Matthew Rathbun's Mocking Hearing Handout

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CK H EARIN
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int:
Mock Hearing Compla
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In House Stolen Clien

ROLE
PLAY
ERS

Mock Hearing Notes
! Tips
o Stick to Facts – Not Feelings

o Document, Document, Document

o Appearance

o Broker / Attorney Counsel

o Take Notes for Cross Examination

o “Body Language”

o Bring Broker’s Policy (that was in place at time of incident)

o Only Answer the Question and no more…

o

! Should Buyer Be Sued for Breach of Contract?
! What were the Chain of Events
! Who was represented at Open House?
! Expired 7 Days within the 15 extension (June 27, 2009)
! Can a Buyer terminate an agreement
! Broker wants Client Handled
! Duty to Explore?
! Moral versus Ethics

Complaint Notes for Role Players

Complainant:
Client Witness:

Respondent:

Grievance Chair:

Grievance:

Professional Standards Chair:

Professional Standards Panel:

Class will start with introduction and plan on how the program will proceed. We’ll start
with the students having a copy of the Ethics Complaint. Then a very brief discussion,
with narration from me, about why we only let Grievance see one side of the complaint
and what the purpose of the workgroup is. I’ll cover the 8 questions and move the
complaint forward. The Grievance committee needs to see the e-mail from the
Respondent as a threat or harassment under article 14 and modify the complaint to
include this as a potential violation.

The Professional Standards Panel will take their seats and I’ll act as the chair, so that I
can also narrate. I am going to encourage the students to feel as if they were part of
the hearing panel and ask questions as well.

I plan on also sprinkling heavy hints that mediation maybe a better option in most
arbitration cases.

Complainant Story:

Complainant advises that they have been e-mailing the buyer, since March of 2009,
listings that were potential waterfront homes, and would permit the basement to be
finished.

The Complainant met the buyer at an open house at 487 Main Street in Sunshine
Subdivision, where the Complainant presented the home. The home did not meet the
qualifications for the buyer at the time and the price was a bit high. The Open house as
being sold as a short sale, but the buyer was not made aware. The complainant did get
a buyer agency agreement signed for 90 days at that time (March 24th, 2009).

The buyer and Complainant have had numerous e-mails back and forth talking about
homes that were available in MLS.

On June 14th, the Complainant did meet the buyer and showed her a home in the
subdivision across from Sunshine Subdivision. The buyer wasn’t interested, but asked
the Complainant to continue to e-mail listing information.

On July 5th, the Complainant was on vacation and the buyer noticed a For Sale sign in
front of 487 Main Street in Sunshine Subdivision. This was the original home where the
Complainant and the Buyer met at an Open House.

That house, which was originally a short sale is now listed as a REO for $100,000 less
than the original asking price. Current asking price is $300,000. On August 1st, the
property closed and the Buyer had worked with the Respondent to represent her.

The Respondent is an agent with the same Brokerage as the Complainant.

The Complainant advises that she called the Buyer on August 3rd to see if she was still
getting the e-mails, as the Complainant hadn’t heard from the Buyer. The Buyer
advised that she called the Complainant’s company to find her and was told that she
wasn’t available, so she used the Respondent (who had been on floor duty at the time)
to help her buy the home.

The Complainant approached the Respondent, who responded that since there was no
buyer agreement and the Buyer said she was wasn’t obligated to work with anyone, he
was free to represent her.

The Respondent e-mailed the Complainant acknowledging that if they were to file a
complaint the Respondent would sue for deformation and damages for time defending
themselves, as a result of the loss of reputation.

Exhibits: e-mails between Complainant and Buyer, Buyer Agency Agreement, MLS
sheets, angry e-mails between agents involved including threat by Respondent to
Complainant that if she does file the arbitration complaint he’ll sue for deformation.

Talking Points for Respondent:

! Buyer called their office while Respondent was on floor duty. Buyer advised that
they were receiving e-mails, but wasn’t exclusive with any agent. She only called
and asked for the Complainant because she was supposed to be emailing her
listings from Sunshine Subdivision, but this one wasn’t in the list.

! Respondent doesn’t know why Complainant didn’t send this particular listing, but
asked buyer to meet at their office, took the Buyer to see the property and

immediately back to the office to write an offer, which was accepted and the
transaction was closed.

! Respondent does not deny warning that they threatened a lawsuit for damages
to their reputation. They have consulted an attorney but didn’t feel he needed
one for this complaint.

! From there you are fine to make up any plausible stories as you wish.

Talking Points for Buyer

! You didn’t renew your Buyer Agency Agreement because you feel the
complainant wasn’t very responsive, however if asked questions about what the
agent wasn’t doing, you’ll not really be able to define it.

! You were advised when you called the Brokerage that the Complainant was on
vacation and you decided that anyone could help you.

! You’re welcome to make up any plausible responses to questions, but ultimately
you never felt any allegiance to the Complainant. You were also working with a
few other agents to look for a specific property. The Respondent did do a great
job of convincing you that this was a great home for your needs and with the low
price, “you couldn’t lose.”

! You didn’t necessarily feel like the house would meet your needs the first time
you saw it.

! ! ! ! ! ! ! ! ! ! ! ! !
! ! ! ! ! ! ! ! ! ! ! ! !
! ! ! ! ! ! ! ! ! ! ! ! !

! ! ! ! ! ! ! ! ! ! ! ! !
! ! ! ! ! ! ! ! ! ! ! ! !
! ! ! !

Summary of Complaint

The complainant alleges:

Complainant advises that they have been e-mailing the buyer since March of 2009 with
listings that were potential waterfront homes. Additionally the home would need to lend
itself to the basement being finished. The Complainant met the buyer at an open house
at 487 Main Street in Sunshine Subdivision, where the Complainant presented the
home. The home did not meet the qualifications for the Buyer at the time and the price
was a bit high. The home the open house was being held in was a short sale, but the
buyer was not made aware. The complainant did get a buyer agency agreement signed
for 90 days at that time (March 24th, 2009).

The buyer and Complainant have had numerous e-mails back and forth talking about
homes that come up in MLS. On June 14th, the Complainant did meet the buyer and
showed her a home in the subdivision across from Sunshine Subdivision. The buyer
wasn’t interested, but asked the Complainant to continue to e-mail listing information.

On July 5th, the Complainant was on vacation and the Buyer noticed a “For Sale” sign in
front of 487 Main Street in Sunshine Subdivision. This was the home that was originally
a short sale and is now listed as a REO for $100,000 less than the original asking price.
Current asking price is $300,000. On August 1st, the property closed and the Buyer
used the Respondent to represent her with the REO company. The Respondent is an
agent in the same Brokerage as the Complainant.

The Complainant advises that they called the Buyer on August 3rd to see if they were
still getting the e-mails, as the Complainant hadn’t heard from the Buyer. The Buyer
advised that they called the Complainant’s company to find her and was told that she
wasn’t available. The Buyer then decided to use the Respondent to help them buy the
home.

The Complainant approached the Respondent, who responded to her stating that since
there was no buyer agreement and the Buyer said she was wasn’t obligated to work
with anyone, they were free to represent the Buyer.

