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Code of Ethics and Standards of Practice
of the NATIONAL ASSOCIATION OF REALTORS
®
Effective January 1, 2007
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 whether
conducted personally, through associates or others, or via
technological means, and to conduct their business in accordance
with the tenets set forth below. (Amended 1/07)
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
®,
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 imposed by the Code of Ethics encompass all real
estate-related activities and transactions whether conducted
in person, electronically, or through any other means.
The duties the Code of Ethics imposes are applicable whether
REALTORS®
are acting as agents or in legally recognized non-agency
capacities except that any duty imposed exclusively on
agents by law or regulation shall not be imposed by this
Code of Ethics on REALTORS®
acting in non-agency capacities.
As used in this Code of Ethics, “client” means the person(s)
or entity(ies) with whom a REALTOR®
or a REALTOR®’s
firm has an agency or legally recognized non-agency
relationship; “customer” means a party to a real estate
transaction who receives information, services, or benefits
but has no contractual relationship with the REALTOR®
or the REALTOR®’s
firm; “prospect” means a purchaser, seller, tenant, or
landlord who is not subject to a representation relationship
with the REALTOR®
or REALTOR®’s
firm; “agent” means a real estate licensee (including
brokers and sales associates) acting in an agency
relationship as defined by state law or regulation; and
“broker” means a real estate licensee (including brokers and
sales associates) acting as an agent or in a legally
recognized non-agency capacity. (Adopted 1/95, Amended 1/07)
Standard of Practice 1-3
®,
in attempting to secure a listing, shall not deliberately
mislead the owner as to market value.
Standard of Practice 1-4
®,
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
®
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
®
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
®
, 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
®
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
®
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
company policies regarding cooperation;
the amount of compensation to be paid by the client;
the potential for additional or offsetting
compensation from other brokers, from the seller or
landlord, or from other parties;
any potential for the buyer/tenant representative to
act as a disclosed dual agent, e.g. listing broker,
subagent, landlord’s agent, etc., and
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.
(Adopted 1/93, Renumbered 1/98, Amended 1/06)
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
®,
in response to inquiries from buyers or cooperating brokers
shall, with the sellers’ approval, disclose the existence of
offers on the property. Where disclosure is authorized,
REALTORS® shall also disclose whether offers were obtained
by the listing licensee, another licensee in the listing
firm, or by a cooperating broker. (Adopted 1/03, Amended
1/06))
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
®
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
®
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
®,
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
®
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
®,
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
®
shall disclose the existence of accepted offers, including
offers with unresolved contingencies, to any broker seeking
cooperation. (Adopted 5/86, Amended 1/04)
Standard of Practice 3-7
When seeking information from another REALTOR ®
concerning property under a management or listing agreement,
REALTORS®
shall disclose their REALTOR®
status and whether their interest is personal or on behalf
of a client and, if on behalf of a client, their
representational status. (Amended 1/95)
Standard of Practice 3-8
®
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
®
shall not recommend or suggest to a client or a customer the
use of services of another organization or business entity
in which they have a direct interest without disclosing such
interest at the time of the recommendation or suggestion.
(Amended 5/88)
Article 7
In a transaction, REALTORS®
shall not accept compensation from more than one party, even if
permitted by law, without disclosure to all parties and the
informed consent of the REALTOR®’s
client or clients. (Amended 1/93)
Article 8
REALTORS®
shall keep in a special account in an appropriate financial
institution, separated from their own funds, monies coming into
their possession in trust for other persons, such as escrows,
trust funds, clients’ monies, and other like items.
