Code
of Ethics and Standards of Practice
of the NATIONAL ASSOCIATION OF REALTORS®
Effective
January 1, 2005
Where the word REALTORS® is used in this
Code and Preamble, it shall be deemed to include
REALTOR-ASSOCIATE®s.
While the Code of Ethics
establishes obligations that may be higher than
those mandated by law, in any instance where
the Code of Ethics and the law conflict, the
obligations of the law must take precedence.
Preamble
Under all is the land. Upon its wise utilization
and widely allocated ownership depend the survival
and growth of free institutions and of our civilization.
REALTORS® should recognize that the interests
of the nation and its citizens require the highest
and best use of the land and the widest distribution
of land ownership. They require the creation
of adequate housing, the building of functioning
cities, the development of productive industries
and farms, and the preservation of a healthful
environment.
Such interests impose obligations
beyond those of ordinary commerce. They impose
grave social responsibility and a patriotic
duty to which REALTORS® should dedicate
themselves, and for which they should be diligent
in preparing themselves. REALTORS®, therefore,
are zealous to maintain and improve the standards
of their calling and share with their fellow
REALTORS® a common responsibility for its
integrity and honor.
In recognition and appreciation
of their obligations to clients, customers,
the public, and each other, REALTORS® continuously
strive to become and remain informed on issues
affecting real estate and, as knowledgeable
professionals, they willingly share the fruit
of their experience and study with others. They
identify and take steps, through enforcement
of this Code of Ethics and by assisting appropriate
regulatory bodies, to eliminate practices which
may damage the public or which might discredit
or bring dishonor to the real estate profession.
REALTORS® having direct personal knowledge
of conduct that may violate the Code of Ethics
involving misappropriation of client or customer
funds or property, willful discrimination, or
fraud resulting in substantial economic harm,
bring such matters to the attention of the appropriate
Board or Association of REALTORS®. (Amended
1/00)
Realizing that cooperation
with other real estate professionals promotes
the best interests of those who utilize their
services, REALTORS® urge exclusive representation
of clients; do not attempt to gain any unfair
advantage over their competitors; and they refrain
from making unsolicited comments about other
practitioners. In instances where their opinion
is sought, or where REALTORS® believe that
comment is necessary, their opinion is offered
in an objective, professional manner, uninfluenced
by any personal motivation or potential advantage
or gain.
The term REALTOR® has
come to connote competency, fairness, and high
integrity resulting from adherence to a lofty
ideal of moral conduct in business relations.
No inducement of profit and no instruction from
clients ever can justify departure from this
ideal.
In the interpretation of
this obligation, REALTORS® can take no safer
guide than that which has been handed down through
the centuries, embodied in the Golden Rule,
“Whatsoever ye would that others should
do to you, do ye even so to them.”
Accepting this standard
as their own, REALTORS® pledge to observe
its spirit in all of their activities and to
conduct their business in accordance with the
tenets set forth below.
Duties to Clients and
Customers
Article
1
When representing a buyer, seller, landlord,
tenant, or other client as an agent, REALTORS®
pledge themselves to protect and promote the
interests of their client. This obligation to
the client is primary, but it does not relieve
REALTORS® of their obligation to treat all
parties honestly. When serving a buyer, seller,
landlord, tenant or other party in a non-agency
capacity, REALTORS® remain obligated to
treat all parties honestly. (Amended 1/01)
• Standard of Practice 1-1
REALTORS®, when acting as principals in
a real estate transaction, remain obligated
by the duties imposed by the Code of Ethics.
(Amended 1/93)
• Standard
of Practice 1-2
The duties the Code of Ethics imposes are applicable
whether REALTORS® are acting as agents or
in legally recognized non-agency capacities
except that any duty imposed exclusively on
agents by law or regulation shall not be imposed
by this Code of Ethics on REALTORS® acting
in non-agency capacities.