The Respondent e-mailed threats that if the Complainant were to file a complaint they
would sue for deformation and time defending themselves, as a result of the damage to
reputation.

From the NAR Professional Standards Manual

In reviewing an ethics complaint, the Grievance Committee shall consider the following:
(1) Is the ethics complaint acceptable in form as received by the Committee? If not in
proper form, the Chairperson may request that the Elected Secretary or the Executive
Officer contact the complainant to advise that the complaint must be submitted in proper
form.

NOTE: If deemed appropriate by the Chairperson, a member of the Grievance
Committee may be assigned to contact the complainant and to provide procedural
assistance to amend the complaint or resubmit a new complaint in proper form and with
proper content. The Grievance Committee member providing such assistance shall
ensure that only procedural assistance is provided to the complainant, and that the
complainant understands that the member is not representing the complainant.

(2) Are all necessary parties named in the complaint?

(3) Was the complaint filed within one hundred eighty (180) days of the time that the
alleged offense and facts relating to it could have been known by the complainant in the
exercise of reasonable diligence or within one hundred eighty (180) days after the
conclusion of the transaction, whichever is later? (Revised 5/06)

(4) Is the respondent named in the complaint a member of the Board, and was the
respondent a member of any Board at the time of the alleged offense?

(5) Is litigation or any government agency investigation or other action pending related
to the same transaction?
(a) If criminal litigation is pending related to the same transaction, the Grievance
Committee shall cease its considerations and instruct the Board Secretary to
hold the file pending until such time as the criminal litigation is concluded. A
report shall be made to the Board President. (Revised 11/96)
(b) If civil litigation is pending related to the same transaction, the Grievance
Committee shall instruct the Board Secretary to have Board legal counsel review
the complaint filed and advise if any hearing should proceed (presuming the
matter would otherwise warrant a hearing), with counsel considering the
following:
(1) similarity of factors giving rise to pending litigation or regulatory or
administrative proceeding and the ethics complaint
(2) degree to which resolution of the pending civil litigation or regulatory or
administrative proceeding could make consideration of the ethics
complaint unnecessary
(3) degree to which pending litigation or regulatory or administrative
proceeding would delay prompt disposition of the ethics complaint

(4) the nature of the alleged violation and the extent to which it could
impact on cooperation with other Board Members
(5) the assurance of Board legal counsel that consideration of an ethics
complaint would not deprive the respondent of due process

(6) Is there any reason to conclude that the Board would be unable to provide an
impartial Hearing Panel?

(7) Are the specific Articles cited in the complaint appropriate in light of the facts
provided? Should additional Articles be cited? Should certain Standards of Practice be
cited in support of the Articles charged? Are any inappropriate Articles cited?

(8) If the facts alleged in the complaint were taken as true on their face, is it possible
that a violation of the Code of Ethics occurred?

Form #E-1
Mock Hearing Association of REALTORS®
_________________________________________________________________________________________________________
Board or State Association

3 Main Street Somewhere VA
_________________________________________________________________________________________________________ 12345
Address City State Zip

Ethics Complaint

Mock Hearing Association of REALTORS®
To the Grievance Committee of the ___________________________________________________________________________
Board or State Association

August 4 08
Filed _______________________________, 20___________

Mock Complainant Agent
__________________________________________________ Mock Respondent Agent
__________________________________________________

__________________________________________________ __________________________________________________

__________________________________________________ __________________________________________________
Complainant(s) Respondent(s)

Complainant(s) charge(s):
Article 16, Article 1
An alleged violation of Article(s) ___________________________________ of the Code of Ethics or other membership duty as set
n/a
forth in the bylaws of the Board in ________________________________________________ and alleges that the above charge(s)
Article, Section
(is/are) supported by the attached statement, which is signed and dated by the complainant(s).
This complaint is true and correct to the best knowledge and belief of the undersigned and is filed within one hundred eighty (180)
days after the facts constituting the matter complained of could have been known in the exercise of reasonable diligence.
I (we) declare that to the best of my (our) knowledge and belief, my (our) allegations in this complaint are true.
Are the circumstances giving rise to this ethics complaint involved in civil or criminal litigation or in any proceeding before the state
real estate licensing authority or any other state or federal regulatory or administrative agency?
❐ Yes X No
❐
You may file an ethics complaint in any jurisdiction where a REALTOR® is a member or MLS participant. Note that the REALTORS® Code
of Ethics, Standard of Practice 14-1 provides, in relevant part, “REALTORS® shall not be subject to disciplinary proceeding in more than
one Board of REALTORS® . . . with respect to alleged violations of the Code of Ethics relating to the same transaction or event.”
Have you filed, or do you intend to file, a similar or related complaint with another Association(s) of REALTORS®?
❐ Yes X
❐ No
If so, name of other Association(s): _______________________________________ Date(s) filed: _________________________
I understand that should the Grievance Committee dismiss this ethics complaint in part or in total, that I have twenty (20) days from
my receipt of the dismissal notice to appeal the dismissal to the Board of Directors.
Complainant(s):

XXXXXXXXXXXXXXXXXXXXXX
__________________________________________________
Type/Print Name Phone
XXXXXXXXXXXXXXXXXXXXXXXX
__________________________________________________
Signature

__________________________________________________ __________________________________________________
Type/Print Name Phone Signature

__________________________________________________ __________________________________________________
Type/Print Name Phone Signature

_________________________________________________________________________________________________________
Address
(Revised 11/02)

Code of Ethics and Arbitration Manual 82

EXCLUSIVE RIGHT TO REPRESENT BUYER AGREEMENT
This Agreement is made on March 24, 2008 between
Mock Buyer ("Buyer") and
Made Up Real Estate, Inc. ("Broker").
(Name of brokerage firm)

In consideration of services and facilities, the Broker is hereby granted the right to represent the Buyer in the
acquisition of real property. (As used in this Agreement, "acquisition of real property" shall include any
purchase, option, exchange or lease of property or an agreement to do so.)
1. BUYER'S REPRESENTATIONS. The Buyer represents that as of the commencement date of this
Agreement, the Buyer is not a party to a buyer representation agreement with any other brokerage firm. The
Buyer further represents that the Buyer has disclosed to the Sales Associate information about any properties
that the Buyer has previously visited at any new homes communities or resale open houses, or that the Buyer
has been shown by any other real estate sales associate(s) in any area where the Buyer seeks to acquire
property under this Agreement.
2. TERM. This Agreement commences when signed and, subject to Paragraph 7, expires at 9:00
a.m. OR X p.m. on June 27, 2008 .
3. RETAINER FEE. The Broker, Made Up Real Estate, Inc. (Name of brokerage firm),
acknowledges receipt of a retainer fee in the amount of none , which shall OR shall
not be subtracted from any compensation due the Broker under this Agreement. The retainer is non-refundable
and is earned when paid.

