HSAR - The Hunterdon Somerset Association of Realtors

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Code of Ethics and Standards of Practice
of the NATIONAL ASSOCIATION OF REALTORS ®

Effective January 1, 2008

Duties to Clients and Customers
Duties to the Public
Duties to REALTORS®

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 obligationsthat may be higher than those mandated by law, in any instance wherethe Code of Ethics and the law conflict, the obligations of the lawmust take precedence.

Preamble
Under all is the land. Upon its wise utilizationand widely allocated ownership depend the survival and growth of freeinstitutions and of our civilization. REALTORS®should recognize that the interests of the nation and its citizensrequire the highest and best use of the land and the widestdistribution of land ownership. They require the creation of adequatehousing, the building of functioning cities, the development ofproductive industries and farms, and the preservation of a healthfulenvironment.

Such interests impose obligations beyond those ofordinary commerce. They impose grave social responsibility and apatriotic 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 affectingreal estate and, as knowledgeable professionals, they willingly sharethe fruit of their experience and study with others. They identify andtake steps, through enforcement of this Code of Ethics and by assistingappropriate regulatory bodies, to eliminate practices which may damagethe public or which might discredit or bring dishonor to the realestate profession. REALTORS®having direct personal knowledge of conduct that may violate the Codeof Ethics involving misappropriation of client or customer funds orproperty, willful discrimination, or fraud resulting in substantialeconomic harm, bring such matters to the attention of the appropriateBoard or Association of REALTORS®. (Amended 1/00)

Realizing that cooperation with other real estateprofessionals promotes the best interests of those who utilize theirservices, REALTORS®urge exclusive representation of clients; do not attempt to gain anyunfair advantage over their competitors; and they refrain from makingunsolicited comments about other practitioners. In instances wheretheir opinion is sought, or where REALTORS®believe that comment is necessary, their opinion is offered in anobjective, professional manner, uninfluenced by any personal motivationor potential advantage or gain.

The term REALTOR®has come to connote competency, fairness, and high integrity resultingfrom adherence to a lofty ideal of moral conduct in business relations.No inducement of profit and no instruction from clients ever canjustify departure from this ideal.

In the interpretation of this obligation, REALTORS®can take no safer guide than that which has been handed down throughthe centuries, embodied in the Golden Rule, “Whatsoever ye would thatothers 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 whetherconducted personally, through associates or others, or viatechnological means, and to conduct their business in accordance withthe tenets set forth below. (Amended 1/07)


#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 relieveREALTORS®of their obligation to treat all parties honestly. When serving abuyer, seller, landlord, tenant or other party in a non-agencycapacity, 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, remainobligated by the duties imposed by the Code of Ethics. (Amended 1/93)

  • Standard of Practice 1-2

      • The duties imposedby the Code of Ethics encompass all real estate-related activities andtransactions whether conducted in person, electronically, or throughany other means.

      The duties the Code of Ethics imposes are applicable whether REALTORS®are acting as agents or in legally recognized non-agency capacitiesexcept that any duty imposed exclusively on agents by law or regulationshall 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®’sfirm has an agency or legally recognized non-agency relationship;“customer” means a party to a real estate transaction who receivesinformation, services, or benefits but has no contractual relationshipwith the REALTOR® or the REALTOR®’sfirm; “prospect” means a purchaser, seller, tenant, or landlord who isnot subject to a representation relationship with the REALTOR® or REALTOR®’sfirm; “agent” means a real estate licensee (including brokers and salesassociates) acting in an agency relationship as defined by state law orregulation; and “broker” means a real estate licensee (includingbrokers and sales associates) acting as an agent or in a legallyrecognized 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 misleadbuyers or tenants as to savings or other benefits that might berealized 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 sametransaction only after full disclosure to and with informed consent ofboth 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 andcounter-offers until closing or execution of a lease unless theseller/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 legalcounsel prior to acceptance of a subsequent offer except where theacceptance is contingent on the termination of the pre-existingpurchase contract or lease. (Amended 1/93)