Article 9
REALTORS®,
for the protection of all parties, shall assure whenever
possible that all agreements related to real estate transactions
including, but not limited to, listing and representation
agreements, purchase contracts, and leases are in writing in
clear and understandable language expressing the specific terms,
conditions, obligations and commitments of the parties. A copy
of each agreement shall be furnished to each party to such
agreements upon their signing or initialing. (Amended 1/04)
Standard of Practice 9-1
For the protection of all parties, REALTORS ®
shall use reasonable care to ensure that documents
pertaining to the purchase, sale, or lease of real estate
are kept current through the use of written extensions or
amendments. (Amended 1/93)
Standard of Practice 9-2
When assisting or enabling a client or customer in
establishing a contractual relationship (e.g., listing and
representation agreements, purchase agreements, leases,
etc.) electronically, REALTORS ®
shall make reasonable efforts to explain the nature and
disclose the specific terms of the contractual relationship
being established prior to it being agreed to by a
contracting party. (Adopted 1/07)
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
When involved in the sale or lease of a residence, REALTORS ®
shall not volunteer information regarding the racial,
religious or ethnic composition of any neighborhood nor
shall they engage in any activity which may result in panic
selling, however, REALTORS®
may provide other demographic information. (Adopted 1/94,
Amended 1/06)
Standard of Practice 10-2
When not involved in the sale or lease of a residence,
REALTORS ®
may provide demographic information related to a property,
transaction or professional assignment to a party if such
demographic information is (a) deemed by the REALTOR®
to be needed to assist with or complete, in a manner
consistent with Article 10, a real estate transaction or
professional assignment and (b) is obtained or derived from
a recognized, reliable, independent, and impartial source.
The source of such information and any additions, deletions,
modifications, interpretations, or other changes shall be
disclosed in reasonable detail. (Adopted 1/05, Renumbered
1/06)
Standard of Practice 10-3
®
shall not print, display or circulate any statement or
advertisement with respect to 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, Renumbered 1/05 and 1/06)
Standard of Practice 10-4
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, Renumbered 1/05)
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
®
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
®
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
®
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
®
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
®
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
®
shall not advertise nor permit any person employed by or
affiliated with them to advertise listed property in any
medium (e.g., electronically, print, radio, television,
etc.) without disclosing the name of that REALTOR®'s
firm in a reasonable and readily apparent manner. (Adopted
11/86, Amended 1/07)
Standard of Practice 12-6
®,
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
®
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)
Standard of Practice 12-8
The obligation to present a true picture in representations
to the public includes information presented, provided, or
displayed on REALTORS ®’
websites. REALTORS®
shall use reasonable efforts to ensure that information on
their websites is current. When it becomes apparent that
information on a REALTOR®’s
website is no longer current or accurate, REALTORS®
shall promptly take corrective action. (Adopted 1/07)
Standard of Practice 12-9
®
firm websites shall disclose the firm’s name and state(s) of
licensure in a reasonable and readily apparent manner.
Websites of REALTORS®
and non-member licensees affiliated with a REALTOR®
firm shall disclose the firm’s name and that REALTOR®’s
or non-member licensee’s state(s) of licensure in a
reasonable and readily apparent manner. (Adopted 1/07)
Standard of Practice 12-10
®’
obligation to present a true picture in their advertising
and representations to the public includes the URLs and
domain names they use, and prohibits REALTORS®
from:
- engaging in deceptive or unauthorized
framing of real estate brokerage websites;
manipulating (e.g., presenting content
developed by others) listing content in any way that
produces a deceptive or misleading result; or
deceptively using metatags, keywords or
other devices/methods to direct, drive, or divert
Internet traffic, or to otherwise mislead consumers.
(Adopted 1/07)
Standard of Practice 12-11
®
intending to share or sell consumer information gathered via
the Internet shall disclose that possibility in a reasonable
and readily apparent manner. (Adopted 1/07)
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
®
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
®
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
®
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
®
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
®
shall not knowingly or recklessly file false or unfounded
ethics complaints. (Adopted 1/00)
Standard of Practice 15-2
The obligation to refrain from making false or misleading
statements about competitors’ businesses and competitors’
business practices includes the duty to not knowingly or
recklessly repeat, retransmit, or republish false or
misleading statements made by others. This duty applies
whether false or misleading statements are repeated in
person, in writing, by technological means (e.g., the
Internet), or by any other means. (Adopted 1/07)
Article 16
REALTORS®
shall not engage in any practice or take any action inconsistent
with exclusive representation or exclusive brokerage
relationship agreements that other REALTORS®
have with clients. (Amended 1/04)
Standard of Practice 16-1
Article 16 is not intended to prohibit aggressive or
innovative business practices which are otherwise ethical
and does not prohibit disagreements with other REALTORS ®
involving commission, fees, compensation or other forms of
payment or expenses. (Adopted 1/93, Amended 1/95)
Standard of Practice 16-2
Article 16 does not preclude REALTORS ®
from making general announcements to prospects describing
their services and the terms of their availability even
though some recipients may have entered into agency
agreements or other exclusive relationships with another
REALTOR®.