4. BROKER'S DUTIES. The Broker and the Sales Associate shall
A) Promote the interests of the Buyer by:
1) performing the terms of this Agreement;
2) seeking property at a price and terms acceptable to the Buyer; however, Broker and Sales Associate
shall not be obligated to seek other properties for the Buyer while the Buyer is a party to a contract to
purchase property unless part of this brokerage agreement;
3) assisting in the drafting and negotiating of offers and counteroffers to and from the Buyer and Seller and
in establishing strategies for accomplishing the Buyer’s objectives;
4) providing reasonable assistance to the Buyer to satisfy the Buyer’s contractual obligations and to
facilitate the settlement of the purchase contract;
5) receiving and presenting in a timely manner all written offers or counteroffers to and from the Buyer and
Seller, even when the Buyer is already a party to a contract to purchase property;
6) disclosing to the Buyer all material facts related to the property or concerning the transaction of which
they have actual knowledge;
7) accounting in a timely manner for all money and property received in which the Buyer has or may have
an interest.

B) Maintain the confidentiality of all personal and financial information and other matters identified as
confidential by the Buyer, if that information is received from the Buyer during the brokerage relationship unless
otherwise provided by law or the Buyer consents in writing to the release of the information. However, Sellers or
Sellers’ representatives may not treat the existence, terms, or conditions of offers as confidential unless
confidentiality is required by law, regulation, or by any confidentiality agreement between the parties.
In satisfying these duties, the Broker shall exercise ordinary care, comply with all applicable laws and
regulations, treat all prospective sellers honestly and not knowingly give them false information, and disclose
whether or not the Buyer’s intent is to occupy the property as a principal residence. In addition, the Broker may:
show the same property to other buyers; represent other buyers on the same or different properties; represent
Sellers relative to other properties; or provide assistance to a seller or prospective seller by performing
ministerial acts that are not inconsistent with the Broker’s duties under this Agreement.

NVAR - 1338 - rev 01/08 Page 1 of 3 Initials: Buyer /
Fredericksburg Area Association of REALTORS 7101 Carl D. Silver ParkwayFredericksburg, VA 22401
Phone: (540) 373 - 7711 Fax: (540) 736 - 0301 Matthew Rathbun buyeragent
Produced with ZipForm™ by RE FormsNet, LLC 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zipform.com

5. BUYER'S DUTIES. The Buyer shall: (a) work exclusively with the Broker during the term of this
Agreement; (b) pay the Broker, directly or indirectly, the compensation set forth below; (c) comply with the
reasonable requests of the Broker to supply any pertinent financial or personal data needed to fulfill the terms of
this Agreement; (d) be available during the Broker's regular working hours to view properties.
6. PURPOSE. The Buyer is retaining the Broker to acquire the following type of property: residential
property, preferably lake front .

7. COMPENSATION. In consideration of the time and effort expended by the Broker on behalf of the Buyer, and
in further consideration of the advice and counsel provided to the Buyer, the Buyer shall pay compensation
("Broker's Fee") to the Broker as described below. The Broker's Fee, less the Retainer Fee if so indicated in
Paragraph 3 above, shall be earned, due and payable under any of these circumstances whether the
transaction is consummated through the services of the Broker or otherwise:
A) If the Buyer enters into a contract to acquire real property during the term of this Agreement and goes to
settlement on that contract any time thereafter; OR
B) If, within 15 days after expiration or termination of this Agreement, the Buyer enters into
a contract to acquire real property that has been described to or shown to the Buyer by the Broker during
the term of this Agreement, unless the Buyer has entered into a subsequent "Exclusive Right to Represent
Buyer" agreement with another real estate broker; OR
C) If, having entered into an enforceable contract to acquire real property during the term of this
Agreement, the Buyer defaults under the terms of that contract.
The Broker's Fee shall be three percent of sales price . In addition to
the Broker's compensation, an additional fee of $750.00 will be collected from the
Buyer payable to the Broker, at the time of settlement. If the seller or the seller's representative offers
compensation to the Broker, then the Buyer authorizes the Broker to receive such compensation and the
amount of such compensation shall be credited against the Buyer's obligation to pay the Broker's Fee. The
Broker may retain any additional compensation offered by the seller or seller's representative, even if this
causes the compensation paid to the Broker to exceed the fees specified above. In no case shall the
compensation be less than the fees specified above.
Any obligation incurred under this Agreement on the part of the Buyer to pay the Broker's Fee
shall survive the term of this Agreement.

8. The Buyer is participating in any type of employee relocation program Yes OR X No.

If "Yes": (a) the program is named: , and
(b) terms of the program are:
.

If "No" or the Buyer has failed to list a specific employee relocation program, then the Broker shall have no
obligation to cooperate with or compensate any undisclosed program.

9. DISCLOSED DUAL REPRESENTATION. The Buyer acknowledges that in the normal course of business
the Broker may represent sellers of properties in which the Buyer is interested. If the Buyer wishes to acquire
any property listed with the Broker, then the Buyer will be represented in one of the two ways that are permitted
under Virginia law in this situation. The written consent required from the parties in each case will be
accomplished via execution of the appropriate disclosure form at the time of the contract offer.
Dual representation occurs when a buyer and seller in one transaction are represented by the same Broker
and the same Sales Associate. When the parties agree to dual representation, the ability of the Broker and the
Sales Associate to represent either party fully and exclusively is limited. The confidentiality of all clients shall be
maintained as in paragraph 4 above.
Designated representation occurs when a buyer and seller in one transaction are represented by different
Sales Associates affiliated with the same Broker. Each of these Sales Associates, known as a Designated
Representative, represents fully the interests of a different client in the same transaction. Designated
Representatives are not dual representatives if each represents only the buyer or only the seller in a specific
real estate transaction. Except for disclosure of confidential information to the Broker, each Designated
Representative is bound by the confidentiality requirements in Paragraph 4 above. The Broker remains a dual
representative.

NVAR - 1338 - rev 01/08 Page 2 of 3 Initials: Buyer /

Produced with ZipForm™ by RE FormsNet, LLC 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zipform.com buyeragent

CHECK ONE CHOICE IN EACH SECTION:
Dual representation: The Buyer does OR does not consent to be shown and to consider acquiring
properties listed with the Broker through the Sales Associate.
Designated representation: The Buyer does OR does not consent to be shown and to consider
acquiring properties listed with the Broker through another Designated Representative associated with the
firm.
10. DISCLAIMER. The buyer acknowledges that the Broker is being retained solely as a real estate agent and
not as an attorney, tax advisor, lender, appraiser, surveyor, structural engineer, mold or air quality expert, home
inspector or other professional service provider. The Buyer is advised to seek professional advice concerning
the condition of the property or concerning legal and tax matters. The Buyer should exercise whatever due
diligence the Buyer deems necessary with respect to information on any sexual offenders registered under
Chapter 23 (§19.2-387 et. seq.) of Title 19.2. Such information may be obtained by contacting your local police
department or the Department of State Police, Central Criminal Records Exchange, at (804)674-2000 or
www.vsp.state.va.us.
11. EQUAL OPPORTUNITY. Properties shall be shown and made available to the Buyer without regard to race,
color, religion, sex, handicap, familial status or national origin as well as all classes protected by the laws of the
United States, the Commonwealth of Virginia and applicable local jurisdictions.
12. OTHER PROVISIONS.