  • Standard of Practice 1-8

      • REALTORS®, acting as agents or brokers of buyers/tenants, shall submit tobuyers/tenants all offers and counter-offers until acceptance but haveno obligation to continue to show properties to their clients after anoffer has been accepted unless otherwise agreed in writing. REALTORS®,acting as agents or brokers of buyers/tenants, shall recommend thatbuyers/tenants obtain the advice of legal counsel if there is aquestion 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) providedby their clients in the course of any agency relationship or non-agencyrelationship recognized by law continues after termination of agencyrelationships 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
        4. ®’s advantage or the advantage of third parties unless:

        1. clients consent after full disclosure; or

        2. REALTORS
          3. ® are required by court order; or
        3. it is the intention of a client to commit a crime and the information is necessary to prevent the crime; or

        4. it is necessary to defend a REALTOR
          5. ® or the REALTOR®’s employees or associates against an accusation of wrongful conduct.

      Information concerning latent material defects isnot 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 estatelicensure and their property management agreement, competently managethe property of clients with due regard for the rights, safety andhealth 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 shallexercise due diligence and make reasonable efforts to protect itagainst 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
        2. ®’scompany policies regarding cooperation and the amount(s) of anycompensation 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 mayrepresent the interests of buyers/tenants; and


      3. any potential for listing brokers to act asdisclosed 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
        2. ®’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/tenantrepresentative 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 ofoffers 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 preparingappraisals or other valuations shall not be contingent upon the amountof the appraisal or valuation. (Adopted 1/02)

  • Standard of Practice 1-15

      • REALTORS®,in response to inquiries from buyers or cooperating brokers shall, withthe sellers’ approval, disclose the existence of offers on theproperty. Where disclosure is authorized, REALTORS® shall also disclosewhether offers were obtained by the listing licensee, another licenseein the listing firm, or by a cooperating broker. (Adopted 1/03, Amended1/06))

    Article 2
    REALTORS®shall avoid exaggeration, misrepresentation, or concealment ofpertinent facts relating to the property or the transaction. REALTORS®shall not, however, be obligated to discover latent defects in theproperty, to advise on matters outside the scope of their real estatelicense, or to disclose facts which are confidential under the scope ofagency or non-agency relationships as defined by state law. (Amended1/00)

  • Standard of Practice 2-1

      • REALTORS®shall only be obligated to discover and disclose adverse factorsreasonably apparent to someone with expertise in those areas requiredby their real estate licensing authority. Article 2 does not imposeupon 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 anydocument, unless it be the naming of an obviously nominalconsideration.

  • Standard of Practice 2-5

      • Factors defined as“non-material” by law or regulation or which are expressly referencedin law or regulation as not being subject to disclosure are considerednot “pertinent” for purposes of Article 2. (Adopted 1/93)

    Article 3
    REALTORS®shall cooperate with other brokers except when cooperation is not inthe client’s best interest. The obligation to cooperate does notinclude the obligation to share commissions, fees, or to otherwisecompensate another broker. (Amended 1/95)

  • Standard of Practice 3-1

      • REALTORS®,acting as exclusive agents or brokers of sellers/ landlords, establishthe terms and conditions of offers to cooperate. Unless expresslyindicated in offers to cooperate, cooperating brokers may not assumethat the offer of cooperation includes an offer of compensation. Termsof compensation, if any, shall be ascertained by cooperating brokersbefore beginning efforts to accept the offer of cooperation. (Amended1/99)

  • 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 ofPractice 3-2 does not preclude the listing broker and cooperatingbroker from entering into an agreement to change cooperativecompensation. (Adopted 1/94)

  • Standard of Practice 3-4

      • REALTORS®,acting as listing brokers, have an affirmative obligation to disclosethe existence of dual or variable rate commission arrangements (i.e.,listings where one amount of commission is payable if the listingbroker’s firm is the procuring cause of sale/lease and a differentamount of commission is payable if the sale/lease results through theefforts of the seller/ landlord or a cooperating broker). The listingbroker shall, as soon as practical, disclose the existence of sucharrangements to potential cooperating brokers and shall, in response toinquiries from cooperating brokers, disclose the differential thatwould result in a cooperative transaction or in a sale/lease thatresults through the efforts of the seller/landlord. If the cooperatingbroker is a buyer/tenant representative, the buyer/tenantrepresentative must disclose such information to their client beforethe client makes an offer to purchase or lease. (Amended 1/02)

