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 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)
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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 the agency or other exclusive relationship recognized by law that
other REALTORS� have with clients. (Amended 1/98)
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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)
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Standard of Practice 16-2
Article 16 does not preclude REALTORS� from making general announcements
to prospective clients 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 prospective clients 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 1/98)
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 prospective
clients 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 1/93)
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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). 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 1/93)
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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)
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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)
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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)
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Standard of Practice 16-7
The fact that a client has retained a REALTOR� as an agent or in another
exclusive relationship in one or more past transactions does not preclude
other REALTORS� from seeking such former client's future business.
(Amended 1/98)
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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)
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Standard of Practice 16-9
REALTORS�, prior to entering into an agency agreement or other exclusive
relationship, have an affirmative obligation to make reasonable efforts to
determine whether the client is subject to a current, valid exclusive
agreement to provide the same type of real estate service. (Amended 1/98)
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Standard of Practice 16-10
REALTORS�, acting as agents of, or in another relationship with, buyers or
tenants, shall disclose that relationship to the seller/landlord's agent
or broker at first contact and shall provide written confirmation of that
disclosure to the seller/landlord's agent or broker not later than
execution of a purchase agreement or lease. (Amended 1/98)
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Standard of Practice 16-11
On unlisted property, REALTORS� acting as buyer/tenant agents or brokers
shall disclose that relationship to the seller/landlord at first contact
for that client and shall provide written confirmation of such disclosure
to the seller/landlord not later than execution of any purchase or lease
agreement.
REALTORS� shall make any request for anticipated compensation from the
seller/landlord at first contact. (Amended 1/98)
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Standard of Practice 16-12
REALTORS�, acting as agents 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 1/98)
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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 agent or broker, and not with the client, except with the consent
of the client's agent or broker or except where such dealings are
initiated by the client. (Adopted 1/93, Amended 1/98)
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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)
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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.
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Standard of Practice 16-16
REALTORS�, acting as subagents or buyer/tenant agents 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's agents 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 1/98)
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Standard of Practice 16-17
REALTORS� acting as subagents or as buyer/tenant agents 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 1/98)
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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)
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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)
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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)
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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)
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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)
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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)
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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)
Preamble
Duties to Clients and Customers
(Articles 1-9)
Duties to the Public
(Articles 10-14)
Duties to REALTORS�
(Article 15-17)
Explanatory Notes |