Refer to Case Interpretation #11-10)

The fact that you have previously appraised real property does not preclude you from subsequently listing it if requested to do so by the seller. (Refer to Case Interpretation #11-11)

Article 12

REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.

In marketing properties, REALTORS® use advertising to inform the public about listings and to induce interest in them. REALTORS® are obligated to present a “true picture” in their advertising and in all representations to the public. A “true picture” is truthful, accurate advertising, and nothing less. Descriptions that go beyond “puffing” may mislead the public. Statistics indicating a REALTOR®’s sales volume and comparisons with other firms can be impressive, but if they are inaccurate, untrue, or misleading, their use injures the public and violates Article 12.

REALTORS® must always disclose their status as real estate professionals in their advertisements. This may be accomplished by including the terms “REALTOR®,” “REALTORS®,” or “REALTOR-ASSOCIATE®,” or by disclosing their status as a licensed broker, appraiser, property manager, or other real estate professional.

In advertising listed property, REALTORS® must also disclose the name of their firm so that the public will be aware that they are dealing with the property owner’s agent. Further, the REALTOR® must ensure that all brokers and salespeople affiliated with the firm include the firm’s name in their advertisements of listed properties.

When advertising unlisted property in which the REALTOR® has any ownership interest, the advertisement must disclose the interest and the existence of Board membership or real estate licensure.

REALTORS® must not represent that their brokerage services to a client or customer are free or available at no cost to their clients, unless the REALTOR® will receive no financial compensation from any source for those services. (Refer to Standard of Practice 12-1 and Case Interpretations #12-7 and #12-10)

If you offer incentives to list, sell, purchase, or lease property, be sure the terms and conditions of your offer are clear and readily understandable. (Refer to Standard of Practice 12-3)

Obtain the client’s permission to advertise the client’s property. Never advertise listed property at a price other than that agreed to by the client. (Refer to Standard of Practice 12-4)

All advertisements of real estate services or listed property must include the name of your firm. (Refer to Standard of Practice 12-5)

When acting as a principal in the sale or lease of your own property, disclose your status as a REALTOR® or as a licensee so that prospective purchasers or tenants will be aware of your special knowledge and expertise. (Refer to Standard of Practice 12-6 and Case Interpretation #12-8)

Only listing brokers or cooperating (selling) brokers have the right to advertise that they “sold” the property. Either the listing broker or the cooperating broker may claim to have “sold” the property upon acceptance of a purchase offer by the seller. However, prior to closing, a cooperating broker may only post a “sold” sign with the consent of the listing broker. (Refer to Standard of Practice 12-7 and Case Interpretations #12-11, #12-12, and #12-13)

Your obligation to present a true picture includes information presented on your website. (Refer to Standard of Practice 12-8)

Websites of REALTORS®, their firms, and all licensees affiliated with the firm must include the firm’s name and state of licensure and the licensee’s state of licensure in a reasonable and readily apparent manner. (Refer to Standard of Practice 12-9)

The duty to present a true picture in advertising and representations to the public includes content posted on the Internet, URLs and domain names. (Refer to Standard of Practice 12-10 and Case Interpretation #12-20)

If you intend to sell or share consumer information gathered via the Internet, disclose that possibility in a reasonable and readily apparent manner. (Refer to Standard of Practice 12-11)

Do not use URLs/domain names that present anything other than a true picture, or register URLs/domain names which, if used, would present less than a true picture. (Refer to Standard of Practice 12-12 and Case Interpretation #12-20)

It is not unethical to have previously registered a URL name which is the same as or similar to a name of a subsequently-established firm. (Refer to Standard of Practice 12-12 and Case Interpretation #12-21)

However, do not register URLs or domain names that are the same as or similar to competitors’ firms’ names and do not use intentionally misspelled domain names based on names of competitors’ firms. (Refer to Standard of Practice 12-12 and Case Interpretations #12-22 and #12-23)

It is not a violation of the Code of Ethics to register a domain name based on a sales associate’s name, with his or her consent, provided the URL presents a true picture. If the sales associate later leaves the firm, the former firm should not continue to use, and should not renew the domain name. (Refer to Standard of Practice 12-12 and Case Interpretation #12-24)