  • Standard of Practice 3-5

      • It is theobligation of subagents to promptly disclose all pertinent facts to theprincipal’s agent prior to as well as after a purchase or leaseagreement is executed. (Amended 1/93)

  • Standard of Practice 3-6

      • REALTORS®shall disclose the existence of accepted offers, including offers withunresolved contingencies, to any broker seeking cooperation. (Adopted5/86, 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 clientand, if on behalf of a client, their representational status. (Amended1/95)

  • 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 fromthemselves, any member of their immediate families, their firms or anymember thereof, or any entities in which they have any ownershipinterest, any real property without making their true position known tothe 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 aproperty or its value where they have a present or contemplatedinterest unless such interest is specifically disclosed to all affectedparties.

    Article 6
    REALTORS®shall not accept any commission, rebate, or profit on expenditures madefor 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 ismade any financial benefits or fees, other than real estate referralfees, 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 ofservices of another organization or business entity in which they havea direct interest without disclosing such interest at the time of therecommendation or suggestion. (Amended 5/88)

    Article 7
    In a transaction, REALTORS®shall not accept compensation from more than one party, even ifpermitted by law, without disclosure to all parties and the informedconsent of the REALTOR®’s client or clients. (Amended 1/93)

    Article 8
    REALTORS®shall keep in a special account in an appropriate financialinstitution, separated from their own funds, monies coming into theirpossession 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 thatall agreements related to real estate transactions including, but notlimited to, listing and representation agreements, purchase contracts,and leases are in writing in clear and understandable languageexpressing the specific terms, conditions, obligations and commitmentsof the parties. A copy of each agreement shall be furnished to eachparty to such agreements upon their signing or initialing. (Amended1/04)

  • Standard of Practice 9-1

      • For the protection of all parties, REALTORS®shall use reasonable care to ensure that documents pertaining to thepurchase, sale, or lease of real estate are kept current through theuse of written extensions or amendments. (Amended 1/93)

  • Standard of Practice 9-2

      • When assisting orenabling a client or customer in establishing a contractualrelationship (e.g., listing and representation agreements, purchaseagreements, leases, etc.) electronically, REALTORS® shallmake reasonable efforts to explain the nature and disclose the specificterms of the contractual relationship being established prior to itbeing 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 ofrace, color, religion, sex, handicap, familial status, or nationalorigin. REALTORS®shall not be parties to any plan or agreement to discriminate against aperson 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 discriminateagainst 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 orethnic composition of any neighborhood nor shall they engage in anyactivity 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, transactionor professional assignment to a party if such demographic informationis (a) deemed by the REALTOR®to be needed to assist with or complete, in a manner consistent withArticle 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 bedisclosed in reasonable detail. (Adopted 1/05, Renumbered 1/06)

  • Standard of Practice 10-3

      • REALTORS®shall not print, display or circulate any statement or advertisementwith respect to selling or renting of a property that indicates anypreference, limitations or discrimination based on race, color,religion, sex, handicap, familial status, or national origin. (Adopted1/94, Renumbered 1/05 and 1/06)

  • Standard of Practice 10-4

      • As used in Article10 “real estate employment practices” relates to employees andindependent contractors providing real estate-related services and theadministrative and clerical staff directly supporting thoseindividuals. (Adopted 1/00, Renumbered 1/05)

    Article 11
    The services which REALTORS®provide to their clients and customers shall conform to the standardsof practice and competence which are reasonably expected in thespecific real estate disciplines in which they engage; specifically,residential real estate brokerage, real property management, commercialand industrial real estate brokerage, real estate appraisal, realestate counseling, real estate syndication, real estate auction, andinternational real estate.

