|
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
REALTORS®, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics. (Amended 1/93)
Standard
of
Practice
1-2
The duties 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
REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.
Standard
of
Practice
1-4
REALTORS®, when seeking to become a buyer/tenant representative, shall not mislead buyers or tenants as to savings or other benefits that might be realized through use of the REALTOR®’s services. (Amended 1/93)
Standard
of
Practice
1-5
REALTORS® may represent the seller/landlord and buyer/tenant in the same transaction only after full disclosure to and with informed consent of both parties. (Adopted 1/93)
Standard
of
Practice
1-6
REALTORS® shall submit offers and counter-offers objectively and as quickly as possible. (Adopted 1/93, Amended 1/95)
Standard
of
Practice
1-7
When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. REALTORS® shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord. REALTORS® shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease. (Amended 1/93)
Standard
of
Practice
1-8
REALTORS® , acting as agents or brokers of buyers/tenants, shall submit to buyers/tenants all offers and counter-offers until acceptance but have no obligation to continue to show properties to their clients after an offer has been accepted unless otherwise agreed in writing. REALTORS®, acting as agents or brokers of buyers/tenants, shall recommend that buyers/tenants obtain the advice of legal counsel if there is a question as to whether a pre-existing contract has been terminated. (Adopted 1/93, Amended 1/99)
Standard
of
Practice
1-9
The obligation of REALTORS® to preserve confidential information (as defined by state law) provided by their clients in the course of any agency relationship or non-agency relationship recognized by law continues after termination of agency relationships or any non-agency relationships recognized by law. REALTORS® shall not knowingly, during or following the termination of professional relationships with their clients:
-
reveal confidential information of clients; or
use confidential information of clients to the disadvantage of clients; or
use confidential information of clients for the REALTOR®’s advantage or the advantage of third parties unless:
-
clients consent after full disclosure; or
REALTORS® are required by court order; or
it is the intention of a client to commit a crime and the information is necessary to prevent the crime; or
it is necessary to defend a REALTOR® or the REALTOR®’s employees or associates against an accusation of wrongful conduct.
Information concerning latent material defects is not considered confidential information under this Code of Ethics. (Adopted 1/93, Amended 1/01)
Standard
of
Practice
1-10
REALTORS® shall, consistent with the terms and conditions of their real estate licensure and their property management agreement, competently manage the property of clients with due regard for the rights, safety and health of tenants and others lawfully on the premises. (Adopted 1/95, Amended 1/00)
Standard
of
Practice
1-11
REALTORS® who are employed to maintain or manage a client’s property shall exercise due diligence and make reasonable efforts to protect it against reasonably foreseeable contingencies and losses. (Adopted 1/95)
Standard
of
Practice
1-12
When entering into listing contracts, REALTORS® must advise sellers/landlords of:
-
the REALTOR
®’s company policies regarding cooperation and the amount(s) of any compensation that will be offered to subagents, buyer/tenant agents, and/or brokers acting in legally recognized non-agency capacities;
the fact that buyer/tenant agents or brokers, even if compensated by listing brokers, or by sellers/landlords may represent the interests of buyers/tenants; and
any potential for listing brokers to act as disclosed dual agents, e.g. buyer/tenant agents. (Adopted 1/93, Renumbered 1/98, Amended 1/03)
Standard
of
Practice
1-13
When entering into buyer/tenant agreements, REALTORS® must advise potential clients of:
-
the REALTOR
®’s 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
REALTORS®, 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
REALTORS® shall only be obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority. Article 2 does not impose upon the REALTOR® the obligation of expertise in other professional or technical disciplines. (Amended 1/96)
Standard
of
Practice
2-2
(Renumbered as Standard of Practice 1-12 1/98)
Standard
of
Practice
2-3
(Renumbered as Standard of Practice 1-13 1/98)
Standard
of
Practice
2-4
REALTORS® shall not be parties to the naming of a false consideration in any document, unless it be the naming of an obviously nominal consideration.
