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WEBER NORTH DAVIS ASSOCIATION
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The VOICE
Code of Ethics and Standards of
Practice of the National Association of
REALTORS®
Effective January 1, 2003
Duties to Clients and Customers
Duties to the Public
Duties to REALTORS®
Where the word REALTORS® is used in this Code
and Preamble, it shall be deemed to include
REALTOR-ASSOCIATE®s.
While the Code of Ethics establishes obligations
that may be higher than those mandated by law,
in any instance where the Code of Ethics and the
law conflict, the obligations of the law must
take precedence.
Preamble
Under all is the land. Upon its wise utilization
and widely allocated ownership depend the
survival and growth of free institutions and of
our civilization. REALTORS® should recognize
that the interests of the nation and its
citizens require the highest and best use of the
land and the widest distribution of land
ownership. They require the creation of adequate
housing, the building of functioning cities, the
development of productive industries and farms,
and the preservation of a healthful environment.
Such interests impose obligations beyond those
of ordinary commerce. They impose grave social
responsibility and a patriotic duty to which
REALTORS® should dedicate themselves, and for
which they should be diligent in preparing
themselves. REALTORS®, therefore, are zealous to
maintain and improve the standards of their
calling and share with their fellow REALTORS® a
common responsibility for its integrity and
honor.
In recognition and appreciation of their
obligations to clients, customers, the public,
and each other, REALTORS® continuously strive to
become and remain informed on issues affecting
real estate and, as knowledgeable professionals,
they willingly share the fruit of their
experience and study with others. They identify
and take steps, through enforcement of this Code
of Ethics and by assisting appropriate
regulatory bodies, to eliminate practices which
may damage the public or which might discredit
or bring dishonor to the real estate profession.
REALTORS® having direct personal knowledge of
conduct that may violate the Code of Ethics
involving misappropriation of client or customer
funds or property, willful discrimination, or
fraud resulting in substantial economic harm,
bring such matters to the attention of the
appropriate Board or Association of REALTORS®.
(Amended 1/00)
Realizing that cooperation with other real
estate professionals promotes the best interests
of those who utilize their services, REALTORS®
urge exclusive representation of clients; do not
attempt to gain any unfair advantage over their
competitors; and they refrain from making
unsolicited comments about other practitioners.
In instances where their opinion is sought, or
where REALTORS® believe that comment is
necessary, their opinion is offered in an
objective, professional manner, uninfluenced by
any personal motivation or potential advantage
or gain.
The term REALTOR® has come to connote
competency, fairness, and high integrity
resulting from adherence to a lofty ideal of
moral conduct in business relations. No
inducement of profit and no instruction from
clients ever can justify departure from this
ideal.
In the interpretation of this obligation,
REALTORS® can take no safer guide than that
which has been handed down through the
centuries, embodied in the Golden Rule,
"Whatsoever ye would that others should do to
you, do ye even so to them."
Accepting this standard as their own, REALTORS®
pledge to observe its spirit in all of their
activities and to conduct their business in
accordance with the tenets set forth below.
Duties to Clients and Customers
Article 1
When representing a buyer, seller, landlord,
tenant, or other client as an agent, REALTORS®
pledge themselves to protect and promote the
interests of their client. This obligation to
the client is primary, but it does not relieve
REALTORS® of their obligation to treat all
parties honestly. When serving a buyer, seller,
landlord, tenant or other party in a non-agency
capacity, REALTORS® remain obligated to treat
all parties honestly. (Amended 1/01)
Standard of Practice 1-1
REALTORS®, when acting as principals in a real
estate transaction, remain obligated by the
duties imposed by the Code of Ethics. (Amended
1/93)
Standard of Practice 1-2
The duties the Code of Ethics imposes are
applicable whether REALTORS® are acting as
agents or in legally recognized non-agency
capacities except that any duty imposed
exclusively on agents by law or regulation shall
not be imposed by this Code of Ethics on
REALTORS® acting in non-agency capacities.
As used in this Code of Ethics, "client" means
the person(s) or entity(ies) with whom a
REALTOR® or a REALTOR®'s firm has an agency or
legally recognized non-agency relationship;
"customer" means a party to a real estate
transaction who receives information, services,
or benefits but has no contractual relationship
with the REALTOR® or the REALTOR®'s firm;
"agent" means a real estate licensee (including
brokers and sales ASSOCIATEs) acting in an
agency relationship as defined by state law or
regulation; and "broker" means a real estate
licensee (including brokers and sales ASSOCIATEs)
acting as an agent or in a legally recognized
non-agency capacity. (Adopted 1/95, Amended
1/99)
Standard of Practice 1-3
REALTORS®, in attempting to secure a listing,
shall not deliberately mislead the owner as to
market value.