    REALTORS®shall not undertake to provide specialized professional servicesconcerning a type of property or service that is outside their field ofcompetence unless they engage the assistance of one who is competent onsuch types of property or service, or unless the facts are fullydisclosed to the client. Any persons engaged to provide such assistanceshall be so identified to the client and their contribution to theassignment 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 pursuitof a listing or to assist a potential purchaser in formulating apurchase offer, such opinions shall include the following:

      1. identification of the subject property

      2. date prepared

      3. defined value or price

      4. limiting conditions, including statements of purpose(s) and intended user(s)

      5. any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants

      6. basis for the opinion, including applicable market data

      7. if the opinion is not an appraisal, a statement to that effect (Amended 1/01)


  • Standard of Practice 11-2

      • The obligations ofthe Code of Ethics in respect of real estate disciplines other thanappraisal shall be interpreted and applied in accordance with thestandards of competence and practice which clients and the publicreasonably require to protect their rights and interests consideringthe complexity of the transaction, the availability of expertassistance, 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 counselfor a fee (not a commission), such advice shall be rendered in anobjective manner and the fee shall not be contingent on the substanceof the advice or counsel given. If brokerage or transaction servicesare to be provided in addition to consultive services, a separatecompensation may be paid with prior agreement between the client andREALTOR®. (Adopted 1/96)

  • Standard of Practice 11-4

      • The competency required by Article 11 relates to services contracted for between REALTORS®and their clients or customers; the duties expressly imposed by theCode of Ethics; and the duties imposed by law or regulation. (Adopted1/02)

    Article 12
    REALTORS®shall be honest and truthful in their real estate communications andshall present a true picture in their advertising, marketing, and otherrepresentations. REALTORS®shall ensure that their status as real estate professionals is readilyapparent in their advertising, marketing, and other representations,and that the recipients of all real estate communications are, or havebeen, notified that those communications are from a real estateprofessional. (Amended 1/08)

  • Standard of Practice 12-1

      • REALTORS®may use the term “free” and similar terms in their advertising and inother representations provided that all terms governing availability ofthe 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 theyexpect to receive compensation from a source other than their clientprovided 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 ofpremiums, prizes, merchandise discounts or other inducements to list,sell, purchase, or lease is not, in itself, unethical even if receiptof the benefit is contingent on listing, selling, purchasing, orleasing through the REALTOR® making the offer. However, REALTORS®must exercise care and candor in any such advertising or other publicor private representations so that any party interested in receiving orotherwise benefiting from the REALTOR®’soffer will have clear, thorough, advance understanding of all the termsand conditions of the offer. The offering of any inducements to dobusiness is subject to the limitations and restrictions of state lawand the ethical obligations established by any applicable Standard ofPractice. (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 affiliatedwith them to advertise listed property in any medium (e.g.,electronically, print, radio, television, etc.) without disclosing thename of that REALTOR®'s firm in a reasonable and readily apparent manner. (Adopted 11/86, Amended 1/07)

  • Standard of Practice 12-6

      • REALTORS®,when advertising unlisted real property for sale/lease in which theyhave an ownership interest, shall disclose their status as bothowners/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 orcooperating broker (selling broker) may claim to have “sold” theproperty. Prior to closing, a cooperating broker may post a “sold” signonly with the consent of the listing broker. (Amended 1/96)

  • Standard of Practice 12-8

      • The obligation topresent a true picture in representations to the public includesinformation presented, provided, or displayed on REALTORS®’ websites. REALTORS®shall use reasonable efforts to ensure that information on theirwebsites is current. When it becomes apparent that information on aREALTOR®’s website is no longer current or accurate, REALTORS® shall promptly take corrective action. (Adopted 1/07)

  • Standard of Practice 12-9

      • REALTOR® firm websites shall disclose the firm’s name and state(s) of licensure in a reasonable and readily apparent manner.

