presentation 2013 ethics_seminar

The REALTORThe REALTOR®® Code of EthicsCode of Ethics

Ethics TrainingEthics Training

• Describe the history of the CodeDescribe the history of the Code• Identify the role of the “Golden Rule” in the Identify the role of the “Golden Rule” in the

CodeCode• Categorize articlesCategorize articles• Describe the Code’s structureDescribe the Code’s structure• List commonly cited Articles in complaintsList commonly cited Articles in complaints

Course ObjectivesCourse Objectives

Course ObjectivesCourse Objectives

• Stress importance of Articles 1, 2, 3, 9, 12, and Stress importance of Articles 1, 2, 3, 9, 12, and 1616

• Use case studies to identify possible Code Use case studies to identify possible Code violationsviolations

• Describe the professional standards Describe the professional standards enforcement processenforcement process

• Discuss mediation as a member serviceDiscuss mediation as a member service• Review the “Pathways to Professionalism”Review the “Pathways to Professionalism”

Time for a Test!Time for a Test!

Spirit of the CodeSpirit of the Code

"The real estate agent should be absolutely honest, truthful, faithful and efficient. He should bear in mind that he is an employee -- that his client is his employer and is entitled to the best service the real estate man can give -- his information, talent, time, services, loyalty, confidence and fidelity."

Sections of the CodeSections of the Code

• Duties to clients and customersDuties to clients and customersArticles 1-9Articles 1-9

• Duties to the publicDuties to the publicArticles 10-14Articles 10-14

• Duties to other Realtors®Duties to other Realtors®Articles 15-17Articles 15-17

TermsTerms

• ClientClient – – The person(s) or entity (ies) with The person(s) or entity (ies) with whom a REALTOR® or a REALTOR®’s firm has whom a REALTOR® or a REALTOR®’s firm has an agency or legally recognized non-agency an agency or legally recognized non-agency relationshiprelationship

• CustomerCustomer – – A party to a real estate A party to a real estate transaction who receives information, services transaction who receives information, services or benefits, but has no contractual relationship or benefits, but has no contractual relationship with the REALTOR® or the REALTOR®’s firmwith the REALTOR® or the REALTOR®’s firm

TermsTerms

• Informed ConsentInformed Consent – – A person’s approval A person’s approval based on a full disclosure of facts needed to based on a full disclosure of facts needed to make the decision intelligently (i.e., knowledge make the decision intelligently (i.e., knowledge of liability involved, alternatives, etc.)of liability involved, alternatives, etc.)

TermsTerms

• AgentAgent – – A real estate licensee (including A real estate licensee (including brokers and sales associates) acting in an brokers and sales associates) acting in an agency relationship as defined by state law or agency relationship as defined by state law or regulationregulation

TermsTerms

• ProspectProspect – – A purchaser, seller, tenant, or A purchaser, seller, tenant, or landlord who is not subject to a representation landlord who is not subject to a representation relationship with the REALTOR® or REALTOR®’s relationship with the REALTOR® or REALTOR®’s firm (Standard of Practice 1-2; Amended 1/04)firm (Standard of Practice 1-2; Amended 1/04)

PreamblePreamble

““Under all is the land. Upon its wise utilization Under all is the land. Upon its wise utilization and widely allocated ownership depend the and widely allocated ownership depend the survival and growth of free institutions and of survival and growth of free institutions and of our civilization . . . .” our civilization . . . .”

Article 1Article 1

"When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly." (Amended 1/01)

Standard of Practice 1-15Standard of Practice 1-15

“ “REALTORS®, in response to inquiries from REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of sellers’ approval, disclose the existence of offers on the property. Where disclosure is offers on the property. Where disclosure is authorized, REALTORS® shall also disclose, if authorized, REALTORS® shall also disclose, if asked, whether offers were obtained by the asked, whether offers were obtained by the listing licensee, another licensee in the listing listing licensee, another licensee in the listing firm, or by a cooperating broker. “ (Adopted firm, or by a cooperating broker. “ (Adopted 1/03, Amended 1/09)1/03, Amended 1/09)

Standard of Practice 1-16 Standard of Practice 1-16

“REALTORS® shall not access or use, or permit or enable others to access or use, listed or managed property on terms or conditions other than those authorized by the owner or seller.” (Adopted 1/12)