.
13. MISCELLANEOUS. This Agreement, any exhibits and any addenda signed by the parties constitute the
entire agreement between the parties and supersedes any other written or oral agreements between the parties.
This Agreement can only be modified in writing when signed by both parties. In any action or proceeding
involving a dispute between the Buyer, the seller and/or the Broker, arising out of this Agreement, or to collect
the Broker's Fee, the prevailing party shall be entitled to receive from the other party reasonable attorney's fees
to be determined by the court or arbitrator(s).
(NOTE: The Buyer should consult with the Sales Associate before visiting any resale or new homes or
contacting any other REALTORS® representing sellers, to avoid the possibility of confusion over the
brokerage relationship and misunderstandings about liability for compensation.)
Made Up Real Estate, Inc.
Brokerage Firm

03/24/2008 1 Main Street
Date Buyers Signature Address
Mock Buyer
Somewhere, va 12345
Date Buyers Signature City, State, Zip Code

The Buyer does OR X does not hold an active or inactive Virginia real estate license.
2 Main Street
Address Date Broker/Sales Manager's Signature

Somewhere, VA 12345 Selling Agent
City, State, Zip Code Sales Associate's/Designated Representative's Printed Name

Phone: Phone:
Work Home Work Home
Fax: Fax:

Email: Email:

© 2008 Northern Virginia Association of REALTORS®, Inc.
This is a suggested form of the Northern Virginia Association of REALTORS®, Inc. ("NVAR"). This form has been exclusively printed for the use
of REALTOR® and Non-Resident members of NVAR, who may copy or otherwise reproduce this form in identical form with the addition of their
company logo. Any other use of this form by REALTOR® and Non-Resident members of NVAR, or any use of this form whatsoever by
non-members of NVAR is prohibited without the prior written consent of NVAR. Notwithstanding the above, no REALTOR® or Non-Resident
member of NVAR, or any other person, may copy or otherwise reproduce this form for purposes of resale.

NVAR - 1338 - rev 01/08 Page 3 of 3
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an agency relationship as defined by state law or regulation; and 3) use confidential information of clients for the REALTOR®’s
“broker” means a real estate licensee (including brokers and sales advantage or the advantage of third parties unless:
associates) acting as an agent or in a legally recognized non-agency a) clients consent after full disclosure; or
capacity. (Adopted 1/95, Amended 1/07) b) REALTORS® are required by court order; or
c) it is the intention of a client to commit a crime and the
• Standard of Practice 1-3 information is necessary to prevent the crime; or
REALTORS®, in attempting to secure a listing, shall not deliberately d) it is necessary to defend a REALTOR® or the REALTOR®’s
mislead the owner as to market value. employees or associates against an accusation of wrongful
conduct.
• Standard of Practice 1-4 Information concerning latent material defects is not considered
REALTORS®, when seeking to become a buyer/tenant representative, confidential information under this Code of Ethics. (Adopted 1/93,
shall not mislead buyers or tenants as to savings or other benefits Amended 1/01)
that might be realized through use of the REALTOR®’s services.
(Amended 1/93)
• Standard of Practice 1-10
REALTORS® shall, consistent with the terms and conditions of their real
• Standard of Practice 1-5 estate licensure and their property management agreement,
REALTORS® may represent the seller/landlord and buyer/tenant in the competently manage the property of clients with due regard for the
same transaction only after full disclosure to and with informed rights, safety and health of tenants and others lawfully on the
consent of both parties. (Adopted 1/93) premises. (Adopted 1/95, Amended 1/00)

• Standard of Practice 1-6 • Standard of Practice 1-11
REALTORS® shall submit offers and counter-offers objectively and as REALTORS® who are employed to maintain or manage a client’s
quickly as possible. (Adopted 1/93, Amended 1/95) property shall exercise due diligence and make reasonable efforts to
protect it against reasonably foreseeable contingencies and losses.
• Standard of Practice 1-7 (Adopted 1/95)
When acting as listing brokers, REALTORS® shall continue to submit to
the seller/landlord all offers and counter-offers until closing or • Standard of Practice 1-12
execution of a lease unless the seller/landlord has waived this When entering into listing contracts, REALTORS® must advise sellers/
obligation in writing. REALTORS® shall not be obligated to continue to landlords of:
market the property after an offer has been accepted by the 1) the REALTOR®’s company policies regarding cooperation and the
seller/landlord. REALTORS® shall recommend that sellers/landlords amount(s) of any compensation that will be offered to subagents,
obtain the advice of legal counsel prior to acceptance of a subsequent buyer/tenant agents, and/or brokers acting in legally recognized
offer except where the acceptance is contingent on the termination of non-agency capacities;
the pre-existing purchase contract or lease. (Amended 1/93) 2) the fact that buyer/tenant agents or brokers, even if compensated by
listing brokers, or by sellers/landlords may represent the interests
• Standard of Practice 1-8 of buyers/tenants; and
REALTORS®, acting as agents or brokers of buyers/tenants, shall submit 3) any potential for listing brokers to act as disclosed dual agents,
to buyers/tenants all offers and counter-offers until acceptance but e.g., buyer/tenant agents. (Adopted 1/93, Renumbered 1/98,
have no obligation to continue to show properties to their clients after Amended 1/03)
an offer has been accepted unless otherwise agreed in writing.
REALTORS®, acting as agents or brokers of buyers/tenants, shall • Standard of Practice 1-13
recommend that buyers/tenants obtain the advice of legal counsel if When entering into buyer/tenant agreements, REALTORS® must advise
there is a question as to whether a pre-existing contract has been potential clients of:
terminated. (Adopted 1/93, Amended 1/99)
1) the REALTOR®’s company policies regarding cooperation;
2) the amount of compensation to be paid by the client;
• Standard of Practice 1-9 3) the potential for additional or offsetting compensation from other
The obligation of REALTORS® to preserve confidential information (as brokers, from the seller or landlord, or from other parties;
defined by state law) provided by their clients in the course of any 4) any potential for the buyer/tenant representative to act as a
agency relationship or non-agency relationship recognized by law disclosed dual agent, e.g., listing broker, subagent, landlord’s
continues after termination of agency relationships or any non-agency agent, etc., and
relationships recognized by law. REALTORS® shall not knowingly, 5) the possibility that sellers or sellers’ representatives may not treat
during or following the termination of professional relationships with the existence, terms, or conditions of offers as confidential unless
their clients: confidentiality is required by law, regulation, or by any
1) reveal confidential information of clients; or confidentiality agreement between the parties. (Adopted 1/93,
2) use confidential information of clients to the disadvantage of Renumbered 1/98, Amended 1/06)
clients; or
Fees for preparing appraisals or other valuations shall not be
contingent upon the amount of the appraisal or valuation.
(Adopted 1/02)