      Websites of REALTORS® and non-member licensees affiliated with a REALTOR® firm shall disclose the firm’s name and that REALTOR®’s or non-member licensee’s state(s) of licensure in a reasonable and readily apparent manner. (Adopted 1/07)

  • Standard of Practice 12-10

      • REALTORS®’obligation to present a true picture in their advertising andrepresentations to the public includes the URLs and domain names theyuse, and prohibits REALTORS® from:

      1. engaging in deceptive or unauthorized framing of real estate brokerage websites;

      2. manipulating (e.g., presentingcontent developed by others) listing content in any way that produces adeceptive or misleading result; or

      3. deceptively using metatags, keywordsor other devices/methods to direct, drive, or divert Internet traffic,or to otherwise mislead consumers. (Adopted 1/07)

  • Standard of Practice 12-11

      • REALTORS® intendingto share or sell consumer information gathered via the Internet shalldisclose that possibility in a reasonable and readily apparent manner.(Adopted 1/07)
  • Standard of Practice 12-12

      • REALTORS® shall not:

      1. use URLs or domain names that present less than a true picture, or

      2. register URLs or domain names which, if used, would present less than a true picture. (Adopted 1/08)

  • Standard of Practice 12-13

      • The obligation to present a true picture in advertising, marketing, and representations allows REALTORS®to use and display only professional designations, certifications, andother credentials to which they are legitimately entitled. (Adopted1/08)

    Article 13
    REALTORS®shall not engage in activities that constitute the unauthorizedpractice of law and shall recommend that legal counsel be obtained whenthe interest of any party to the transaction requires it.

    Article 14
    If charged with unethical practice or asked topresent evidence or to cooperate in any other way, in any professionalstandards proceeding or investigation, REALTORS®shall place all pertinent facts before the proper tribunals of theMember Board or affiliated institute, society, or council in whichmembership is held and shall take no action to disrupt or obstruct suchprocesses. (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 holdmembership with respect to alleged violations of the Code of Ethicsrelating to the same transaction or event. (Amended 1/95)

  • Standard of Practice 14-2

      • REALTORS®shall not make any unauthorized disclosure or dissemination of theallegations, findings, or decision developed in connection with anethics hearing or appeal or in connection with an arbitration hearingor procedural review. (Amended 1/92)

  • Standard of Practice 14-3

      • REALTORS®shall not obstruct the Board’s investigative or professional standardsproceedings by instituting or threatening to institute actions forlibel, slander or defamation against any party to a professionalstandards proceeding or their witnesses based on the filing of anarbitration request, an ethics complaint, or testimony given before anytribunal. (Adopted 11/87, Amended 1/99)

  • Standard of Practice 14-4

      • REALTORS®shall not intentionally impede the Board’s investigative ordisciplinary proceedings by filing multiple ethics complaints based onthe same event or transaction. (Adopted 11/88)

    # Duties to REALTORS®

    Article 15
    REALTORS®shall not knowingly or recklessly make false or misleading statementsabout competitors, their businesses, or their business practices.(Amended 1/92)

  • Standard of Practice 15-1

      • REALTORS® shall not knowingly or recklessly file false or unfounded ethics complaints. (Adopted 1/00)
  • Standard of Practice 15-2

      • The obligation torefrain from making false or misleading statements about competitors’businesses and competitors’ business practices includes the duty to notknowingly or recklessly repeat, retransmit, or republish false ormisleading statements made by others. This duty applies whether falseor misleading statements are repeated in person, in writing, bytechnological means (e.g., the Internet), or by any other means.(Adopted 1/07)

    Article 16
    REALTORS®shall not engage in any practice or take any action inconsistent withexclusive representation or exclusive brokerage relationship agreementsthat other REALTORS® have with clients. (Amended 1/04)

  • Standard of Practice 16-1

      • Article 16 is notintended to prohibit aggressive or innovative business practices whichare otherwise ethical and does not prohibit disagreements with otherREALTORS® involving commission, fees, compensation or other forms of payment or expenses. (Adopted 1/93, Amended 1/95)

  • Standard of Practice 16-2

      • Article 16 does not preclude REALTORS®from making general announcements to prospects describing theirservices and the terms of their availability even though somerecipients may have entered into agency agreements or other exclusiverelationships with another REALTOR®.A general telephone canvass, general mailing or distribution addressedto all prospects in a given geographical area or in a given profession,business, club, or organization, or other classification or group isdeemed “general” for purposes of this standard. (Amended 1/04)
      Article 16 is intended to recognize as unethical two basic types of solicitations:

      First, telephone or personal solicitations ofproperty owners who have been identified by a real estate sign,multiple listing compilation, or other information service as havingexclusively listed their property with another REALTOR®; and

      Second, mail or other forms of written solicitations of prospects whose properties are exclusively listed with another REALTOR®when such solicitations are not part of a general mailing but aredirected specifically to property owners identified throughcompilations of current listings, “for sale” or “for rent” signs, orother sources of information required by Article 3 and Multiple ListingService rules to be made available to other REALTORS® under offers of subagency or cooperation. (Amended 1/04)

  • Standard of Practice 16-3

      • Article 16 does not preclude REALTORS®from contacting the client of another broker for the purpose ofoffering to provide, or entering into a contract to provide, adifferent type of real estate service unrelated to the type of servicecurrently being provided (e.g., property management as opposed tobrokerage) or from offering the same type of service for property notsubject to other brokers’ exclusive agreements. However, informationreceived through a Multiple Listing Service or any other offer ofcooperation may not be used to target clients of other REALTORS® to whom such offers to provide services may be made. (Amended 1/04)

  • Standard of Practice 16-4

      • REALTORS®shall not solicit a listing which is currently listed exclusively withanother broker. However, if the listing broker, when asked by theREALTOR®,refuses to disclose the expiration date and nature of such listing;i.e., an exclusive right to sell, an exclusive agency, open listing, orother form of contractual agreement between the listing broker and theclient, 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 tobecome 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 aresubject to exclusive buyer/tenant agreements. However, if asked by aREALTOR®, 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, mayenter into a buyer/tenant agreement to become effective upon theexpiration of any existing exclusive buyer/tenant agreement. (Adopted1/94, 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 maydiscuss the terms upon which they might enter into a future agreementor, alternatively, may enter into an agreement which becomes effectiveupon expiration of any existing exclusive agreement. (Amended 1/98)

  • Standard of Practice 16-7

      • The fact that aprospect has retained a REALTOR® as an exclusive representative orexclusive broker in one or more past transactions does not precludeother REALTORS® from seeking such prospect’s future business. (Amended1/04)

  • Standard of Practice 16-8

      • The fact that anexclusive agreement has been entered into with a REALTOR® shall notpreclude or inhibit any other REALTOR® from entering into a similaragreement after the expiration of the prior agreement. (Amended 1/98)

  • Standard of Practice 16-9

      • REALTORS®, priorto entering into a representation agreement, have an affirmativeobligation to make reasonable efforts to determine whether the prospectis subject to a current, valid exclusive agreement to provide the sametype of real estate service. (Amended 1/04)

  • Standard of Practice 16-10

      • REALTORS®, actingas buyer or tenant representatives or brokers, shall disclose thatrelationship to the seller/landlord’s representative or broker at firstcontact and shall provide written confirmation of that disclosure tothe seller/landlord’s representative or broker not later than executionof a purchase agreement or lease. (Amended 1/04)

  • Standard of Practice 16-11

      • On unlistedproperty, REALTORS® acting as buyer/tenant representatives or brokersshall disclose that relationship to the seller/landlord at firstcontact for that buyer/tenant and shall provide written confirmation ofsuch disclosure to the seller/landlord not later than execution of anypurchase or lease agreement. (Amended 1/04)

      REALTORS® shall make any request for anticipated compensation from the seller/ landlord at first contact. (Amended 1/98)

  • Standard of Practice 16-12

      • REALTORS®, actingas representatives or brokers of sellers/landlords or as subagents oflisting brokers, shall disclose that relationship to buyers/tenants assoon as practicable and shall provide written confirmation of suchdisclosure to buyers/tenants not later than execution of any purchaseor lease agreement. (Amended 1/04)

  • Standard of Practice 16-13

      • All dealingsconcerning property exclusively listed, or with buyer/tenants who aresubject to an exclusive agreement shall be carried on with the client’srepresentative or broker, and not with the client, except with theconsent of the client’s representative or broker or except where suchdealings are initiated by the client.