Case Interpretation 1-28

Class ExerciseClass Exercise

Article 2Article 2

"REALTORS® shall avoid exaggeration, "REALTORS® shall avoid exaggeration, misrepresentation, or concealment of misrepresentation, or concealment of pertinent facts relating to the property or the pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be transaction. REALTORS® shall not, however, be obligated to discover latent defects in the obligated to discover latent defects in the property, to advise on matters outside the property, to advise on matters outside the scope of their real estate license or to disclose scope of their real estate license or to disclose facts which are confidential under the scope of facts which are confidential under the scope of agency or non-agency relationships as defined agency or non-agency relationships as defined by state law.“ (Amended 1/00) by state law.“ (Amended 1/00)


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

Case Interpretation 2-4


Article 3Article 3

"REALTORS® shall cooperate with other brokers "REALTORS® shall cooperate with other brokers except when cooperation is not in the client's except when cooperation is not in the client's best interest. The obligation to cooperate best interest. The obligation to cooperate does not include the obligation to share does not include the obligation to share commissions, fees, or to otherwise commissions, fees, or to otherwise compensate another broker." (Amended 1/95)compensate another broker." (Amended 1/95)


“ “To be effective, any change in compensation To be effective, any change in compensation offered for cooperative services must be offered for cooperative services must be communicated to the other REALTOR® prior to communicated to the other REALTOR® prior to the time that REALTOR® submits an offer to the time that REALTOR® submits an offer to purchase/lease the property.” (Amended purchase/lease the property.” (Amended 1/10)1/10)


“ “When seeking information from another When seeking information from another REALTOR® concerning property under a REALTOR® concerning property under a management or listing agreement, Realtors® management or listing agreement, Realtors® shall disclose their Realtor® status and shall disclose their Realtor® status and whether their interest is personal or on behalf whether their interest is personal or on behalf of a client and, if on behalf of a client, their of a client and, if on behalf of a client, their relationship with the client.”(Amended 1/11)relationship with the client.”(Amended 1/11)


“ “REALTORS® shall not provide access to listed REALTORS® shall not provide access to listed property on terms other than those property on terms other than those established by the owner or the listing broker.” established by the owner or the listing broker.” (Adopted 1/10)(Adopted 1/10)


““The duty to cooperate established in Article 3 The duty to cooperate established in Article 3 relates to the obligation to share information on relates to the obligation to share information on listed property, and to make property available listed property, and to make property available to other brokers for showing to prospective to other brokers for showing to prospective purchasers/tenants when it is in the best purchasers/tenants when it is in the best interests of sellers/landlords.” (Adopted 1/11)interests of sellers/landlords.” (Adopted 1/11)

Class ExerciseClass ExerciseCase Interpretation 3-10Case Interpretation 3-10

Article 4Article 4““REALTORS® shall not acquire an interest in or buy or REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their present offers from themselves, any member of their immediate families, their firms or any member immediate families, their firms or any member thereof, or any entities in which they have any thereof, or any entities in which they have any ownership interest, any real property, without ownership interest, any real property, without making their true position known to the owner or the making their true position known to the owner or the owner's agent or broker. In selling property they owner's agent or broker. In selling property they own, or in which they have any interest, REALTORS® own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to shall reveal their ownership or interest in writing to the purchaser or the purchaser's representative." the purchaser or the purchaser's representative." (Amended 1/00) (Amended 1/00)

Immediate FamilyImmediate Family

“ “As used in the Code of Ethics, the term As used in the Code of Ethics, the term 'immediate family' includes, but is not limited 'immediate family' includes, but is not limited to, the REALTOR® and the REALTOR®'s spouse to, the REALTOR® and the REALTOR®'s spouse and their siblings, parents, grandparents, and their siblings, parents, grandparents, children (by birth or adoption), grandchildren children (by birth or adoption), grandchildren and other descendants." and other descendants."

Article 5Article 5

“ “REALTORS® shall not undertake to provide REALTORS® shall not undertake to provide professional services concerning a property or professional services concerning a property or its value where they have a present or its value where they have a present or contemplated interest unless such interest is contemplated interest unless such interest is specifically disclosed to all affected parties." specifically disclosed to all affected parties."

Article 6Article 6““REALTORS® shall not accept any commission, REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their rebate, or profit on expenditures made for their client, without the client’s knowledge and consent.client, without the client’s knowledge and consent.