REALTORS®, in response to inquiries from buyers or cooperating
brokers shall, with the sellers’ approval, disclose the existence of

offers on the property. Where disclosure is authorized, Standard of Practice 3-2 does not preclude the listing broker and
REALTORS® shall also disclose, if asked, whether offers were obtained cooperating broker from entering into an agreement to change
by the listing licensee, another licensee in the listing firm, or by a cooperative compensation. (Adopted 1/94)
cooperating broker. (Adopted 1/03, Amended 1/09)
REALTORS®, acting as listing brokers, have an affirmative obligation to
Article 2 disclose the existence of dual or variable rate commission
REALTORS® shall avoid exaggeration, misrepresentation, or arrangements (i.e., listings where one amount of commission is
concealment of pertinent facts relating to the property or the payable if the listing broker’s firm is the procuring cause of sale/lease
transaction. REALTORS® shall not, however, be obligated to discover and a different amount of commission is payable if the sale/lease
latent defects in the property, to advise on matters outside the scope of results through the efforts of the seller/landlord or a cooperating
their real estate license, or to disclose facts which are confidential broker). The listing broker shall, as soon as practical, disclose the
under the scope of agency or non-agency relationships as defined by existence of such arrangements to potential cooperating brokers and
state law. (Amended 1/00) shall, in response to inquiries from cooperating brokers, disclose the
differential that would result in a cooperative transaction or in a
• Standard of Practice 2-1 sale/lease that results through the efforts of the seller/landlord. If the
REALTORS® shall only be obligated to discover and disclose adverse cooperating broker is a buyer/tenant representative, the buyer/ tenant
factors reasonably apparent to someone with expertise in those areas representative must disclose such information to their client before the
required by their real estate licensing authority. Article 2 does not client makes an offer to purchase or lease. (Amended 1/02)
impose upon the REALTOR® the obligation of expertise in other
professional or technical disciplines. (Amended 1/96)
• Standard of Practice 2-2 It is the obligation of subagents to promptly disclose all pertinent facts
(Renumbered as Standard of Practice 1-12 1/98) to the principal’s agent prior to as well as after a purchase or lease
agreement is executed. (Amended 1/93)
(Renumbered as Standard of Practice 1-13 1/98) • Standard of Practice 3-6
REALTORS® shall disclose the existence of accepted offers, including
• Standard of Practice 2-4 offers with unresolved contingencies, to any broker seeking
REALTORS® shall not be parties to the naming of a false consideration cooperation. (Adopted 5/86, Amended 1/04)
in any document, unless it be the naming of an obviously nominal
consideration.
• Standard of Practice 2-5 When seeking information from another REALTOR® concerning
Factors defined as “non-material” by law or regulation or which are property under a management or listing agreement, REALTORS® shall
expressly referenced in law or regulation as not being subject to disclose their REALTOR® status and whether their interest is personal
disclosure are considered not “pertinent” for purposes of Article 2. or on behalf of a client and, if on behalf of a client, their
(Adopted 1/93) representational status. (Amended 1/95)

Article 3 REALTORS® shall not misrepresent the availability of access to show or
REALTORS® shall cooperate with other brokers except when cooperation inspect a listed property. (Amended 11/87)
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) Article 4
REALTORS® shall not acquire an interest in or buy or present offers from
• Standard of Practice 3-1 themselves, any member of their immediate families, their firms or any
REALTORS®, acting as exclusive agents or brokers of sellers/landlords, member thereof, or any entities in which they have any ownership
establish the terms and conditions of offers to cooperate. Unless interest, any real property without making their true position known to
expressly indicated in offers to cooperate, cooperating brokers may the owner or the owner’s agent or broker. In selling property they own,
not assume that the offer of cooperation includes an offer of or in which they have any interest, REALTORS® shall reveal their
compensation. Terms of compensation, if any, shall be ascertained by ownership or interest in writing to the purchaser or the purchaser’s
cooperating brokers before beginning efforts to accept the offer of representative. (Amended 1/00)
cooperation. (Amended 1/99)

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)


For the protection of all parties, the disclosures required by Article 4 For the protection of all parties, REALTORS® shall use reasonable care
shall be in writing and provided by REALTORS® prior to the signing of to ensure that documents pertaining to the purchase, sale, or lease of
any contract. (Adopted 2/86) real estate are kept current through the use of written extensions or
amendments. (Amended 1/93)

Article 5 • Standard of Practice 9-2
REALTORS® shall not undertake to provide professional services When assisting or enabling a client or customer in establishing a
concerning a property or its value where they have a present or contractual relationship (e.g., listing and representation agreements,
contemplated interest unless such interest is specifically disclosed to all purchase agreements, leases, etc.) electronically, REALTORS® shall
affected parties. make reasonable efforts to explain the nature and disclose the specific
terms of the contractual relationship being established prior to it being
agreed to by a contracting party. (Adopted 1/07)

Article 6
REALTORS® shall not accept any commission, rebate, or profit on Duties to the Public
expenditures made for their client, without the client’s knowledge and
consent. Article 10
REALTORS® shall not deny equal professional services to any person for
When recommending real estate products or services (e.g., reasons of race, color, religion, sex, handicap, familial status, or
homeowner’s insurance, warranty programs, mortgage financing, title national origin. REALTORS® shall not be parties to any plan or
insurance, etc.), REALTORS® shall disclose to the client or customer to agreement to discriminate against a person or persons on the basis of
whom the recommendation is made any financial benefits or fees, other race, color, religion, sex, handicap, familial status, or national origin.
than real estate referral fees, the REALTOR® or REALTOR®’s firm may (Amended 1/90)
receive as a direct result of such recommendation. (Amended 1/99)
REALTORS®, in their real estate employment practices, shall not
• Standard of Practice 6-1 discriminate against any person or persons on the basis of race, color,
REALTORS® shall not recommend or suggest to a client or a customer religion, sex, handicap, familial status, or national origin.
the use of services of another organization or business entity in which (Amended 1/00)
they have a direct interest without disclosing such interest at the time
of the recommendation or suggestion. (Amended 5/88) • Standard of Practice 10-1
When involved in the sale or lease of a residence, REALTORS® shall
not volunteer information regarding the racial, religious or ethnic
Article 7 composition of any neighborhood nor shall they engage in any activity
In a transaction, REALTORS® shall not accept compensation from more which may result in panic selling, however, REALTORS® may provide
than one party, even if permitted by law, without disclosure to all other demographic information. (Adopted 1/94, Amended 1/06)
parties and the informed consent of the REALTOR®’s client or clients.
(Amended 1/93) • Standard of Practice 10-2
When not involved in the sale or lease of a residence, REALTORS® may
provide demographic information related to a property, transaction or
Article 8 professional assignment to a party if such demographic information is
(a) deemed by the REALTOR® to be needed to assist with or complete,
REALTORS® shall keep in a special account in an appropriate financial
in a manner consistent with Article 10, a real estate transaction or
institution, separated from their own funds, monies coming into their
professional assignment and (b) is obtained or derived from a
possession in trust for other persons, such as escrows, trust funds,
recognized, reliable, independent, and impartial source. The source of
clients’ monies, and other like items.
such information and any additions, deletions, modifications,
interpretations, or other changes shall be disclosed in reasonable
detail. (Adopted 1/05, Renumbered 1/06)
Article 9
REALTORS®, for the protection of all parties, shall assure whenever • Standard of Practice 10-3
possible that all agreements related to real estate transactions including, REALTORS® shall not print, display or circulate any statement or
but not limited to, listing and representation agreements, purchase advertisement with respect to selling or renting of a property that
contracts, and leases are in writing in clear and understandable indicates any preference, limitations or discrimination based on race,
language expressing the specific terms, conditions, obligations and color, religion, sex, handicap, familial status, or national origin.
commitments of the parties. A copy of each agreement shall be (Adopted 1/94, Renumbered 1/05 and 1/06)
furnished to each party to such agreements upon their signing or
initialing. (Amended 1/04)