      Before providing substantive services (such aswriting a purchase offer or presenting a CMA) to prospects, REALTORS®shall ask prospects whether they are a party to any exclusiverepresentation agreement. REALTORS® shall not knowingly providesubstantive services concerning a prospective transaction to prospectswho are parties to exclusive representation agreements, except with theconsent of the prospects’ exclusive representatives or at the directionof prospects. (Adopted 1/93, Amended 1/04)

  • Standard of Practice 16-14

      • REALTORS® are freeto enter into contractual relationships or to negotiate with sellers/landlords, buyers/tenants or others who are not subject to an exclusiveagreement but shall not knowingly obligate them to pay more than onecommission except with their informed consent. (Amended 1/98)

  • Standard of Practice 16-15

      • In cooperativetransactions 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 oraffiliated with other REALTORS® without the prior express knowledge andconsent of the cooperating broker.

  • Standard of Practice 16-16

      • REALTORS®, actingas subagents or buyer/tenant representatives or brokers, shall not usethe terms of an offer to purchase/lease to attempt to modify thelisting broker’s offer of compensation to subagents or buyer/tenantrepresentatives or brokers nor make the submission of an executed offerto purchase/lease contingent on the listing broker’s agreement tomodify the offer of compensation. (Amended 1/04)

  • Standard of Practice 16-17

      • REALTORS®,acting as subagents or as buyer/tenant representatives or brokers,shall not attempt to extend a listing broker’s offer of cooperationand/or compensation to other brokers without the consent of the listingbroker. (Amended 1/04)

  • Standard of Practice 16-18

      • REALTORS®shall not use information obtained from listing brokers through offersto cooperate made through multiple listing services or through otheroffers of cooperation to refer listing brokers’ clients to otherbrokers or to create buyer/tenant relationships with listing brokers’clients, unless such use is authorized by listing brokers. (Amended1/02)

  • Standard of Practice 16-19

      • Signs givingnotice of property for sale, rent, lease, or exchange shall not beplaced on property without consent of the seller/landlord. (Amended1/93)

  • Standard of Practice 16-20

      • REALTORS®,prior to or after terminating their relationship with their currentfirm, shall not induce clients of their current firm to cancelexclusive contractual agreements between the client and that firm. Thisdoes not preclude REALTORS®(principals) from establishing agreements with their associatedlicensees governing assignability of exclusive agreements. (Adopted1/98)

    Article 17
    In the event of contractual disputes or specificnon-contractual disputes as defined in Standard of Practice 17-4between REALTORS® (principals) associated with different firms, arising out of their relationship as REALTORS®, the REALTORS®shall submit the dispute to arbitration in accordance with theregulations 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 oftheir Board, provided the clients agree to be bound by the decision.

    The obligation to participate in arbitration contemplated by this Article includes the obligation of REALTORS® (principals) to cause their firms to arbitrate and be bound by any award. (Amended 1/01)

  • Standard of Practice 17-1

      • The filing of litigation and refusal to withdraw from it by REALTORS® in an arbitrable matter constitutes a refusal to arbitrate. (Adopted 2/86)

  • Standard of Practice 17-2

      • Article 17 does not require REALTORS®to arbitrate in those circumstances when all parties to the disputeadvise the Board in writing that they choose not to arbitrate beforethe 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. Wherea listing broker has compensated a cooperating broker and anothercooperating broker subsequently claims to be the procuring cause of thesale or lease. In such cases the complainant may name the firstcooperating broker as respondent and arbitration may proceed withoutthe listing broker being named as a respondent. When arbitration occursbetween two (or more) cooperating brokers and where the listing brokeris not a party, the amount in dispute and the amount of any potentialresulting award is limited to the amount paid to the respondent by thelisting broker and any amount credited or paid to a party to thetransaction at the direction of the respondent. Alternatively, if thecomplaint is brought against the listing broker, the listing broker mayname the first cooperating broker as a third-party respondent. Ineither instance the decision of the hearing panel as to procuring causeshall be conclusive with respect to all current or subsequent claims ofthe parties for compensation arising out of the underlying cooperativetransaction. (Adopted 1/97, Amended 1/07)