As used in this Code of Ethics, “client”
means the person(s) or entity(ies) with whom
a REALTOR® or a REALTOR®’s firm
has an agency or legally recognized non-agency
relationship; “customer” means a
party to a real estate transaction who receives
information, services, or benefits but has no
contractual relationship with the REALTOR®
or the REALTOR®’s firm; “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
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:
1) reveal confidential information
of clients; or
2) use confidential information
of clients to the disadvantage of clients; or
3) use confidential information
of clients for the REALTOR®’s advantage
or the advantage of third parties unless:
a) clients consent after full disclosure; or
b) REALTORS® are required by court order;
or
c) it is the intention of a client to commit
a crime and the information is necessary to
prevent the crime; or
d) 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:
1) 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;
2) 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
3) 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:
1) the REALTOR®’s
company policies regarding cooperation;
2) the amount of compensation
to be paid by the client;
3) the potential for additional
or offsetting compensation from other brokers,
from the seller or landlord, or from other parties;
and
4) 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
REALTORS®, in response to inquiries from
buyers or cooperating brokers shall, with the
sellers’ approval, divulge the existence
of offers on the property. (Adopted 1/03)
Article
2
REALTORS® shall avoid exaggeration, misrepresentation,
or concealment of pertinent facts relating to
the property or the transaction. REALTORS®
shall not, however, be obligated to discover
latent defects in the property, to advise on
matters outside the scope of their real estate
license, or to disclose facts which are confidential
under the scope of agency or non-agency relationships
as defined by state law. (Amended 1/00)
• Standard
of Practice 2-1
REALTORS® shall only be obligated to discover
and disclose adverse factors reasonably apparent
to someone with expertise in those areas required
by their real estate licensing authority. Article
2 does not impose upon the REALTOR® the
obligation of expertise in other professional
or technical disciplines. (Amended 1/96)
• Standard
of Practice 2-2
(Renumbered as Standard of Practice 1-12 1/98)
• Standard
of Practice 2-3
(Renumbered as Standard of Practice 1-13 1/98)
• Standard
of Practice 2-4
REALTORS® shall not be parties to the naming
of a false consideration in any document, unless
it be the naming of an obviously nominal consideration.
• Standard
of Practice 2-5
Factors defined as “non-material”
by law or regulation or which are expressly
referenced in law or regulation as not being
subject to disclosure are considered not “pertinent”
for purposes of Article 2. (Adopted 1/93)
Article
3
REALTORS® shall cooperate with other brokers
except when cooperation is not in the client’s
best interest. The obligation to cooperate does
not include the obligation to share commissions,
fees, or to otherwise compensate another broker.
(Amended 1/95)
• Standard
of Practice 3-1
REALTORS®, acting as exclusive agents or
brokers of sellers/ landlords, establish the
terms and conditions of offers to cooperate.
Unless expressly indicated in offers to cooperate,
cooperating brokers may not assume that the
offer of cooperation includes an offer of compensation.
Terms of compensation, if any, shall be ascertained
by cooperating brokers before beginning efforts
to accept the offer of cooperation. (Amended
1/99)
• Standard
of Practice 3-2
REALTORS® shall, with respect to offers
of compensation to another REALTOR®, timely
communicate any change of compensation for cooperative
services to the other REALTOR® prior to
the time such REALTOR® produces an offer
to purchase/lease the property. (Amended 1/94)
• Standard
of Practice 3-3
Standard of Practice 3-2 does not preclude the
listing broker and cooperating broker from entering
into an agreement to change cooperative compensation.
(Adopted 1/94)
• Standard
of Practice 3-4
REALTORS®, acting as listing brokers, have
an affirmative obligation to disclose the existence
of dual or variable rate commission arrangements
(i.e., listings where one amount of commission
is payable if the listing broker’s firm
is the procuring cause of sale/lease and a different
amount of commission is payable if the sale/lease
results through the efforts of the seller/ landlord
or a cooperating broker). The listing broker
shall, as soon as practical, disclose the existence
of such arrangements to potential cooperating
brokers and shall, in response to inquiries
from cooperating brokers, disclose the differential
that would result in a cooperative transaction
or in a sale/lease that results through the
efforts of the seller/landlord. If the cooperating
broker is a buyer/tenant representative, the
buyer/tenant representative must disclose such
information to their client before the client
makes an offer to purchase or lease. (Amended
1/02)
• Standard
of Practice 3-5
It is the obligation of subagents to promptly
disclose all pertinent facts to the principal’s
agent prior to as well as after a purchase or
lease agreement is executed. (Amended 1/93)
• Standard of Practice 3-6
REALTORS® shall disclose the existence of
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)
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
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)
• 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
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)
• Standard
of Practice 11-2
The obligations of the Code of Ethics in respect
of real estate disciplines other than appraisal