A general telephone canvass, general mailing or distribution
addressed to all prospects in a given geographical area or
in a given profession, business, club, or organization, or
other classification or group is deemed “general” for
purposes of this standard. (Amended 1/04)
Article 16 is intended to recognize as unethical two basic
types of solicitations:
First, telephone or personal solicitations of property
owners who have been identified by a real estate sign,
multiple listing compilation, or other information service
as having exclusively listed their property with another
REALTOR®;
and
Second, mail or other forms of written solicitations of
prospects whose properties are exclusively listed with
another REALTOR®
when such solicitations are not part of a general mailing
but are directed specifically to property owners identified
through compilations of current listings, “for sale” or “for
rent” signs, or other sources of information required by
Article 3 and Multiple Listing Service rules to be made
available to other REALTORS®
under offers of subagency or cooperation. (Amended 1/04)
Standard of Practice 16-3
Article 16 does not preclude REALTORS ®
from contacting the client of another broker for the purpose
of offering to provide, or entering into a contract to
provide, a different type of real estate service unrelated
to the type of service currently being provided (e.g.,
property management as opposed to brokerage) or from
offering the same type of service for property not subject
to other brokers’ exclusive agreements. However, information
received through a Multiple Listing Service or any other
offer of cooperation may not be used to target clients of
other REALTORS®
to whom such offers to provide services may be made.
(Amended 1/04)
Standard of Practice 16-4
®
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
®
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
®
are contacted by the client of another REALTOR®
regarding the creation of an exclusive relationship to
provide the same type of service, and REALTORS®
have not directly or indirectly initiated such discussions,
they may discuss the terms upon which they might enter into
a future agreement or, alternatively, may enter into an
agreement which becomes effective upon expiration of any
existing exclusive agreement. (Amended 1/98)
Standard of Practice 16-7
The fact that a prospect has retained a REALTOR® as an
exclusive representative or exclusive broker in one or more
past transactions does not preclude other REALTORS® from
seeking such prospect’s future business. (Amended 1/04)
Standard of Practice 16-8
The fact that an exclusive agreement has been entered into
with a REALTOR® shall not preclude or inhibit any other
REALTOR® from entering into a similar agreement after the
expiration of the prior agreement. (Amended 1/98)
Standard of Practice 16-9
REALTORS®, prior to entering into a representation
agreement, have an affirmative obligation to make reasonable
efforts to determine whether the prospect is subject to a
current, valid exclusive agreement to provide the same type
of real estate service. (Amended 1/04)
Standard of Practice 16-10
REALTORS®, acting as buyer or tenant representatives or
brokers, shall disclose that relationship to the
seller/landlord’s representative or broker at first contact
and shall provide written confirmation of that disclosure to
the seller/landlord’s representative or broker not later
than execution of a purchase agreement or lease. (Amended
1/04)
Standard of Practice 16-11
On unlisted property, REALTORS® acting as buyer/tenant
representatives or brokers shall disclose that relationship
to the seller/landlord at first contact for that
buyer/tenant and shall provide written confirmation of such
disclosure to the seller/landlord not later than execution
of any purchase or lease agreement. (Amended 1/04)
REALTORS® shall make any request for anticipated
compensation from the seller/ landlord at first contact.
(Amended 1/98)
Standard of Practice 16-12
REALTORS®, acting as representatives or brokers of
sellers/landlords or as subagents of listing brokers, shall
disclose that relationship to buyers/tenants as soon as
practicable and shall provide written confirmation of such
disclosure to buyers/tenants not later than execution of any
purchase or lease agreement. (Amended 1/04)
Standard of Practice 16-13
All dealings concerning property exclusively listed, or with
buyer/tenants who are subject to an exclusive agreement
shall be carried on with the client’s representative or
broker, and not with the client, except with the consent of
the client’s representative or broker or except where such
dealings are initiated by the client.
Before providing substantive services (such as writing a
purchase offer or presenting a CMA) to prospects, REALTORS®
shall ask prospects whether they are a party to any
exclusive representation agreement. REALTORS® shall not
knowingly provide substantive services concerning a
prospective transaction to prospects who are parties to
exclusive representation agreements, except with the consent
of the prospects’ exclusive representatives or at the
direction of prospects. (Adopted 1/93, Amended 1/04)
Standard of Practice 16-14
REALTORS® are free to enter into contractual relationships
or to negotiate with sellers/ landlords, buyers/tenants or
others who are not subject to an exclusive agreement but
shall not knowingly obligate them to pay more than one
commission except with their informed consent. (Amended
1/98)
Standard of Practice 16-15
In cooperative transactions REALTORS® shall compensate
cooperating REALTORS® (principal brokers) and shall not
compensate nor offer to compensate, directly or indirectly,
any of the sales licensees employed by or affiliated with
other REALTORS® without the prior express knowledge and
consent of the cooperating broker.