When recommending real estate products or When recommending real estate products or services (e.g., homeowner’s insurance, warranty services (e.g., homeowner’s insurance, warranty programs, mortgage financing, tile insurance, etc.), programs, mortgage financing, tile insurance, etc.), REALTORS® shall disclose to the client or customer REALTORS® shall disclose to the client or customer to whom the recommendation is made any to whom the recommendation is made any financial benefits or fees, other than real estate financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR’S® firm referral fees, the REALTOR® or REALTOR’S® firm may receive as a direct result of such may receive as a direct result of such recommendation.” (Amended 1/99) recommendation.” (Amended 1/99)

Article 7Article 7

“In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR’S® client or clients.” (Amended 1/93)

Article 8Article 8

“ “REALTORS® shall keep in a special account in REALTORS® shall keep in a special account in an appropriate financial institution, separated an appropriate financial institution, separated from their own funds, monies coming into from their own funds, monies coming into their possession in trust for other persons, their possession in trust for other persons, such as escrows, trust funds, clients' monies, such as escrows, trust funds, clients' monies, and other like items."and other like items."

Article 9Article 9 ““REALTORS®, for the protection of all parties, shall REALTORS®, for the protection of all parties, shall

assure whenever possible that agreements related assure whenever possible that agreements related to real estate transactions including, but not to real estate transactions including, but not limited to, listing and representation agreements, limited to, listing and representation agreements, purchase contracts and leases are in writing, in purchase contracts and leases are in writing, in clear and understandable language expressing the clear and understandable language expressing the specific terms, conditions, obligations and specific terms, conditions, obligations and commitments of the parties. A copy of each commitments of the parties. A copy of each agreement shall be furnished to each party to such agreement shall be furnished to each party to such agreements upon their signing or initialing.”agreements upon their signing or initialing.” (Amended 1/04) (Amended 1/04)

Article 10Article 10"REALTORS® shall not deny equal professional "REALTORS® shall not deny equal professional services to any person for reasons of race, color, services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin religion, sex, handicap, familial status, national origin or sexual orientation. REALTORS® shall not be a party or sexual orientation. REALTORS® shall not be a party to any plan or agreement to discriminate against a to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin or sex, handicap, familial status, national origin or sexual orientation.sexual orientation.

REALTORS®, in their general real estate employment REALTORS®, in their general real estate employment practices, shall not discriminate against any person practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, or persons on the basis of race, color, religion, sex, handicap, familial status, national origin or sexual handicap, familial status, national origin or sexual orientation." orientation." (Amended 1/11)(Amended 1/11)

Standard of Practice 10-1Standard of Practice 10-1““When involved in the sale or lease of aWhen involved in the sale or lease of aresidence, REALTORS® shall not volunteerresidence, REALTORS® shall not volunteerinformation regarding the racial, religious orinformation regarding the racial, religious orethnic composition of any neighborhood norethnic composition of any neighborhood norshall they engage in any activity which mayshall they engage in any activity which mayresult in panic selling; however, REALTORS® mayresult in panic selling; however, REALTORS® mayprovide other demographic information.”provide other demographic information.”(Adopted 1/94, Amended 1/06)(Adopted 1/94, Amended 1/06)


““Realtors® shall not print, display or circulate any Realtors® shall not print, display or circulate any statement or advertisement with respect to selling statement or advertisement with respect to selling or renting of a property that indicates any or renting of a property that indicates any preference, limitations or discrimination based on preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, race, color, religion, sex, handicap, familial status, national origin, or sexual orientation.” national origin, or sexual orientation.” (Amended (Amended 1/11)1/11)

Article 11Article 11

““The services which REALTORS® provide to their The services which REALTORS® provide to their clients and customers shall conform to the standards clients and customers shall conform to the standards of practice and competence which are reasonably of practice and competence which are reasonably expected in the specific real estate disciplines in expected in the specific real estate disciplines in which they engage; specifically, residential real estate which they engage; specifically, residential real estate brokerage, real property management, commercial brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real real estate appraisal, real estate counseling, real estate syndication, real estate auction, and estate syndication, real estate auction, and international real estate.international real estate.

Article 11 Article 11 (cont’d.)(cont’d.)

““REALTORS® shall not undertake to provide REALTORS® shall not undertake to provide specialized professional services concerning a type of specialized professional services concerning a type of property or service that is outside their field of property or service that is outside their field of competence unless they engage the assistance of one competence unless they engage the assistance of one who is competent on such types of property or who is competent on such types of property or service, or unless the facts are fully disclosed to the service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such client. Any persons engaged to provide such assistance shall be so identified to the client and their assistance shall be so identified to the client and their contribution to the assignment should be set forth.”contribution to the assignment should be set forth.”