Standard of Practice 1-4
REALTORS®, when seeking to become a buyer/tenant
representative, shall not mislead buyers or
tenants as to savings or other benefits that
might be realized through use of the REALTOR®'s
services. (Amended 1/93)
Standard of Practice 1-5
REALTORS® may represent the seller/landlord and
buyer/tenant in the same transaction only after
full disclosure to and with informed consent of
both parties. (Adopted 1/93)
Standard of Practice 1-6
REALTORS® shall submit offers and counter-offers
objectively and as quickly as possible. (Adopted
1/93, Amended 1/95)
Standard of Practice 1-7
When acting as listing brokers, REALTORS® shall
continue to submit to the seller/landlord all
offers and counter-offers until closing or
execution of a lease unless the seller/landlord
has waived this obligation in writing. REALTORS®
shall not be obligated to continue to market the
property after an offer has been accepted by the
seller/landlord. REALTORS® shall recommend that
sellers/landlords obtain the advice of legal
counsel prior to acceptance of a subsequent
offer except where the acceptance is contingent
on the termination of the pre-existing purchase
contract or lease. (Amended 1/93)
Standard of Practice 1-8
REALTORS® acting as agents or brokers of
buyers/tenants shall submit to buyers/tenants
all offers and counter-offers until acceptance
but have no obligation to continue to show
properties to their clients after an offer has
been accepted unless otherwise agreed in
writing. REALTORS® acting as agents or brokers
of buyers/ tenants shall recommend that
buyers/tenants obtain the advice of legal
counsel if there is a question as to whether a
pre-existing contract has been terminated.
(Adopted 1/93, Amended 1/99)
Standard of Practice 1-9
The obligation of REALTORS® to preserve
confidential information (as defined by state
law) provided by their clients in the course of
any agency relationship or non-agency
relationship recognized by law continues after
termination of agency relationships or any
non-agency relationships recognized by law.
REALTORS® shall not knowingly, during or
following the termination of professional
relationships with their clients:
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
(Renumbered as Standard of Practice 1-12 1/98)
Standard of Practice 2-3
(Renumbered as Standard of Practice 1-13 1/98)
Standard of Practice 2-4
REALTORS® shall not be parties to the naming of
a false consideration in any document, unless it
be the naming of an obviously nominal
consideration.
Standard of Practice 2-5
Factors defined as "non-material" by law or
regulation or which are expressly referenced in
law or regulation as not being subject to
disclosure are considered not "pertinent" for
purposes of Article 2. (Adopted 1/93)
Article 3
REALTORS® shall cooperate with other brokers
except when cooperation is not in the client's
best interest. The obligation to cooperate does
not include the obligation to share commissions,
fees, or to otherwise compensate another broker.
(Amended 1/95)
Standard of Practice 3-1
REALTORS®, acting as exclusive agents or brokers
of sellers/ landlords, establish the terms and
conditions of offers to cooperate. Unless
expressly indicated in offers to cooperate,
cooperating brokers may not assume that the
offer of cooperation includes an offer of
compensation. Terms of compensation, if any,
shall be ascertained by cooperating brokers
before beginning efforts to accept the offer of
cooperation. (Amended 1/99)
Standard of Practice 3-2
REALTORS® shall, with respect to offers of
compensation to another REALTOR®, timely
communicate any change of compensation for
cooperative services to the other REALTOR® prior
to the time such REALTOR® produces an offer to
purchase/lease the property.