shall be interpreted and applied in accordance
with the standards of competence and practice
which clients and the public reasonably require
to protect their rights and interests considering
the complexity of the transaction, the availability
of expert assistance, and, where the REALTOR®
is an agent or subagent, the obligations of
a fiduciary. (Adopted 1/95)
• Standard
of Practice 11-3
When REALTORS® provide consultive services
to clients which involve advice or counsel for
a fee (not a commission), such advice shall
be rendered in an objective manner and the fee
shall not be contingent on the substance of
the advice or counsel given. If brokerage or
transaction services are to be provided in addition
to consultive services, a separate compensation
may be paid with prior agreement between the
client and REALTOR®. (Adopted 1/96)
• Standard
of Practice 11-4
The competency required by Article 11 relates
to services contracted for between REALTORS®
and their clients or customers; the duties expressly
imposed by the Code of Ethics; and the duties
imposed by law or regulation. (Adopted 1/02)
Article
12
REALTORS® shall be careful at all times
to present a true picture in their advertising
and representations to the public. REALTORS®
shall also ensure that their professional status
(e.g., broker, appraiser, property manager,
etc.) or status as REALTORS® is clearly
identifiable in any such advertising. (Amended
1/93)
• Standard
of Practice 12-1
REALTORS® may use the term “free”
and similar terms in their advertising and in
other representations provided that all terms
governing availability of the offered product
or service are clearly disclosed at the same
time. (Amended 1/97)
• Standard
of Practice 12-2
REALTORS® may represent their services as
“free” or without cost even if they
expect to receive compensation from a source
other than their client provided that the potential
for the REALTOR® to obtain a benefit from
a third party is clearly disclosed at the same
time. (Amended 1/97)
• Standard
of Practice 12-3
The offering of premiums, prizes, merchandise
discounts or other inducements to list, sell,
purchase, or lease is not, in itself, unethical
even if receipt of the benefit is contingent
on listing, selling, purchasing, or leasing
through the REALTOR® making the offer. However,
REALTORS® must exercise care and candor
in any such advertising or other public or private
representations so that any party interested
in receiving or otherwise benefiting from the
REALTOR®’s offer will have clear,
thorough, advance understanding of all the terms
and conditions of the offer. The offering of
any inducements to do business is subject to
the limitations and restrictions of state law
and the ethical obligations established by any
applicable Standard of Practice. (Amended 1/95)
• Standard
of Practice 12-4
REALTORS® shall not offer for sale/lease
or advertise property without authority. When
acting as listing brokers or as subagents, REALTORS®
shall not quote a price different from that
agreed upon with the seller/landlord. (Amended
1/93)
• Standard
of Practice 12-5
REALTORS® shall not advertise nor permit
any person employed by or affiliated with them
to advertise listed property without disclosing
the name of the firm. (Adopted 11/86)
• Standard
of Practice 12-6
REALTORS®, when advertising unlisted real
property for sale/lease in which they have an
ownership interest, shall disclose their status
as both owners/landlords and as REALTORS®
or real estate licensees. (Amended 1/93)
• Standard
of Practice 12-7
Only REALTORS® who participated in the transaction
as the listing broker or cooperating broker
(selling broker) may claim to have “sold”
the property. Prior to closing, a cooperating
broker may post a “sold” sign only
with the consent of the listing broker. (Amended
1/96)
Article
13
REALTORS® shall not engage in activities
that constitute the unauthorized practice of
law and shall recommend that legal counsel be
obtained when the interest of any party to the
transaction requires it.
Article
14
If charged with unethical practice or asked
to present evidence or to cooperate in any other
way, in any professional standards proceeding
or investigation, REALTORS® shall place
all pertinent facts before the proper tribunals
of the Member Board or affiliated institute,
society, or council in which membership is held
and shall take no action to disrupt or obstruct
such processes. (Amended 1/99)
• Standard
of Practice 14-1
REALTORS® shall not be subject to disciplinary
proceedings in more than one Board of REALTORS®
or affiliated institute, society or council
in which they hold membership with respect to
alleged violations of the Code of Ethics relating
to the same transaction or event. (Amended 1/95)
• Standard
of Practice 14-2
REALTORS® shall not make any unauthorized
disclosure or dissemination of the allegations,
findings, or decision developed in connection
with an ethics hearing or appeal or in connection
with an arbitration hearing or procedural review.
(Amended 1/92)
• Standard
of Practice 14-3
REALTORS® shall not obstruct the Board’s
investigative or professional standards proceedings
by instituting or threatening to institute actions
for libel, slander or defamation against any
party to a professional standards proceeding
or their witnesses based on the filing of an
arbitration request, an ethics complaint, or
testimony given before any tribunal. (Adopted
11/87, Amended 1/99)
• Standard of Practice 14-4
REALTORS® shall not intentionally impede
the Board’s investigative or disciplinary
proceedings by filing multiple ethics complaints
based on the same event or transaction. (Adopted
11/88)
Duties
to REALTORS®
Article
15
REALTORS® shall not knowingly or recklessly
make false or misleading statements about competitors,
their businesses, or their business practices.