(Amended 1/10)(Amended 1/10)


““When REALTORSWhen REALTORS®® prepare opinions of real property prepare opinions of real property value or price, other than in pursuit of a listing or to value or price, other than in pursuit of a listing or to assist a potential purchaser in formulating a assist a potential purchaser in formulating a purchase offer, such opinions shall include the purchase offer, such opinions shall include the following unless the party requesting the opinion following unless the party requesting the opinion requires a specific type of report or different data set:requires a specific type of report or different data set:

Standard of Practice 11-1 Standard of Practice 11-1 (cont’d)(cont’d) 1) identification of the subject property1) identification of the subject property 2) date prepared2) date prepared 3) defined value or price3) defined value or price 4) limiting conditions, including statements of purposes and 4) limiting conditions, including statements of purposes and

intended usersintended users 5) any present or contemplated interest, including the 5) any present or contemplated interest, including the

possibility of representing the seller/landlord or possibility of representing the seller/landlord or buyers/tenantsbuyers/tenants

6) basis for the opinion, including applicable market data6) basis for the opinion, including applicable market data 7) if the opinion is not an appraisal, a statement to 7) if the opinion is not an appraisal, a statement to that effect.” (Amended 1/10)that effect.” (Amended 1/10)


““REALTORSREALTORS shall be honest and truthful in their shall be honest and truthful in their real estate communications and shall present a true real estate communications and shall present a true picture in their advertising, marketing, and other picture in their advertising, marketing, and other representations. REALTORSrepresentations. REALTORS shall ensure that their shall ensure that their status as real estate professionals is readily apparent status as real estate professionals is readily apparent in their advertising, marketing, and other in their advertising, marketing, and other representations, and that the recipients of all real representations, and that the recipients of all real estate communications are, or have been, notified estate communications are, or have been, notified that those communications are from a real estate that those communications are from a real estate professional.” (Amended 1/08)professional.” (Amended 1/08)

Standard of Practice 12-5Standard of Practice 12-5““REALTORSREALTORS®® shall not advertise nor permit any person shall not advertise nor permit any person employed by or affiliated with them to advertise real employed by or affiliated with them to advertise real estate services or listed property in any medium (e.g., estate services or listed property in any medium (e.g., electronically, print, radio, television, etc.) without electronically, print, radio, television, etc.) without disclosing the name of that REALTOR’S® firm in a disclosing the name of that REALTOR’S® firm in a reasonable and readily apparent manner. reasonable and readily apparent manner. This Standard of Practice acknowledges that disclosing the name of the firm may not be practical in electronic displays of limited information (e.g., thumbnails”, text messages, “tweets”, etc.). Such displays are exempt from the disclosure requirement established in the Standard of Practice, but only when linked to a display that includes all required disclosures.” (Adopted 11/86, Amended 1/11)

Standard of Practice 12-10Standard of Practice 12-10“REALTORS®’ obligation to present a true picture in their advertising andrepresentations to the public includes Internet content posted, and URLsand domain names they use, and prohibits REALTORS® from:1) engaging in deceptive or unauthorized framing of real estate

brokerage websites;2) manipulating (e.g., presenting content developed by others) listing and

other content in any way that produces a deceptive or misleading result;

3) deceptively using metatags, keywords or other devices/methods to direct, drive, or divert Internet traffic; or

4) presenting content developed by others without either attribution or without permission, or

5) to otherwise mislead consumers.” (Adopted 1/07, Amended 1/13)


““REALTORSREALTORS shall not: shall not:1. use URLs or domain names that present less 1. use URLs or domain names that present less than a true picture, orthan a true picture, or2. register URLs or domain names which, if used, 2. register URLs or domain names which, if used, would present less than a true picture.” (Adopted would present less than a true picture.” (Adopted 1/08) 1/08)

• Case Interpretation 12-26 • Case Interpretation 12-25



"REALTORS® shall not engage in activities that "REALTORS® shall not engage in activities that constitute the unauthorized practice of law and constitute the unauthorized practice of law and shall recommend that legal counsel be obtained shall recommend that legal counsel be obtained when the interest of any party to the transaction when the interest of any party to the transaction requires it."requires it."