(Amended 1/94)
Standard of Practice 3-3
Standard of Practice 3-2 does not preclude the
listing broker and cooperating broker from
entering into an agreement to change cooperative
compensation. (Adopted 1/94)
Standard of Practice 3-4
REALTORS®, acting as listing brokers, have an
affirmative obligation to disclose the existence
of dual or variable rate commission arrangements
(i.e., listings where one amount of commission
is payable if the listing broker's firm is the
procuring cause of sale/lease and a different
amount of commission is payable if the
sale/lease results through the efforts of the
seller/landlord or a cooperating broker). The
listing broker shall, as soon as practical,
disclose the existence of such arrangements to
potential cooperating brokers and shall, in
response to inquiries from cooperating brokers,
disclose the differential that would result in a
cooperative transaction or in a sale/lease that
results through the efforts of the
seller/landlord. If the cooperating broker is a
buyer/tenant representative, the buyer/tenant
representative must disclose such information to
their client before the client makes an offer to
purchase or lease. (Amended 1/02)
Standard of Practice 3-5
It is the obligation of subagents to promptly
disclose all pertinent facts to the principal's
agent prior to as well as after a purchase or
lease agreement is executed. (Amended 1/93)
Standard of Practice 3-6
REALTORS® shall disclose the existence of an
accepted offer to any broker seeking
cooperation. (Adopted 5/86)
Standard of Practice 3-7
When seeking information from another REALTOR®
concerning property under a management or
listing agreement, REALTORS® shall disclose
their REALTOR® status and whether their interest
is personal or on behalf of a client and, if on
behalf of a client, their representational
status. (Amended 1/95)
Standard of Practice 3-8
REALTORS® shall not misrepresent the
availability of access to show or inspect a
listed property. (Amended 11/87)
Article 4
REALTORS® shall not acquire an interest in or
buy or present offers from themselves, any
member of their immediate families, their firms
or any member thereof, or any entities in which
they have any ownership interest, any real
property without making their true position
known to the owner or the owner's agent or
broker. In selling property they own, or in
which they have any interest, REALTORS® shall
reveal their ownership or interest in writing to
the purchaser or the purchaser's representative.
(Amended 1/00)
Standard of Practice 4-1
For the protection of all parties, the
disclosures required by Article 4 shall be in
writing and provided by REALTORS® prior to the
signing of any contract. (Adopted 2/86)
Article 5
REALTORS® shall not undertake to provide
professional services concerning a property or
its value where they have a present or
contemplated interest unless such interest is
specifically disclosed to all affected parties.
Article 6
REALTORS® shall not accept any commission,
rebate, or profit on expenditures made for their
client, without the client's knowledge and
consent.
When recommending real estate products or
services (e.g., homeowner's insurance, warranty
programs, mortgage financing, title insurance,
etc.), REALTORS® shall disclose to the client or
customer to whom the recommendation is made any
financial benefits or fees, other than real
estate referral fees, the REALTOR® or REALTOR®'s
firm may receive as a direct result of such
recommendation. (Amended 1/99)
Standard of Practice 6-1
REALTORS® shall not recommend or suggest to a
client or a customer the use of services of
another organization or business entity in which
they have a direct interest without disclosing
such interest at the time of the recommendation
or suggestion. (Amended 5/88)
Article 7
In a transaction, REALTORS® shall not accept
compensation from more than one party, even if
permitted by law, without disclosure to all
parties and the informed consent of the
REALTOR®'s client or clients. (Amended 1/93)
Article 8
REALTORS® shall keep in a special account in an
appropriate financial institution, separated
from their own funds, monies coming into their
possession in trust for other persons, such as
escrows, trust funds, clients' monies, and other
like items.
Article 9
REALTORS®, for the protection of all parties,
shall assure whenever possible that agreements
shall be in writing, and shall be in clear and
understandable language expressing the specific
terms, conditions, obligations and commitments
of the parties. A copy of each agreement shall
be furnished to each party upon their signing or
initialing. (Amended 1/95)
Standard of Practice 9-1
For the protection of all parties, REALTORS®
shall use reasonable care to ensure that
documents pertaining to the purchase, sale, or
lease of real estate are kept current through
the use of written extensions or amendments.
(Amended 1/93)
Duties to the Public
Article 10
REALTORS® shall not deny equal professional
services to any person for reasons of race,
color, religion, sex, handicap, familial status,
or national origin. REALTORS® shall not be
parties to any plan or agreement to discriminate
against a person or persons on the basis of
race, color, religion, sex, handicap, familial
status, or national origin. (Amended 1/90)
REALTORS®, in their real estate employment
practices, shall not discriminate against any
person or persons on the basis of race, color,
religion, sex, handicap, familial status, or
national origin. (Amended 1/00)
Standard of Practice 10-1
REALTORS® shall not volunteer information
regarding the racial, religious or ethnic
composition of any neighborhood and shall not
engage in any activity which may result in panic
selling. REALTORS® shall not print, display or
circulate any statement or advertisement with
respect to the selling or renting of a property
that indicates any preference, limitations or
discrimination based on race, color, religion,
sex, handicap, familial status, or national
origin. (Adopted 1/94)
Standard of Practice 10-2
As used in Article 10 "real estate employment
practices" relates to employees and independent
contractors providing real-estate related
services and the administrative and clerical
staff directly supporting those individuals.
(Adopted 1/00)
Article 11
The services which REALTORS® provide to their
clients and customers shall conform to the
standards of practice and competence which are
reasonably expected in the specific real estate
disciplines in which they engage; specifically,
residential real estate brokerage, real property
management, commercial and industrial real
estate brokerage, real estate appraisal, real
estate counseling, real estate syndication, real
estate auction, and international real estate.
