Code of Ethics and Standards of Practice
of the National Association of REALTORS�
Effective January 1, 2002
Preamble
Duties to Clients and Customers
(Articles 1-9)
Duties to the Public
(Articles 10-14)
Duties to REALTORS�
(Article 15-17)
Explanatory Notes
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)
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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)
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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;
"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 1/99)
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Standard of Practice 1-3
REALTORS�, in attempting to secure a listing, shall not deliberately
mislead the owner as to market value.
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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)
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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)
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Standard of Practice 1-6
REALTORS� shall submit offers and counter-offers objectively and as
quickly as possible. (Adopted 1/93, Amended 1/95)
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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)
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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)
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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)
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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)
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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)
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Standard of Practice 1-12
When entering into listing contracts, REALTORS� must advise
sellers/landlords of:
1) the REALTOR�'s general company policies regarding cooperation with and
compensation 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 1/99)
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Standard of Practice 1-13
When entering into buyer/tenant agreements, REALTORS� must advise
potential clients of:
1) the REALTOR�'s general company policies regarding cooperation and
compensation; and
2) 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 1/99)
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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)
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)
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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)
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Standard of Practice 2-2
(Renumbered as Standard of Practice 1-12 1/98)
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Standard of Practice 2-3
(Renumbered as Standard of Practice 1-13 1/98)
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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.
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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)
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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)
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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)
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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)
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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)
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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)
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Standard of Practice 3-6
REALTORS� shall disclose the existence of an accepted offer to any broker
seeking cooperation. (Adopted 5/86)
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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)
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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)
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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)
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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 agreements shall be in writing, and shall be 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 upon their signing or initialing. (Amended
1/95)
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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)
Preamble
Duties to Clients and Customers
(Articles 1-9)
Duties to the Public
(Articles 10-14)
Duties to REALTORS�
(Article 15-17)
Explanatory Notes |