Code of Ethics and Standards of Practice of the National
Association of REALTORS®
The Code of Ethics is available in the following
languages:
Spanish
Korean
Chinese
Tagalog
Vietnamese
(Effective January 1, 2004)
Where the word REALTORS® is used in this Code and Preamble, it shall be
deemed to include REALTOR-ASSOCIATE®s.
While the Code of Ethics establishes obligations that may
be higher than those mandated by law, in any instance where the Code of
Ethics and the law conflict, the obligations of the law must take
precedence.
Preamble
Under all is the land. Upon its wise utilization and widely
allocated ownership depend the survival and growth of free institutions and
of our civilization. REALTORS® should recognize that the interests of the
nation and its citizens require the highest and best use of the land and
the widest distribution of land ownership. They require the creation of
adequate housing, the building of functioning cities, the development of
productive industries and farms, and the preservation of a healthful
environment.
Such interests impose obligations beyond those of ordinary
commerce. They impose grave social responsibility and a patriotic duty to
which REALTORS® should dedicate themselves, and for which they should be
diligent in preparing themselves. REALTORS®, therefore, are zealous to
maintain and improve the standards of their calling and share with their
fellow REALTORS® a common responsibility for its integrity and
honor.
In recognition and appreciation of their obligations to
clients, customers, the public, and each other, REALTORS® continuously
strive to become and remain informed on issues affecting real estate and,
as knowledgeable professionals, they willingly share the fruit of their
experience and study with others. They identify and take steps, through
enforcement of this Code of Ethics and by assisting appropriate regulatory
bodies, to eliminate practices which may damage the public or which might
discredit or bring dishonor to the real estate profession. REALTORS® having
direct personal knowledge of conduct that may violate the Code of Ethics
involving misappropriation of client or customer funds or property, willful
discrimination, or fraud resulting in substantial economic harm, bring such
matters to the attention of the appropriate Board or Association of
REALTORS®. (Amended 1/00)
Realizing that cooperation with other real estate
professionals promotes the best interests of those who utilize their
services, REALTORS® urge exclusive representation of clients; do not
attempt to gain any unfair advantage over their competitors; and they
refrain from making unsolicited comments about other practitioners. In
instances where their opinion is sought, or where REALTORS® believe that
comment is necessary, their opinion is offered in an objective,
professional manner, uninfluenced by any personal motivation or potential
advantage or gain.
The term REALTOR® has come to connote competency, fairness,
and high integrity resulting from adherence to a lofty ideal of moral
conduct in business relations. No inducement of profit and no instruction
from clients ever can justify departure from this ideal.
In the interpretation of this obligation, REALTORS® can
take no safer guide than that which has been handed down through the
centuries, embodied in the Golden Rule, "Whatsoever ye would that others
should do to you, do ye even so to them."
Accepting this standard as their own, REALTORS® pledge to
observe its spirit in all of their activities and to conduct their business
in accordance with the tenets set forth below.
Duties to Clients and Customers
Article 1
When representing a buyer, seller, landlord, tenant, or
other client as an agent, REALTORS® pledge themselves to protect and
promote the interests of their client. This obligation to the client is
primary, but it does not relieve REALTORS® of their obligation to treat all
parties honestly. When serving a buyer, seller, landlord, tenant or other
party in a non-agency capacity, REALTORS® remain obligated to treat all
parties honestly. (Amended 1/01)
REALTORS®, when acting as principals in a real estate
transaction, remain obligated by the duties imposed by the Code of Ethics.
(Amended 1/93)
The duties the Code of Ethics imposes are applicable
whether REALTORS® are acting as agents or in legally recognized non-agency
capacities except that any duty imposed exclusively on agents by law or
regulation shall not be imposed by this Code of Ethics on REALTORS® acting
in non-agency capacities.
As used in this Code of Ethics, "client" means the
person(s) or entity(ies) with whom a REALTOR® or a REALTOR®'s firm has an
agency or legally recognized non-agency relationship; "customer" means a
party to a real estate transaction who receives information, services, or
benefits but has no contractual relationship with the REALTOR® or the
REALTOR®'s firm; "prospect" means a purchaser, seller, tenant, or landlord
who is not subject to a representation relationship with the REALTOR® or
REALTOR®'s firm; "agent" means a real estate licensee (including brokers
and sales ASSOCIATEs) acting in an agency relationship as defined by state
law or regulation; and "broker" means a real estate licensee (including
brokers and sales Associates) acting as an agent or in a legally recognized
non-agency capacity. (Adopted 1/95, Amended 1/04)
REALTORS®, in attempting to secure a listing, shall not
deliberately mislead the owner as to market value.