As used in Article 10 “real estate employment practices” relates to • Standard of Practice 11-4
employees and independent contractors providing real estate-related The competency required by Article 11 relates to services contracted
services and the administrative and clerical staff directly supporting for between REALTORS® and their clients or customers; the duties
those individuals. (Adopted 1/00, Renumbered 1/05 and 1/06) expressly imposed by the Code of Ethics; and the duties imposed by
law or regulation. (Adopted 1/02)

Article 11
The services which REALTORS® provide to their clients and customers Article 12
shall conform to the standards of practice and competence which are REALTORS® shall be honest and truthful in their real estate
reasonably expected in the specific real estate disciplines in which they communications and shall present a true picture in their advertising,
engage; specifically, residential real estate brokerage, real property marketing, and other representations. REALTORS® shall ensure that their
management, commercial and industrial real estate brokerage, real status as real estate professionals is readily apparent in their
estate appraisal, real estate counseling, real estate syndication, real advertising, marketing, and other representations, and that the
estate auction, and international real estate. recipients of all real estate communications are, or have been, notified
that those communications are from a real estate professional.
REALTORS® shall not undertake to provide specialized professional (Amended 1/08)
services concerning a type of property or service that is outside their
field of competence unless they engage the assistance of one who is • Standard of Practice 12-1
competent on such types of property or service, or unless the facts are REALTORS® may use the term “free” and similar terms in their
fully disclosed to the client. Any persons engaged to provide such advertising and in other representations provided that all terms
assistance shall be so identified to the client and their contribution to governing availability of the offered product or service are clearly
the assignment should be set forth. (Amended 1/95) disclosed at the same time. (Amended 1/97)

When REALTORS® prepare opinions of real property value or price, REALTORS® may represent their services as “free” or without cost
other than in pursuit of a listing or to assist a potential purchaser in even if they expect to receive compensation from a source other than
formulating a purchase offer, such opinions shall include the their client provided that the potential for the REALTOR® to obtain a
following: benefit from a third party is clearly disclosed at the same time.
1) identification of the subject property (Amended 1/97)
2) date prepared
3) defined value or price • Standard of Practice 12-3
4) limiting conditions, including statements of purpose(s) and The offering of premiums, prizes, merchandise discounts or other
intended user(s) inducements to list, sell, purchase, or lease is not, in itself, unethical
5) any present or contemplated interest, including the possibility of even if receipt of the benefit is contingent on listing, selling,
representing the seller/landlord or buyers/tenants purchasing, or leasing through the REALTOR® making the offer.
6) basis for the opinion, including applicable market data However, REALTORS® must exercise care and candor in any such
7) if the opinion is not an appraisal, a statement to that effect advertising or other public or private representations so that any party
(Amended 1/01) interested in receiving or otherwise benefiting from the REALTOR®’s
offer will have clear, thorough, advance understanding of all the terms
• Standard of Practice 11-2 and conditions of the offer. The offering of any inducements to do
The obligations of the Code of Ethics in respect of real estate business is subject to the limitations and restrictions of state law and
disciplines other than appraisal shall be interpreted and applied in the ethical obligations established by any applicable Standard of
accordance with the standards of competence and practice which Practice. (Amended 1/95)
clients and the public reasonably require to protect their rights and
interests considering the complexity of the transaction, the availability • Standard of Practice 12-4
of expert assistance, and, where the REALTOR® is an agent or subagent, REALTORS® shall not offer for sale/lease or advertise property without
the obligations of a fiduciary. (Adopted 1/95) authority. When acting as listing brokers or as subagents, REALTORS®
shall not quote a price different from that agreed upon with the
• Standard of Practice 11-3 seller/landlord. (Amended 1/93)
When REALTORS® provide consultive services to clients which involve
advice or counsel for a fee (not a commission), such advice shall be • Standard of Practice 12-5
rendered in an objective manner and the fee shall not be contingent on REALTORS® shall not advertise nor permit any person employed by or
the substance of the advice or counsel given. If brokerage or affiliated with them to advertise listed property in any medium (e.g.,
transaction services are to be provided in addition to consultive electronically, print, radio, television, etc.) without disclosing the
services, a separate compensation may be paid with prior agreement name of that REALTOR®’s firm in a reasonable and readily apparent
between the client and REALTOR®. (Adopted 1/96) manner. (Adopted 11/86, Amended 1/07)

• Standard of Practice 12-6 Article 13
REALTORS®, when advertising unlisted real property for sale/lease in REALTORS® shall not engage in activities that constitute the
which they have an ownership interest, shall disclose their status as unauthorized practice of law and shall recommend that legal counsel be
both owners/landlords and as REALTORS® or real estate licensees. obtained when the interest of any party to the transaction requires it.
(Amended 1/93)

Only REALTORS® who participated in the transaction as the listing
Article 14
If charged with unethical practice or asked to present evidence or to
broker or cooperating broker (selling broker) may claim to have
cooperate in any other way, in any professional standards proceeding or
“sold” the property. Prior to closing, a cooperating broker may
investigation, REALTORS® shall place all pertinent facts before the
post a “sold” sign only with the consent of the listing broker.
proper tribunals of the Member Board or affiliated institute, society, or
(Amended 1/96)
council in which membership is held and shall take no action to disrupt
or obstruct such processes. (Amended 1/99)
The obligation to present a true picture in representations to the
public includes information presented, provided, or displayed on
REALTORS® shall not be subject to disciplinary proceedings in more
REALTORS®’ websites. REALTORS® shall use reasonable efforts to
than one Board of REALTORS® or affiliated institute, society, or
ensure that information on their websites is current. When it becomes
council in which they hold membership with respect to alleged
apparent that information on a REALTOR®’s website is no longer
violations of the Code of Ethics relating to the same transaction or
current or accurate, REALTORS® shall promptly take corrective action.
event. (Amended 1/95)
(Adopted 1/07)
REALTORS® shall not make any unauthorized disclosure or
REALTOR® firm websites shall disclose the firm’s name and state(s) of
dissemination of the allegations, findings, or decision developed in
licensure in a reasonable and readily apparent manner.
connection with an ethics hearing or appeal or in connection with an
arbitration hearing or procedural review. (Amended 1/92)
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
REALTORS® shall not obstruct the Board’s investigative or professional
readily apparent manner. (Adopted 1/07)
standards proceedings by instituting or threatening to institute actions
for libel, slander, or defamation against any party to a professional
• Standard of Practice 12-10 standards proceeding or their witnesses based on the filing of an
REALTORS®’ obligation to present a true picture in their advertising arbitration request, an ethics complaint, or testimony given before any
and representations to the public includes the URLs and domain tribunal. (Adopted 11/87, Amended 1/99)
names they use, and prohibits REALTORS® from:
1) engaging in deceptive or unauthorized framing of real estate
brokerage websites;
REALTORS® shall not intentionally impede the Board’s investigative or
2) manipulating (e.g., presenting content developed by others) listing
disciplinary proceedings by filing multiple ethics complaints based on
content in any way that produces a deceptive or misleading result;
the same event or transaction. (Adopted 11/88)
or
3) deceptively using metatags, keywords or other devices/ methods to
direct, drive, or divert Internet traffic, or to otherwise mislead
consumers. (Adopted 1/07)
Duties to REALTORS®
REALTORS® intending to share or sell consumer information gathered Article 15
via the Internet shall disclose that possibility in a reasonable and REALTORS® shall not knowingly or recklessly make false or misleading
readily apparent manner. (Adopted 1/07) statements about competitors, their businesses, or their business
practices. (Amended 1/92)
REALTORS® shall not: • Standard of Practice 15-1
1) use URLs or domain names that present less than a true picture, REALTORS® shall not knowingly or recklessly file false or unfounded
or ethics complaints. (Adopted 1/00)
2) register URLs or domain names which, if used, would present less
than a true picture. (Adopted 1/08) • Standard of Practice 15-2
The obligation to refrain from making false or misleading statements
• Standard of Practice 12-13 about competitors’ businesses and competitors’ business practices
The obligation to present a true picture in advertising, marketing, and includes the duty to not knowingly or recklessly repeat, retransmit, or
representations allows REALTORS® to use and display only republish false or misleading statements made by others. This duty
professional designations, certifications, and other credentials to applies whether false or misleading statements are repeated in person,
which they are legitimately entitled. (Adopted 1/08) in writing, by technological means (e.g., the Internet), or by any other
means. (Adopted 1/07)