      2. Where a buyer or tenantrepresentative is compensated by the seller or landlord, and not by thelisting broker, and the listing broker, as a result, reduces thecommission owed by the seller or landlord and, subsequent to suchactions, another cooperating broker claims to be the procuring cause ofsale or lease. In such cases the complainant may name the firstcooperating broker as respondent and arbitration may proceed withoutthe listing broker being named as a respondent. When arbitration occursbetween two (or more) cooperating brokers and where the listing brokeris not a party, the amount in dispute and the amount of any potentialresulting award is limited to the amount paid to the respondent by theseller or landlord and any amount credited or paid to a party to thetransaction at the direction of the respondent. Alternatively, if thecomplaint is brought against the listing broker, the listing broker mayname the first cooperating broker as a third-party respondent. Ineither instance the decision of the hearing panel as to procuring causeshall be conclusive with respect to all current or subsequent claims ofthe parties for compensation arising out of the underlying cooperativetransaction. (Adopted 1/97, Amended 1/07)


      3. Where a buyer or tenantrepresentative is compensated by the buyer or tenant and, as a result,the listing broker reduces the commission owed by the seller orlandlord and, subsequent to such actions, another cooperating brokerclaims to be the procuring cause of sale or lease. In such cases thecomplainant may name the first cooperating broker as respondent andarbitration may proceed without the listing broker being named as arespondent. Alternatively, if the complaint is brought against thelisting broker, the listing broker may name the first cooperatingbroker as a third-party respondent. In either instance the decision ofthe hearing panel as to procuring cause shall be conclusive withrespect to all current or subsequent claims of the parties forcompensation arising out of the underlying cooperative transaction.(Adopted 1/97)


      4. Where two or more listing brokersclaim entitlement to compensation pursuant to open listings with aseller or landlord who agrees to participate in arbitration (or whorequests arbitration) and who agrees to be bound by the decision. Incases where one of the listing brokers has been compensated by theseller or landlord, the other listing broker, as complainant, may namethe first listing broker as respondent and arbitration may proceedbetween the brokers. (Adopted 1/97)


      5. Where a buyer or tenantrepresentative is compensated by the seller or landlord, and not by thelisting broker, and the listing broker, as a result, reduces thecommission owed by the seller or landlord and, subsequent to suchactions, claims to be the procuring cause of sale or lease. In suchcases arbitration shall be between the listing broker and the buyer ortenant representative and the amount in dispute is limited to theamount of the reduction of commission to which the listing brokeragreed. (Adopted 1/05)

  • Standard of Practice 17-5

      • The obligation to arbitrate established in Article 17 includes disputes between REALTORS® (principals) in different states in instances where, absent an established inter–association arbitration agreement, the REALTOR®(principal) requesting arbitration agrees to submit to the jurisdictionof, travel to, participate in, and be bound by any resulting awardrendered in arbitration conducted by the respondent(s) REALTOR®’s association, in instances where the respondent(s) REALTOR®’s association determines that an arbitrable issue exists. (Adopted 1/07)

    The Code ofEthics was adopted in 1913. Amended at the Annual Convention in 1924,1928, 1950, 1951, 1952, 1955, 1956, 1961, 1962, 1974, 1982, 1986, 1987,1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000,2001, 2002, 2003, 2004, 2005, 2006, and 2007.

    Explanatory Notes
    The reader should be aware of the followingpolicies which have been approved by the Board of Directors of theNational 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 ofthe Code. Standards of Practice may be cited in support of the charge.

    The Standards of Practice serve to clarify theethical obligations imposed by the various Articles and supplement, anddo not substitute for, the Case Interpretations in Interpretations ofthe Code of Ethics.

    Modifications to existing Standards of Practiceand additional new Standards of Practice are approved from time totime. Readers are cautioned to ensure that the most recent publicationsare utilized.