Use and display only the professional designations, certifications, and other credentials you are legitimately entitled to use. (Refer to Standard of Practice 12-13)

Remember that “For Sale” signs are a form of advertising subject to the requirements of Article 12. (Refer to Case Interpretation #12-1)

Avoid exaggeration and dishonesty in your advertisements. Strive to present a “true picture.” (Refer to Case Interpretations #12-2, #12-3, and #12-4)

Advertising claims should not be based upon uncertain or unpredictable factors over which you have little or no control. (Refer to Case Interpretation #12-4)

While a “sold” sign may be placed on a property when an offer to purchase has been accepted, it should be removed if the transaction falls through. (Refer to Case Interpretation #12-5)

Don’t mislead the public into believing they can save money by purchasing from you if that is not the case. (Refer to Case Interpretation #12-6)

Avoid false advertising. (Refer to Case Interpretation #12-9)

Remember to observe Article 12’s “true picture” mandate when advertising property as being “offered exclusively.” (Refer to Case Interpretation #12-14)

“Linking” to other Internet websites, even if those sites include listings of other real estate professionals, does not constitute advertising of the type contemplated by Article 12. (Refer to Case Interpretation #12-15)

You cannot copy information from the Internet websites of other real estate professionals and publish it on your website without the listing broker’s permission even if the information on your website identifies the listing broker. (Refer to Case Interpretation #12-16)

Article 12’s “true picture” assurance bars the use of misleading Internet domain names, including use of the names of competitors or their firms. (Refer to Case Interpretation #12-17)

Promptly remove information about expired listings from your website. (Refer to Case Interpretation #12-18)

If you affiliate with a new firm, remember to observe Article 12’s “true picture” when making representations about cumulative sold information. (Refer to Case Interpretations #12-25 and #12-26)

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.

The REALTOR® is prohibited by the law and by the Code from engaging in the unauthorized practice of law. The REALTOR® has an affirmative obligation to recommend the use of legal counsel to clients and customers when their interests require it.

If the REALTOR® is also an attorney, Article 13 would not preclude the offering of legal services in a manner consistent with the standards of the Bar Association. However, REALTORS® must be mindful of their agency relationship and the duties owed to clients and to customers, and must avoid all conflicts of interest.

Article 13 encourages respect for the law and protects clients and customers from well intended but potentially misguided “legal advice” from those unqualified to provide it.
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Refrain from any activities that could be construed as the unauthorized practice of law. (Refer to Case Interpretation #13-1)

Even when standard form contracts are utilized, questions concerning the meaning or effect of any provision should be addressed to competent legal counsel. (Refer to Case Interpretation #13-2)

Advise clients and customers to seek legal review of any contractual agreement where, in your judgment, the client or customer needs legal guidance. (Refer to Case Interpretation #13-3)

Avoid expressions of opinion which may be misconstrued as a definitive legal opinion. (Refer to Case Interpretation #13-3)

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, the REALTOR® shall place all pertinent facts before the proper tribunal 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.

The Code of Ethics is meaningful because it is respected and enforced. Article 14 establishes an absolute obligation to cooperate with the Board when charged with unethical practice, or when asked to present evidence in any professional standards proceeding or investigation. In either event the REALTOR® must place all pertinent facts before a proper tribunal.

REALTORS® are required to take an active part in Code enforcement. If this were not so, the Code would lose its relevance and influence in promoting and enforcing high standards of professional conduct.

Boards must provide due process in professional standards proceedings, as well as in enforcement of the Board’s bylaws, and other rules and regulations. Due process requires as much factual support as can be reasonably ascertained to substantiate violations of the Code or arbitration awards or failure to abide by other membership obligations. With fairness established in the Board’s procedures, and with the facts in hand, the Board can respect and protect the rights of all its members while strictly enforcing the Code.