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)
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)
REALTORS® shall submit offers and counter-offers
objectively and as quickly as possible. (Adopted 1/93, Amended 1/95)
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)
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)
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)
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)
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)
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)
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; 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
1/04)
Fees for preparing appraisals or other valuations shall not
be contingent upon the amount of the appraisal or valuation.
(Adopted 1/02)
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)
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)
(Renumbered as Standard of Practice 1-12 1/98)
(Renumbered as Standard of Practice 1-13 1/98)
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.
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)
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)
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 3-2 does not preclude the listing
broker and cooperating broker from entering into an agreement to change
cooperative compensation. (Adopted 1/94)
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)
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)
REALTORS® shall disclose the existence of accepted offers,
including offers with unresolved contingencies, to any broker seeking
cooperation. (Adopted 5/86, Amended 1/04)
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)
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)
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)
REALTORS® shall not recommend or suggest to a client or a
customer the use of services of another organization or business entity in
which they have a direct interest without disclosing such interest at the
time of the recommendation or suggestion. (Amended 5/88)
Article 7
In a transaction, REALTORS® shall not accept compensation
from more than one party, even if permitted by law, without disclosure to
all parties and the informed consent of the REALTOR®'s client or clients.
(Amended 1/93)
Article 8
REALTORS® shall keep in a special account in an appropriate
financial institution, separated from their own funds, monies coming into
their possession in trust for other persons, such as escrows, trust funds,
clients' monies, and other like items.
Article 9
REALTORS®, for the protection of all parties, shall assure
whenever possible that all agreements related to real estate transactions
including, but not limited to, listing and representation agreements,
purchase contracts, and leases are in writing in clear and understandable
language expressing the specific terms, conditions, obligations and
commitments of the parties. A copy of each agreement shall be furnished to
each party to such agreements upon their signing or initialing. (Amended
1/04)
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)
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)
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)
When REALTORS® prepare opinions of real property value or
price, other than in pursuit of a listing or to assist a potential
purchaser in formulating a purchase offer, such opinions shall include the
following:
1) identification of the subject property
2) date prepared
3) defined value or price
4) limiting conditions, including statements of purpose(s)
and intended user(s)
5) any present or contemplated interest, including the
possibility of representing the seller/landlord or
buyers/tenants
6) basis for the opinion, including applicable market
data
7) if the opinion is not an appraisal, a statement to that
effect (Amended 1/01)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
REALTORS® shall not knowingly or recklessly file false or
unfounded ethics complaints. (Adopted 1/00)
Article 16
REALTORS® shall not engage in any practice or take any
action inconsistent with exclusive representation or exclusive brokerage
relationship agreements that other REALTORS® have with clients. (Amended
1/04)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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.
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)
REALTORS®, acting as subagents or as buyer/tenant
representatives or brokers, shall not attempt to extend a listing broker's
offer of cooperation and/or compensation to other brokers without the
consent of the listing broker. (Amended 1/04)
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)
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)
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)
The filing of litigation and refusal to withdraw from it by
REALTORS® in an arbitrable matter constitutes a refusal to arbitrate.
(Adopted 2/86)
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)
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)
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, 2002 and 2003.
Explanatory Notes
The reader should be aware of the following policies which
have been approved by the Board of Directors of the National
Association:
In filing a charge of an alleged violation of the Code of
Ethics by a REALTOR®, the charge must read as an alleged violation of one
or more Articles of the Code. Standards of Practice may be cited in support
of the charge.
The Standards of Practice serve to clarify the ethical
obligations imposed by the various Articles and supplement, and do not
substitute for, the Case Interpretations in Interpretations of the Code of
Ethics.
Modifications to existing Standards of Practice and
additional new Standards of Practice are approved from time to time.
Readers are cautioned to ensure that the most recent publications are
utilized.
© 2004, NATIONAL ASSOCIATION OF REALTORS®, All Rights
Reserved
Form No. 166-288 (12/03)
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