(Amended 1/92)
• Standard
of Practice 15-1
REALTORS® shall not knowingly or recklessly
file false or unfounded ethics complaints. (Adopted
1/00)
Article
16
REALTORS® shall not engage in any practice
or take any action inconsistent with 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
REALTORS® shall not solicit a listing which
is currently listed exclusively with another
broker. However, if the listing broker, when
asked by the REALTOR®, refuses to disclose
the expiration date and nature of such listing;
i.e., an exclusive right to sell, an exclusive
agency, open listing, or other form of contractual
agreement between the listing broker and the
client, the REALTOR® may contact the owner
to secure such information and may discuss the
terms upon which the REALTOR® might take
a future listing or, alternatively, may take
a listing to become effective upon expiration
of any existing exclusive listing. (Amended
1/94)
• Standard
of Practice 16-5
REALTORS® shall not solicit buyer/tenant
agreements from buyers/ tenants who are subject
to exclusive buyer/tenant agreements. However,
if asked by a REALTOR®, the broker refuses
to disclose the expiration date of the exclusive
buyer/tenant agreement, the REALTOR® may
contact the buyer/tenant to secure such information
and may discuss the terms upon which the REALTOR®
might enter into a future buyer/tenant agreement
or, alternatively, may enter into a buyer/tenant
agreement to become effective upon the expiration
of any existing exclusive buyer/tenant agreement.
(Adopted 1/94, Amended 1/98)
• Standard
of Practice 16-6
When REALTORS® are contacted by the client
of another REALTOR® regarding the creation
of an exclusive relationship to provide the
same type of service, and REALTORS® have
not directly or indirectly initiated such discussions,
they may discuss the terms upon which they might
enter into a future agreement or, alternatively,
may enter into an agreement which becomes effective
upon expiration of any existing exclusive agreement.
(Amended 1/98)
• Standard of Practice 16-7
The fact that a 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
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)
• Standard
of Practice 16-18
REALTORS® shall not use information obtained
from listing brokers through offers to cooperate
made through multiple listing services or through
other offers of cooperation to refer listing
brokers’ clients to other brokers or to
create buyer/tenant relationships with listing
brokers’ clients, unless such use is authorized
by listing brokers. (Amended 1/02)
• Standard
of Practice 16-19
Signs giving notice of property for sale, rent,
lease, or exchange shall not be placed on property
without consent of the seller/landlord. (Amended
1/93)
• Standard
of Practice 16-20
REALTORS®, prior to or after terminating
their relationship with their current firm,
shall not induce clients of their current firm
to cancel exclusive contractual agreements between
the client and that firm. This does not preclude
REALTORS® (principals) from establishing
agreements with their associated licensees governing
assignability of exclusive agreements. (Adopted
1/98)
Article
17
In the event of contractual disputes or specific
non-contractual disputes as defined in Standard
of Practice 17-4 between REALTORS® (principals)
associated with different firms, arising out
of their relationship as REALTORS®, the
REALTORS® shall submit the dispute to arbitration
in accordance with the regulations of their
Board or Boards rather than litigate the matter.
In the event clients of
REALTORS® wish to arbitrate contractual
disputes arising out of real estate transactions,
REALTORS® shall arbitrate those disputes
in accordance with the regulations of their
Board, provided the clients agree to be bound
by the decision.
The obligation to participate
in arbitration contemplated by this Article
includes the obligation of REALTORS® (principals)
to cause their firms to arbitrate and be bound
by any award. (Amended 1/01)
• Standard of Practice 17-1
The filing of litigation and refusal to withdraw
from it by REALTORS® in an arbitrable matter
constitutes a refusal to arbitrate. (Adopted
2/86)
• Standard
of Practice 17-2
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
REALTORS®, when acting solely as principals
in a real estate transaction, are not obligated
to arbitrate disputes with other REALTORS®
absent a specific written agreement to the contrary.
(Adopted 1/96)
• Standard
of Practice 17-4
Specific non-contractual disputes that are subject
to arbitration pursuant to Article 17 are:
1) 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)
2) 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)
3) 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)
4) 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)
5) 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.