Standard
of
Practice
2-5
Factors defined as “non-material” by law or regulation or which are expressly referenced in law or regulation as not being subject to disclosure are considered not “pertinent” for purposes of Article 2. (Adopted 1/93)
Article
3
REALTORS®
shall
cooperate
with
other
brokers
except
when
cooperation
is
not
in
the
client’s
best
interest.
The
obligation
to
cooperate
does
not
include
the
obligation
to
share
commissions,
fees,
or
to
otherwise
compensate
another
broker.
(Amended
1/95)
Standard
of
Practice
3-1
REALTORS®, acting as exclusive agents or brokers of sellers/ landlords, establish the terms and conditions of offers to cooperate. Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperation includes an offer of compensation. Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning efforts to accept the offer of cooperation. (Amended 1/99)
Standard
of
Practice
3-2
REALTORS® shall, with respect to offers of compensation to another REALTOR®, timely communicate any change of compensation for cooperative services to the other REALTOR® prior to the time such REALTOR® produces an offer to purchase/lease the property. (Amended 1/94)
Standard
of
Practice
3-3
Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation. (Adopted 1/94)
Standard
of
Practice
3-4
REALTORS®, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements (i.e., listings where one amount of commission is payable if the listing broker’s firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/ landlord or a cooperating broker). The listing broker shall, as soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their client before the client makes an offer to purchase or lease. (Amended 1/02)
Standard
of
Practice
3-5
It is the obligation of subagents to promptly disclose all pertinent facts to the principal’s agent prior to as well as after a purchase or lease agreement is executed. (Amended 1/93)
Standard
of
Practice
3-6
REALTORS® shall disclose the existence of 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
REALTORS® shall not misrepresent the availability of access to show or inspect a listed property. (Amended 11/87)
Article
4
REALTORS®
shall
not
acquire
an
interest
in
or
buy
or
present
offers
from
themselves,
any
member
of
their
immediate
families,
their
firms
or
any
member
thereof,
or
any
entities
in
which
they
have
any
ownership
interest,
any
real
property
without
making
their
true
position
known
to
the
owner
or
the
owner’s
agent
or
broker.
In
selling
property
they
own,
or
in
which
they
have
any
interest,
REALTORS®
shall
reveal
their
ownership
or
interest
in
writing
to
the
purchaser
or
the
purchaser’s
representative.
(Amended
1/00)
Standard
of
Practice
4-1
For the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract. (Adopted 2/86)
Article
5
REALTORS®
shall
not
undertake
to
provide
professional
services
concerning
a
property
or
its
value
where
they
have
a
present
or
contemplated
interest
unless
such
interest
is
specifically
disclosed
to
all
affected
parties.
Article
6
REALTORS®
shall
not
accept
any
commission,
rebate,
or
profit
on
expenditures
made
for
their
client,
without
the
client’s
knowledge
and
consent.
When
recommending
real
estate
products
or
services
(e.g.,
homeowner’s
insurance,
warranty
programs,
mortgage
financing,
title
insurance,
etc.),
REALTORS®
shall
disclose
to
the
client
or
customer
to
whom
the
recommendation
is
made
any
financial
benefits
or
fees,
other
than
real
estate
referral
fees,
the
REALTOR®
or
REALTOR®’s
firm
may
receive
as a
direct
result
of
such
recommendation.
(Amended
1/99)
Standard
of
Practice
6-1
REALTORS® shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion. (Amended 5/88)
Article
7
In a
transaction,
REALTORS®
shall
not
accept
compensation
from
more
than
one
party,
even
if
permitted
by
law,
without
disclosure
to
all
parties
and
the
informed
consent
of
the
REALTOR®’s
client
or
clients.
(Amended
1/93)
Article
8
REALTORS®
shall
keep
in a
special
account
in
an
appropriate
financial
institution,
separated
from
their
own
funds,
monies
coming
into
their
possession
in
trust
for
other
persons,
such
as
escrows,
trust
funds,
clients’
monies,
and
other
like
items.
Article
9
REALTORS®,
for
the
protection
of
all
parties,
shall
assure
whenever
possible
that
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
REALTORS® 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
When REALTORS® prepare opinions of real property value or price, other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, such opinions shall include the following:
-
identification of the subject property
|