Standard of Practice 16-16
REALTORS®, acting as subagents or buyer/tenant
representatives or brokers, shall not use the terms of an
offer to purchase/lease to attempt to modify the listing
broker’s offer of compensation to subagents or buyer/tenant
representatives or brokers nor make the submission of an
executed offer to purchase/lease contingent on the listing
broker’s agreement to modify the offer of compensation.
(Amended 1/04)
Standard of Practice 16-17
®,
acting as subagents or as buyer/tenant representatives or
brokers, shall not attempt to extend a listing broker’s
offer of cooperation and/or compensation to other brokers
without the consent of the listing broker. (Amended 1/04)
Standard of Practice 16-18
®
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
®,
prior to or after terminating their relationship with their
current firm, shall not induce clients of their current firm
to cancel exclusive contractual agreements between the
client and that firm. This does not preclude REALTORS®
(principals) from establishing agreements with their
associated licensees governing assignability of exclusive
agreements. (Adopted 1/98)
Article 17
In the event of contractual disputes or specific non-contractual
disputes as defined in Standard of Practice 17-4 between
REALTORS®
(principals) associated with different firms, arising out of
their relationship as REALTORS®,
the REALTORS®
shall submit the dispute to arbitration in accordance with the
regulations of their Board or Boards rather than litigate the
matter.
In the event clients of REALTORS®
wish to arbitrate contractual disputes arising out of real
estate transactions, REALTORS®
shall arbitrate those disputes in accordance with the
regulations of their Board, provided the clients agree to be
bound by the decision.
The obligation to participate in arbitration contemplated by
this Article includes the obligation of REALTORS®
(principals) to cause their firms to arbitrate and be bound by
any award. (Amended 1/01)
Standard of Practice 17-1
The filing of litigation and refusal to withdraw from it by
REALTORS ®
in an arbitrable matter constitutes a refusal to arbitrate.
(Adopted 2/86)
Standard of Practice 17-2
Article 17 does not require REALTORS ®
to arbitrate in those circumstances when all parties to the
dispute advise the Board in writing that they choose not to
arbitrate before the Board. (Amended 1/93)
Standard of Practice 17-3
®,
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. When arbitration occurs between
two (or more) cooperating brokers and where the listing
broker is not a party, the amount in dispute and the
amount of any potential resulting award is limited to
the amount paid to the respondent by the listing broker
and any amount credited or paid to a party to the
transaction at the direction of the 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, Amended 1/07)
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. When arbitration occurs between two (or
more) cooperating brokers and where the listing broker
is not a party, the amount in dispute and the amount of
any potential resulting award is limited to the amount
paid to the respondent by the seller or landlord and any
amount credited or paid to a party to the transaction at
the direction of the 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, Amended 1/07)
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)
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, claims to be the
procuring cause of sale or lease. In such cases
arbitration shall be between the listing broker and the
buyer or tenant representative and the amount in dispute
is limited to the amount of the reduction of commission
to which the listing broker agreed. (Adopted 1/05)
Standard of Practice 17-5
The obligation to arbitrate established in Article 17
includes disputes between REALTORS ®
(principals) in different states in instances where, absent
an established inter–association arbitration agreement, the
REALTOR®
(principal) requesting arbitration agrees to submit to the
jurisdiction of, travel to, participate in, and be bound by
any resulting award rendered in arbitration conducted by the
respondent(s) REALTOR®’s
association, in instances where the respondent(s) REALTOR®’s
association determines that an arbitrable issue exists.
(Adopted 1/07)
The Code of Ethics was adopted in 1913. Amended at the Annual
Convention in 1924, 1928, 1950, 1951, 1952, 1955, 1956, 1961,
1962, 1974, 1982, 1986, 1987, 1989, 1990, 1991, 1992, 1993,
1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003,
2004, and 2005.
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.
Copyright 2007, National Association of REALTORS®, All rights
reserved. Form No. 166-288 (12/06) (rev 2/07)
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