If, in connection with a professional standards proceeding or an investigation, a REALTOR® is requested by the Board to answer a charge or to appear as a witness, the REALTOR® must do so, and must take no action to disrupt or obstruct such processes.
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A REALTOR® may not be subject to disciplinary proceedings before more than one Board, or affiliated institute, society, or council in which the REALTOR® holds membership, for alleged violations of the Code of Ethics relating to the same transaction. (Refer to Standard of Practice 14-1)*

Avoid unnecessary discussions of the details of any hearing, appeal, or review. (Refer to Standard of Practice 14-2)

A REALTOR® may not attempt to frustrate the Board’s disciplinary or investigative processes by filing or threatening to file suits against parties to the proceeding or their witnesses alleging slander, libel, or defamation based on the filing of an ethics complaint or an arbitration request. (Refer to Standard of Practice 14-3)

REALTORS® should not attempt to obstruct or disrupt the investigative or disciplinary proceedings of a Board by filing multiple ethics complaints based on the same transaction. (Refer to Standard of Practice 14-4)

Cooperate with those charged with enforcing the Code by providing requested information to any duly authorized tribunal in accordance with the Board’s procedures. (Refer to Case Interpretation #14-1)

Respond fully and accurately to questions from professional standards panel members. (Refer to Case Interpretation #14-2)

Remember that you may be required to respond to charges of unethical conduct, regardless of who is the complainant. (Refer to Case Interpretation #14-3)

* Also see Professional Standards Policy Statement 42, Previously dismissed ethics complaints/arbitration requests, Code of Ethics and Arbitration Manual.

Article 15

REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.

Article 15 logically flows from the REALTOR®’s duty established in Article 12 “to present a true picture in . . . representations.” This includes comparisons with competitors, and comments or opinions offered about other real estate professionals.

Article 15 is not intended to limit or inhibit the free flow of commercial information that is often of value to potential users of the many and varied services that REALTORS® provide. Article 15 requires that REALTORS® make good faith efforts to ensure that statements and representations they make, including those made in their advertising, are truthful and accurate.

REALTORS® should consider that while truthfulness is the ultimate measuring stick of Article 15, little is gained, and often much is lost, through negative, non-constructive criticism which can impair the cooperative efforts that make the service provided by REALTORS® so valuable to the public.
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Do not knowingly or recklessly file false or unfounded ethics complaints. (Refer to Standard of Practice 15-1)

Do not knowingly or recklessly publish, repeat, transmit, or republish false or misleading statements made by others in person, in writing, by technological means, or by any other means. (Refer to Standard of Practice 15-2)

Clarify or remove false or misleading statements made by third parties on electronic media you control once you know the statement is false or misleading. (Refer to Standard of Practice 15-3)

Good faith representations which are unknowingly inaccurate that are based on generally reliable information do not violate Article 15. (Refer to Case Interpretation #15-1)

Do not rely on normally reliable sources of information when information is obviously inaccurate. (Refer to Case Interpretation #15-1)

Do not misrepresent competitor's business practices. (Refer to Case Interpretations #15-2)

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.

Competition among brokers to provide appraising, brokerage, managing, leasing, syndicating, or counseling services is extremely intense until the prospective client enters into a binding agreement for such services. When an exclusive relationship is created, the competition shifts to the search for buyers or to otherwise fulfill the agreement. At this point Article 16 comes into play.

Once clients have selected a particular broker to serve their interests, the competition that prevailed earlier ceases and cooperation takes its place. Cooperation between REALTORS® is the normal professional practice that is contemplated when it is in the best interest of the client. Generally, cooperation exists in great measure, since it benefits the clients and customers in virtually every case. REALTORS® must carefully avoid taking any action inconsistent with the exclusive relationship between the seller and the listing broker and avoid any action that could be construed to induce a breach of the contractual agreement made with the client. The client has made a decision and is entitled to the benefit of his or her bargain. This includes relief for the duration of the relationship from direct overtures of other REALTORS® seeking to interest the seller or lessor in the services they provide. This limited protection from direct solicitation does not preclude general advertising efforts by other REALTORS®, but does prohibit efforts to induce the breach of an existing contract so that another REALTOR® can substitute himself in the place of the current listing broker.

In the case of an exclusive listing, to respect the exclusivity of the listing broker’s relationship, other REALTORS® must be able to determine with certainty that an exclusive listing exists. If the listing broker refuses to disclose the nature (type) and duration of a listing, Article 16 recognizes the REALTOR®’s right to contact the seller or lessor directly to obtain this essential information. Under these circumstances, the REALTOR® may also discuss the terms of a future listing on the property or may enter into a listing to become effective upon the expiration of the current listing.