REALTORS® shall not undertake to provide
specialized professional services concerning a
type of property or service that is outside
their field of competence unless they engage the
assistance of one who is competent on such types
of property or service, or unless the facts are
fully disclosed to the client. Any persons
engaged to provide such assistance shall be so
identified to the client and their contribution
to the assignment should be set forth. (Amended
1/95)
Standard of Practice 11-1
When REALTORS® prepare opinions of real property
value or price, other than in pursuit of a
listing or to assist a potential purchaser in
formulating a purchase offer, such opinions
shall include the following:
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®
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
rticle 17 does not require REALTORS® to
arbitrate in those circumstances when all
parties to the dispute advise the Board in
writing that they choose not to arbitrate before
the Board. (Amended 1/93)
Standard of Practice 17-3
REALTORS®, when acting solely as principals in a
real estate transaction, are not obligated to
arbitrate disputes with other REALTORS® absent a
specific written agreement to the contrary.
(Adopted 1/96)
Standard of Practice 17-4
Specific non-contractual disputes that are
subject to arbitration pursuant to Article 17
are:
Where a listing broker has compensated a
cooperating broker and another cooperating
broker subsequently claims to be the procuring
cause of the sale or lease. In such cases the
complainant may name the first cooperating
broker as respondent and arbitration may proceed
without the listing broker being named as a
respondent. Alternatively, if the complaint is
brought against the listing broker, the listing
broker may name the first cooperating broker as
a third-party respondent. In either instance the
decision of the hearing panel as to procuring
cause shall be conclusive with respect to all
current or subsequent claims of the parties for
compensation arising out of the underlying
cooperative transaction. (Adopted 1/97)
Where a buyer or tenant representative is
compensated by the seller or landlord, and not
by the listing broker, and the listing broker,
as a result, reduces the commission owed by the
seller or landlord and, subsequent to such
actions, another cooperating broker claims to be
the procuring cause of sale or lease. In such
cases the complainant may name the first
cooperating broker as respondent and arbitration
may proceed without the listing broker being
named as a respondent. Alternatively, if the
complaint is brought against the listing broker,
the listing broker may name the first
cooperating broker as a third-party respondent.
In either instance the decision of the hearing
panel as to procuring cause shall be conclusive
with respect to all current or subsequent claims
of the parties for compensation arising out of
the underlying cooperative transaction. (Adopted
1/97)
Where a buyer or tenant representative is
compensated by the buyer or tenant and, as a
result, the listing broker reduces the
commission owed by the seller or landlord and,
subsequent to such actions, another cooperating
broker claims to be the procuring cause of sale
or lease. In such cases the complainant may name
the first cooperating broker as respondent and
arbitration may proceed without the listing
broker being named as a respondent.
Alternatively, if the complaint is brought
against the listing broker, the listing broker
may name the first cooperating broker as a
third-party respondent. In either instance the
decision of the hearing panel as to procuring
cause shall be conclusive with respect to all
current or subsequent claims of the parties for
compensation arising out of the underlying
cooperative transaction. (Adopted 1/97)
Where two or more listing brokers claim
entitlement to compensation pursuant to open
listings with a seller or landlord who agrees to
participate in arbitration (or who requests
arbitration) and who agrees to be bound by the
decision. In cases where one of the listing
brokers has been compensated by the seller or
landlord, the other listing broker, as
complainant, may name the first listing broker
as respondent and arbitration may proceed
between the brokers. (Adopted 1/97)
The Code of Ethics was adopted in 1913. Amended
at the Annual Convention in 1924, 1928, 1950,
1951, 1952, 1955, 1956, 1961, 1962, 1974, 1982,
1986, 1987, 1989, 1990, 1991, 1992, 1993, 1994,
1995, 1996, 1997, 1998, 1999, 2000, 2001 and
2002.
Explanatory Notes
The reader should be aware of the following
policies which have been approved by the Board
of Directors of the National Association:
In filing a charge of an alleged violation of
the Code of Ethics by a REALTOR®, the charge
must read as an alleged violation of one or more
Articles of the Code. Standards of Practice may
be cited in support of the charge.
The Standards of Practice serve to clarify the
ethical obligations imposed by the various
Articles and supplement, and do not substitute
for, the Case Interpretations in Interpretations
of the Code of Ethics.
Modifications to existing Standards of Practice
and additional new Standards of Practice are
approved from time to time. Readers are
cautioned to ensure that the most recent
publications are utilized.
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