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Code of Ethics and Standards of Practice
of the NATIONAL ASSOCIATION OF REALTORS
Effective January 1, 2005
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-ASSOCIATEs.
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
,
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; “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)
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; 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)
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, 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
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)
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
Except as provided in Standard of Practice 10-3,
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.
(Adopted 1/94, Amended 1/05)
Standard of Practice 10-2
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)
Standard of Practice 10-3
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)
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 without disclosing the name of
the firm. (Adopted 11/86)
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)
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)
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.
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)
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)
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 and
2004.
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 2004, National Association of REALTORS,
All rights reserved. Form No. 166-288 (12/04)
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