Article 16 • Standard of Practice 16-4
REALTORS® shall not engage in any practice or take any action REALTORS® shall not solicit a listing which is currently listed
inconsistent with exclusive representation or exclusive brokerage exclusively with another broker. However, if the listing broker, when
relationship agreements that other REALTORS® have with clients. asked by the REALTOR®, refuses to disclose the expiration date and
(Amended 1/04) nature of such listing; i.e., an exclusive right to sell, an exclusive
agency, open listing, or other form of contractual agreement between
• Standard of Practice 16-1 the listing broker and the client, the REALTOR® may contact the owner
Article 16 is not intended to prohibit aggressive or innovative business to secure such information and may discuss the terms upon which the
practices which are otherwise ethical and does not prohibit REALTOR® might take a future listing or, alternatively, may take a
disagreements with other REALTORS® involving commission, fees, listing to become effective upon expiration of any existing exclusive
compensation or other forms of payment or expenses. (Adopted 1/93, listing. (Amended 1/94)
Amended 1/95)
• Standard of Practice 16-2 REALTORS® shall not solicit buyer/tenant agreements from buyers/
Article 16 does not preclude REALTORS® from making general tenants who are subject to exclusive buyer/tenant agreements.
announcements to prospects describing their services and the terms of However, if asked by a REALTOR®, the broker refuses to disclose the
their availability even though some recipients may have entered into expiration date of the exclusive buyer/tenant agreement, the
agency agreements or other exclusive relationships with another REALTOR® may contact the buyer/tenant to secure such information
REALTOR®. A general telephone canvass, general mailing or and may discuss the terms upon which the REALTOR® might enter into
distribution addressed to all prospects in a given geographical area or a future buyer/tenant agreement or, alternatively, may enter into a
in a given profession, business, club, or organization, or other buyer/tenant agreement to become effective upon the expiration of
classification or group is deemed “general” for purposes of this any existing exclusive buyer/tenant agreement. (Adopted 1/94,
standard. (Amended 1/04) Amended 1/98)

Article 16 is intended to recognize as unethical two basic types of • Standard of Practice 16-6
solicitations: 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
First, telephone or personal solicitations of property owners who have
initiated such discussions, they may discuss the terms upon which
been identified by a real estate sign, multiple listing compilation, or
they might enter into a future agreement or, alternatively, may enter
other information service as having exclusively listed their property
into an agreement which becomes effective upon expiration of any
with another REALTOR®; and
existing exclusive agreement. (Amended 1/98)
Second, mail or other forms of written solicitations of prospects
whose properties are exclusively listed with another REALTOR® when
The fact that a prospect has retained a REALTOR® as an exclusive
such solicitations are not part of a general mailing but are directed
representative or exclusive broker in one or more past transactions
specifically to property owners identified through compilations of
does not preclude other REALTORS® from seeking such prospect’s
current listings, “for sale” or “for rent” signs, or other sources of
future business. (Amended 1/04)
information required by Article 3 and Multiple Listing Service rules to
be made available to other REALTORS® under offers of subagency or
cooperation. (Amended 1/04) • 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
Article 16 does not preclude REALTORS® from contacting the client of
agreement. (Amended 1/98)
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 • Standard of Practice 16-9
management as opposed to brokerage) or from offering the same type REALTORS®, prior to entering into a representation agreement, have an
of service for property not subject to other brokers’ exclusive affirmative obligation to make reasonable efforts to determine
agreements. However, information received through a Multiple whether the prospect is subject to a current, valid exclusive agreement
Listing Service or any other offer of cooperation may not be used to to provide the same type of real estate service. (Amended 1/04)
target clients of other REALTORS® to whom such offers to provide
services may be made. (Amended 1/04) • Standard of Practice 16-10
REALTORS®, acting as buyer or tenant representatives or brokers, shall
disclose that relationship to the seller/landlord’s representative or
broker at first contact and shall provide written confirmation of that
disclosure to the seller/landlord’s representative or broker not later
than execution of a purchase agreement or lease. (Amended 1/04)