Article 16 also acknowledges the right of property owners whose properties are listed exclusively to contact other REALTORS® if they are not satisfied with the listing broker’s performance. A REALTOR® is free to discuss the terms of a future listing on the property and may enter into a listing to become effective upon the expiration of the current listing if the discussion and contact were initiated by the property owners.

Actions inconsistent with the exclusive relationship of the listing broker can occur when a REALTOR® provides unauthorized information to a prospective purchaser or tenant. It can occur when a cooperating broker fails to obtain permission to show the property from the listing broker, but contacts the owner directly. It can occur when a cooperating broker takes an offer directly to the client without the knowledge and consent of the listing broker. It can occur when a cooperating broker uses the showing of a property as an opportunity to make unsolicited, derogatory remarks about the listing broker that are untrue.

REALTORS® are obligated to respect the exclusive representation or exclusive brokerage relationship agreements of other REALTORS® and to work through them as long as the exclusive relationship remains in effect. Professionalism, integrity, and courtesy require it and buyers/ tenants and sellers/lessors benefit from it.
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Aggressive, innovative marketing practices are not inherently unethical, but any business practice must comply with the other requirements imposed by the Code. (Refer to Standard of Practice 16-1)

Recognize that Article 16 does not prohibit general advertising, including telephone canvassing, mailings, or distributions to all property owners in a given area or to all members of a class, organization, or group, even though one or more of the recipients may currently be party to an exclusive listing agreement. (Refer to Standard of Practice 16-2 and Case Interpretations #16-3 and #16-9)

A REALTOR® is not prohibited from offering to provide unrelated services to the client of another REALTOR® or from offering the same type of service for property not subject to other brokers’ exclusive agreements. (Refer to Standard of Practice 16-3)

When another REALTOR® requests information from you concerning one of your listings, you are encouraged to disclose the type of listing you have and its expiration date so that the other REALTOR® can avoid an inadvertent interference in your relationship with your client. If, for any reason, you choose not to share that information, you should be aware that your refusal will entitle the other REALTOR® to obtain it directly from your client and to discuss the terms of a future listing with the client or to take a listing to become effective upon the expiration of any current listing. (Refer to Standard of Practice 16-4 and Case Interpretations #16-7 and #16-10)

When another REALTOR® requests information from you concerning one of your buyers/tenants who is subject to an exclusive buyer/tenant agreement, you are encouraged to disclose the type of agreement you have and its expiration date so that the other REALTOR® can avoid an inadvertent interference in your relationship with your client. If you choose not to share that information, you should be aware that your refusal will entitle the other REALTOR® to directly obtain the information from your client and discuss the terms of any future buyer/tenant agreement to become effective upon expiration of any existing exclusive buyer/tenant agreement. (Refer to Standard of Practice 16-5)

Recognize that if the discussion is initiated by the property owner, a REALTOR® may discuss taking a future listing on a property currently listed exclusively with another REALTOR® and may take a listing to become effective upon the expiration of the current listing. (Refer to Standard of Practice 16-6)

Be aware that a prospect’s prior selection and use of a REALTOR® in previous transactions cannot prevent other REALTORS® from trying to obtain that individual’s future business. (Refer to Standard of Practice 16-7)

Understand that once a listing has expired,  other REALTORS® are free to solicit the listing. (Refer to Standard of Practice 16-8 and Case Interpretation #16-5)

Before accepting a listing, use your best efforts to make sure the property is not already currently listed on an exclusive basis with another broker. Before working with a buyer, make an affirmative effort to ascertain whether that buyer is subject to an exclusive representation agreement. (Refer to Standard of Practice 16-9 and Case Interpretation #16-22)

If you are acting as the buyer or tenant representative or broker, you must disclose that fact to the listing broker the first time you contact the listing broker, such as when making an appointment to show the property. (Refer to Standard of Practice 16-10)

Advise the seller or landlord at your first contact if you are acting as a buyer’s or tenant’s representative or broker and the property is unlisted. (Refer to Standard Practice 16-11)

At the first practical opportunity, disclose to buyers/tenants that you are acting on behalf of the seller/landlord or subagent of the listing broker. (Refer to Standard of Practice 16-12)

