|
|
Code of Ethics and Standards
of Practice
of the NATIONAL ASSOCIATION OF REALTORS®
Effective January 1, 2007
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."
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:
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;
4)
any potential for the buyer/tenant representative to act as a
disclosed dual agent, e.g. listing broker, subagent, landlord's
agent, etc., and
5) 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 and 1/06)
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
|