On unlisted property, REALTORS® acting as buyer/tenant REALTORS®, acting as subagents or as buyer/tenant representatives or
representatives or brokers shall disclose that relationship to the brokers, shall not attempt to extend a listing broker’s offer of
seller/landlord at first contact for that buyer/tenant and shall provide cooperation and/or compensation to other brokers without the consent
written confirmation of such disclosure to the seller/landlord not later of the listing broker. (Amended 1/04)
than execution of any purchase or lease agreement. (Amended 1/04)
REALTORS® shall make any request for anticipated compensation from REALTORS® shall not use information obtained from listing brokers
the seller/landlord at first contact. (Amended 1/98) through offers to cooperate made through multiple listing services or
through other offers of cooperation to refer listing brokers’ clients to
• Standard of Practice 16-12 other brokers or to create buyer/tenant relationships with listing
REALTORS®, acting as representatives or brokers of sellers/ landlords brokers’ clients, unless such use is authorized by listing brokers.
or as subagents of listing brokers, shall disclose that relationship to (Amended 1/02)
buyers/tenants as soon as practicable and shall provide written
confirmation of such disclosure to buyers/tenants not later than • Standard of Practice 16-19
execution of any purchase or lease agreement. (Amended 1/04) Signs giving notice of property for sale, rent, lease, or exchange shall
not be placed on property without consent of the seller/landlord.
• Standard of Practice 16-13 (Amended 1/93)
All dealings concerning property exclusively listed, or with
buyer/tenants who are subject to an exclusive agreement shall be • Standard of Practice 16-20
carried on with the client’s representative or broker, and not with the REALTORS®, prior to or after terminating their relationship with their
client, except with the consent of the client’s representative or broker current firm, shall not induce clients of their current firm to cancel
or except where such dealings are initiated by the client. exclusive contractual agreements between the client and that firm.
This does not preclude REALTORS® (principals) from establishing
Before providing substantive services (such as writing a purchase agreements with their associated licensees governing assignability of
offer or presenting a CMA) to prospects, REALTORS® shall ask exclusive agreements. (Adopted 1/98)
prospects whether they are a party to any exclusive representation
agreement. REALTORS® shall not knowingly provide substantive
services concerning a prospective transaction to prospects who are Article 17
parties to exclusive representation agreements, except with the consent In the event of contractual disputes or specific non-contractual disputes
of the prospects’ exclusive representatives or at the direction of as defined in Standard of Practice 17-4 between REALTORS®
prospects. (Adopted 1/93, Amended 1/04) (principals) associated with different firms, arising out of their
relationship as REALTORS®, the REALTORS® shall submit the dispute to
• Standard of Practice 16-14 arbitration in accordance with the regulations of their Board or Boards
REALTORS® are free to enter into contractual relationships or to rather than litigate the matter.
negotiate with sellers/landlords, buyers/tenants or others who are not
subject to an exclusive agreement but shall not knowingly obligate In the event clients of REALTORS® wish to arbitrate contractual disputes
them to pay more than one commission except with their informed arising out of real estate transactions, REALTORS® shall arbitrate those
consent. (Amended 1/98) disputes in accordance with the regulations of their Board, provided the
clients agree to be bound by the decision.
In cooperative transactions REALTORS® shall compensate cooperating The obligation to participate in arbitration contemplated by this Article
REALTORS® (principal brokers) and shall not compensate nor offer to includes the obligation of REALTORS® (principals) to cause their firms
compensate, directly or indirectly, any of the sales licensees employed to arbitrate and be bound by any award. (Amended 1/01)
by or affiliated with other REALTORS® without the prior express
knowledge and consent of the cooperating broker.
The filing of litigation and refusal to withdraw from it by REALTORS®
• Standard of Practice 16-16 in an arbitrable matter constitutes a refusal to arbitrate. (Adopted 2/86)
REALTORS®, acting as subagents or buyer/tenant representatives 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
Article 17 does not require REALTORS® to arbitrate in those
buyer/tenant representatives or brokers nor make the submission of an
circumstances when all parties to the dispute advise the Board
executed offer to purchase/lease contingent on the listing broker’s
in writing that they choose not to arbitrate before the Board.
agreement to modify the offer of compensation. (Amended 1/04)
(Amended 1/93)

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)
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 4) Where two or more listing brokers claim entitlement to
another cooperating broker subsequently claims to be the procuring compensation pursuant to open listings with a seller or landlord
cause of the sale or lease. In such cases the complainant may name who agrees to participate in arbitration (or who requests
the first cooperating broker as respondent and arbitration may arbitration) and who agrees to be bound by the decision. In cases
proceed without the listing broker being named as a respondent. where one of the listing brokers has been compensated by the seller
When arbitration occurs between two (or more) cooperating or landlord, the other listing broker, as complainant, may name the
brokers and where the listing broker is not a party, the amount in first listing broker as respondent and arbitration may proceed
dispute and the amount of any potential resulting award is limited between the brokers. (Adopted 1/97)
to the amount paid to the respondent by the listing broker and any
amount credited or paid to a party to the transaction at the direction 5) Where a buyer or tenant representative is compensated by the seller
of the respondent. Alternatively, if the complaint is brought against or landlord, and not by the listing broker, and the listing broker, as
the listing broker, the listing broker may name the first cooperating a result, reduces the commission owed by the seller or landlord
broker as a third-party respondent. In either instance the decision of and, subsequent to such actions, claims to be the procuring cause of
the hearing panel as to procuring cause shall be conclusive with sale or lease. In such cases arbitration shall be between the listing
respect to all current or subsequent claims of the parties for broker and the buyer or tenant representative and the amount in
compensation arising out of the underlying cooperative transaction. dispute is limited to the amount of the reduction of commission to
(Adopted 1/97, Amended 1/07) which the listing broker agreed. (Adopted 1/05)

2) Where a buyer or tenant representative is compensated by the seller • Standard of Practice 17-5
or landlord, and not by the listing broker, and the listing broker, as The obligation to arbitrate established in Article 17 includes disputes
a result, reduces the commission owed by the seller or landlord between REALTORS® (principals) in different states in instances where,
and, subsequent to such actions, another cooperating broker claims absent an established inter-association arbitration agreement, the
to be the procuring cause of sale or lease. In such cases the REALTOR® (principal) requesting arbitration agrees to submit to the
complainant may name the first cooperating broker as respondent jurisdiction of, travel to, participate in, and be bound by any resulting
and arbitration may proceed without the listing broker being named award rendered in arbitration conducted by the respondent(s)
as a respondent. When arbitration occurs between two (or more) REALTOR®’s association, in instances where the respondent(s)
cooperating brokers and where the listing broker is not a party, the REALTOR®’s association determines that an arbitrable issue exists.
amount in dispute and the amount of any potential resulting award (Adopted 1/07)
is limited to the amount paid to the respondent by the seller or
landlord and any amount credited or paid to a party to the
transaction at the direction of the respondent. Alternatively, if the The Code of Ethics was adopted in 1913. Amended at the Annual
complaint is brought against the listing broker, the listing broker Convention in 1924, 1928, 1950, 1951, 1952, 1955, 1956, 1961, 1962,
may name the first cooperating broker as a third-party respondent. 1974, 1982, 1986, 1987, 1989, 1990, 1991, 1992, 1993, 1994, 1995,
In either instance the decision of the hearing panel as to procuring 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006,
cause shall be conclusive with respect to all current or subsequent 2007 and 2008.
claims of the parties for compensation arising out of the underlying
cooperative transaction. (Adopted 1/97, Amended 1/07)
3) Where a buyer or tenant representative is compensated by the buyer
or tenant and, as a result, the listing broker reduces the commission Explanatory Notes
owed by the seller or landlord and, subsequent to such actions, The reader should be aware of the following policies which have been
another cooperating broker claims to be the procuring cause of sale approved by the Board of Directors of the National Association:
or lease. In such cases the complainant may name the first
cooperating broker as respondent and arbitration may proceed In filing a charge of an alleged violation of the Code of Ethics by a
without the listing broker being named as a respondent. REALTOR®, the charge must read as an alleged violation of one or more
Alternatively, if the complaint is brought against the listing broker, Articles of the Code. Standards of Practice may be cited in support of
the listing broker may name the first cooperating broker as a third- the charge.
party respondent. In either instance the decision of the hearing
panel as to procuring cause shall be conclusive with respect to all The Standards of Practice serve to clarify the ethical obligations
current or subsequent claims of the parties for compensation imposed by the various Articles and supplement, and do not substitute
arising out of the underlying cooperative transaction. (Adopted for, the Case Interpretations in Interpretations of the Code of Ethics.
1/97)
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.

© 2009, NATIONAL ASSOCIATION OF REALTORS®, All Rights Reserved
Form No. 166-288 (12/08)

Matthew Rathbun's Mocking Hearing Handout

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