When you are aware that a principal has retained an exclusive representative or broker, deal through that representative or broker, and not directly with the principal except when the representative or broker has authorized direct contact unless the client has initiated dealings with you. Ask prospects if they are party to an exclusive representation agreement before providing substantive services. (Refer to Standard of Practice 16-13 and Case Interpretations #16-13 and #16-14)

Before you exclusively list or lease a property which is not currently listed or leased with another broker on an exclusive basis, you have an obligation to advise the client of the potential liability for multiple commissions. (Refer to Standard of Practice 16-14)

Be aware of your obligation to compensate the cooperating broker (principal) in a cooperative transaction rather than any sales licensees affiliated with the cooperating broker without the prior express knowledge and consent of the cooperating broker. (Refer to Standard of Practice 16-15)

Do not use the terms of an offer to purchase or lease, or the threat of withholding an executed offer to purchase or lease, to attempt to obtain additional compensation from the listing broker. (Refer to Standard of Practice 16-16)

Obtain permission from the listing broker before giving information on the broker’s listings to another broker. (Refer to Standard of Practice 16-17)

Obtain the listing broker’s consent before using information about the listing broker’s listing to create a referral prospect or a buyer prospect. (Refer to Standard of Practice 16-18 and Case Interpretation #16-8)

Obtain the client’s consent before placing signs for sale, rent, or lease on property. (Refer to Standard of Practice 16-19)

Prior to or after your relationship with your current firm is terminated, do not induce clients of that firm to cancel exclusive contractual agreements between the client and that firm. (Refer to Standard of Practice 16-20)

While unintentional contact with another REALTOR®’s client is not unethical, subsequent contacts prior to the expiration of the other REALTOR®’s listing can be unethical. (Refer to Case Interpretation #16-2)

Be aware that general advertisements by other REALTORS® do not violate the exclusive relationship of the listing broker when not directed towards the owner of the particular property listed. (Refer to Case Interpretation #16-9)

Determine the amount of sub-agency compensation being offered before commencing your efforts as a subagent. Do not try to modify the amount offered by making the sub-agency compensation an integral term of an offer to purchase. (Refer to Case Interpretation #16-15)

When acting as the agent or broker of a buyer, do not suggest or recommend that the buyer use the terms of a purchase offer to attempt to modify the terms and conditions of the listing broker’s contract with the seller. (Refer to Case Interpretation #16-16)

As the buyer’s agent or broker, you can suggest or recommended that your client ask the seller to pay some or all of your commission. (Refer to Case Interpretation #16-17)

As a subagent, do not negotiate directly with the listing broker’s client unless you have been authorized to do so by the listing broker. (Refer to Case Interpretation #16-18)

Continued contact with a potential seller-client who then enters into an exclusive listing with another Realtor® is generally prohibited. (Refer to Standard of Practice 16-13 and Case Interpretations #16-19, #16-20, and #16-21).

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 mediate the dispute if the Board requires its members to mediate. If the dispute is not resolved through mediation, or if mediation is not required, REALTORS®  shall submit the dispute to arbitration in accordance with the policies of the Board rather than litigate the matter.

In the event clients of REALTORS® wish to mediate or arbitrate contractual disputes arising out of real estate transactions, REALTORS® shall mediate or arbitrate those disputes in accordance with the policies of the Board, provided the clients agree to be bound by any resulting agreement or award.

The obligation to participate in mediation and arbitration contemplated by this Article includes the obligation of REALTORS® (principals) to cause their firms to mediate and arbitrate and be bound by any resulting agreement or award.

Generally, arbitration is used to settle disputes between REALTOR® principals of two different real estate firms concerning entitlement to a commission or to cooperating brokers’ compensation. Entitlement is determined on the basis of determining the “procuring cause.” In most instances, the decision awards the disputed amount to one party or the other. In certain cases, and if not precluded by state law, the disputed amount may be divided between the parties if the arbitrators determine that both parties contributed, without interruption, to the successful transaction.

Article 17 also requires a REALTOR® to arbitrate disputes with clients, if the client requests the arbitration and agrees to be bound by the decision.

