Code of Ethics & Standards of Practice
of the National Association of Realtors
Effective January 1, 1999
Where the word REALTORS® is used in this Code and Preamble, it shall be deemed to include
REALTOR-ASSOCIATE®. 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. 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 REALTORS® 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.
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 of absolute fidelity to the client's interests 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 1/93)
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; "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)
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. (Adopted 1/93, Amended
1/99)
Standard of Practice 1-10
REALTORS® shall, consistent with the terms and conditions of their property management
agreement, competently manage the property of clients with due regard for the rights,
responsibilities, benefits, safety and health of tenants and others lawfully on the
premises. (Adopted 1/95)
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 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)
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)
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 duties owed to their clients. (Amended 1/93)
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 3-2 does not preclude the listing
broker and cooperating broker from entering into an agreement to change cooperative
compensation. (Adopted 1/94)
Standard of Practice 3-3
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. (Amended 1/94)
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 an accepted offer to any broker seeking
cooperation. (Adopted 5/86)
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. 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 1/91)
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
esatate 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 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)
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)
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)
Standard of Practice 10-1
REALTORS® shall not volunteer information regarding the racial, religious or ethnic
composition of any neighborhood and shall not engage in any activity which may result in
panic selling. REALTORS® shall not print, display or circulate any statement or
advertisement with respect to the 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)
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
The obligations of the Code of Ethics shall be supplemented by and construed in a manner
consistent with the Uniform Standards of Professional Appraisal Practice (USPAP)
promulgated by the Appraisal Standards Board of the Appraisal Foundation. The obligations
of the Code of Ethics shall not be supplemented by the USPAP where an opinion or
recommendation of price or pricing is provided in pursuit of a listing, to assist a
potential purchaser in formulating a purchase offer, or to provide a broker's price
opinion, whether for a fee or not. (Amended 1/96)
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)
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)
Article 15 - REALTORS® shall not knowingly or recklessly make false or misleading
statements
about competitors, their businesses, or their business practices. (Amended 1/92)
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)
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 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)
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)
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 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)
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 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)
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)
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)
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)
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)
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 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)
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)
Standard of Practice 16-18
REALTORS® shall not use information obtained by them from the listing broker, through
offers to cooperate received through Multiple Listing Services or other sources authorized
by the listing broker, for the purpose of creating a referral prospect to a third broker,
or for creating a buyer/tenant prospect unless such use is authorized by the listing
broker. (Amended 1/93)
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® 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. (Amended 1/97)
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 broke 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) 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, and 1998.
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.
Copyright © NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. No portion may
be reproduced without the expressed consent of the NATIONAL ASSOCIATION OF REALTORS®.
How to contact us
Dennis Smith, ABR, SRES, e-PRO, CDPE, Realtor ® Lic #00476662
"Sunshine" Donna Smith SFR, Realtor ® Lic #01259837
Local 760-436-0087 Toll Free: 888-668-9053
RE/MAX BY-THE-SEA
1265 Carlsbad Village Dr. #100, Carlsbad, CA 92008
dennis@sandiegohomes4u.com
www.SanDiegoHomes4u.com
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