The Code of Ethics and Arbitration Manual advises Boards and State Associations to determine whether (1) state law authorizes prior agreements to arbitrate future disputes in advance of a dispute or only after the dispute occurs or (2) if state law does not recognize binding arbitration at all. In the latter case, Boards can only offer arbitration and cannot require REALTORS® and REALTOR-ASSOCIATE®s to participate in it.

The Code of Ethics and Arbitration Manual also specifies two circumstances under which REALTORS® must submit to arbitration.

  1. Arbitration of a dispute between REALTOR® principals of different firms. REALTOR® nonprincipals and REALTOR ASSOCIATE®s who are affiliated with either the complainant or the respondent and have a vested financial interest in the outcome have the right to be present throughout the proceedings and to participate but are not considered to be parties.
  2. Arbitration between REALTORS® principals and their clients when the client or REALTOR® invokes the arbitration and the client agrees to be bound by the decision.

The Manual also specifies three circumstances under which the REALTOR®’s participation in arbitration is voluntary:

  1. Arbitration between REALTOR® principals and REALTORS® and REALTOR-ASSOCIATE®s (non-principals) who are or were affiliated with the same firm, provided each party voluntarily agrees to the arbitration in writing. This applies to disputes arising when the parties are, or were, affiliated with the same firm, irrespective of the time the request is made for such arbitration.
  2. Arbitration between a REALTOR® principal with a nonmember broker, provided each party agrees in writing to be bound by the decision. However, it is the member’s choice whether the member will submit to arbitration with a nonmember broker who is not an MLS Participant. A nonmember broker who is not an MLS Participant may invoke the arbitration facilities of a Board of REALTORS®.  However, REALTORS® (principals) are not required to agree to or participate in arbitration.
  3. Arbitration between a REALTOR® principal and a customer if a written contractual relationship has been created by the REALTOR® principal between a customer and a client, and provided all parties to the dispute (i.e., the customer and the REALTOR®) agree in writing to arbitrate the dispute.

REALTORS® and REALTOR-ASSOCIATE®s who participate in the Board’s MLS or otherwise access MLS information through any Board in which they do not hold membership have the same rights and responsibilities as any Board member relative to the Code of Ethics.

For more detailed information on arbitration procedures, refer to the Code of Ethics and Arbitration Manual which includes Case Interpretations.
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Remember that Article 17 requires REALTORS® to arbitrate their disputes. If you file suit against a REALTOR® when a properly arbitrable matter exists and refuse to withdraw the suit and participate in arbitration when requested, you may be subject to disciplinary action. (Refer to Standard of Practice 17-1 and Case Interpretation #17-1)

Parties to an otherwise arbitrable matter may agree not to use the Board’s arbitration or mediation facility without becoming subject to a charge of violating Article 17 provided they advise the Board in writing of their decision. Also, REALTORS® cannot be required to mediate if all parties choose to arbitrate or litigate a dispute (Refer to Standard of Practice 17-2)

Under certain circumstances, REALTORS® are obligated to participate in interboard arbitration or in arbitration conducted by the State Association. (Refer to Case Interpretations #17-2 and #17-10)

Once a matter has been arbitrated by a Board of REALTORS®, neither party may initiate a second arbitration before a different Board based on the same issue. (Refer to Case Interpretation #17-3)

Have a clear understanding of your rights and obligations, related to arbitration, as established by Article 17 and your Board’s procedures. (Refer to Case Interpretations #17-4, #17-5, #17-6, and #17-11)

REALTORS® are free to bring alleged violations of law or regulations to the attention of appropriate enforcement bodies without fear of retaliation. (Refer to Case Interpretation #17-7)

REALTORS® cannot disclaim their personal obligations under Article 17 by asserting that the transaction was consummated through their corporation. (Refer to Case Interpretation #17-8)

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. (Refer to Standard of Practice 17-3 and Case Interpretations #17-12 and #17-13)

There are five specific non-contractual disputes that are subject to arbitration pursuant to Article 17. (Refer to Standard of Practice 17-4 and Case Interpretations #17-14, #17-15, and #17-16)

Remember you are bound to arbitrate even if the complainant is out of state if the complainant agrees to travel to your Board and submit to arbitration conducted by your Board. (Refer to Standard of Practice 17-5)

 

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