"If charged with unethical practice or asked to "If charged with unethical practice or asked to present evidence or to cooperate in any other present evidence or to cooperate in any other way in any professional standards proceeding or way in any professional standards proceeding or investigation, REALTORS® shall place all pertinent investigation, REALTORS® shall place all pertinent facts before the proper tribunal of the Member facts before the proper tribunal of the Member Board or affiliated Institute, Society, or Council in Board or affiliated Institute, Society, or Council in which membership is held and shall take no which membership is held and shall take no action to disrupt or obstruct such processes." action to disrupt or obstruct such processes." (Amended 1/99)(Amended 1/99)

Article 15 (Amended)Article 15 (Amended)

"REALTORS® shall not knowingly or recklessly "REALTORS® shall not knowingly or recklessly make false or misleading statements about make false or misleading statements about other real estate professionals, their other real estate professionals, their businesses, or their business practices." businesses, or their business practices." (Amended 1/12)(Amended 1/12)

Standard of Practice 15-2 Standard of Practice 15-2 (Amended)(Amended)

““The obligation to refrain from making false or The obligation to refrain from making false or misleading statements about other real estate misleading statements about other real estate professionals, their businesses, and their business professionals, their businesses, and their business practices includes the duty to not knowingly or practices includes the duty to not knowingly or recklessly publish, repeat, retransmit or republish recklessly publish, repeat, retransmit or republish false or misleading statements made by others. This false or misleading statements made by others. This duty applies whether false or misleading statements duty applies whether false or misleading statements are repeated in person, in writing, by technological are repeated in person, in writing, by technological means (e.g. the Internet), or by any other means.”means (e.g. the Internet), or by any other means.”(Adopted 1/07, Amended 1/10 and 1/12) (Adopted 1/07, Amended 1/10 and 1/12)


““The obligation to refrain from making false or The obligation to refrain from making false or misleading statements about other real estate misleading statements about other real estate professionals, their businesses, and their business professionals, their businesses, and their business practices includes the duty to publish a practices includes the duty to publish a clarification about or to remove statements made clarification about or to remove statements made by others on electronic media the REALTORby others on electronic media the REALTOR®® controls once the REALTORcontrols once the REALTOR®® knows the statement knows the statement is false or misleading.” (Adopted 1/10, Amended is false or misleading.” (Adopted 1/10, Amended 1/12) 1/12)


““REALTORS® shall not engage in any practice or REALTORS® shall not engage in any practice or take any action inconsistent with exclusive take any action inconsistent with exclusive representation or exclusive brokerage relationship representation or exclusive brokerage relationship agreements that other REALTORS® have with agreements that other REALTORS® have with clients.” (Amended 1/04) clients.” (Amended 1/04)

Standard of Practice 16-3Standard of Practice 16-3““Article 16 does not preclude REALTORS® from contacting Article 16 does not preclude REALTORS® from contacting the client of another broker for purpose of offering to the client of another broker for purpose of offering to provide, or entering into a contract to provide, a different provide, or entering into a contract to provide, a different type of real estate service unrelated to the type of service type of real estate service unrelated to the type of service currently being provided (e.g., property management as currently being provided (e.g., property management as opposed to brokerage) or from offering the same type of opposed to brokerage) or from offering the same type of service for property not subject to other brokers’ exclusive service for property not subject to other brokers’ exclusive agreements. However, information received through a agreements. However, information received through a Multiple Listing Service or any other offer of cooperation Multiple Listing Service or any other offer of cooperation may not be used to target clients of other REALTORS® to may not be used to target clients of other REALTORS® to whom such offers to provide services may be made.” whom such offers to provide services may be made.” (Amended 1/04)(Amended 1/04)

Standard of Practice 16-13Standard of Practice 16-13““All dealings concerning property exclusively listed, or with buyer/ All dealings concerning property exclusively listed, or with buyer/ tenants who are subject to an exclusive agreement shall be carried on tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client, with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except with the consent of the client’s representative or broker or except where such dealings are initiated by the client.except where such dealings are initiated by the client.

Before providing substantive services (such as writing a purchase offer Before providing substantive services (such as writing a purchase offer or presenting a CMA) to prospects, REALTORS® shall ask prospects or presenting a CMA) to prospects, REALTORS® shall ask prospects whether they are a party to any exclusive representation agreement, whether they are a party to any exclusive representation agreement, REALTORS® shall not knowingly provide substantive services REALTORS® shall not knowingly provide substantive services concerning a prospective transaction to prospects who are parties to concerning a prospective transaction to prospects who are parties to exclusive representation agreements, except with the consent of the exclusive representation agreements, except with the consent of the prospects’ exclusive representatives or at the direction of prospects.” prospects’ exclusive representatives or at the direction of prospects.” (Adopted 1/93, Amended 1/04)(Adopted 1/93, Amended 1/04)

Standard of Practice 16-20Standard of Practice 16-20 “REALTORS®, prior to or after their relationship

with their current firm is terminated, shall not induce clients of their current firm to cancel exclusive contractual agreements between the client and that firm. This does not preclude REALTORS® (principals) from establishing agreements with their associated licensees governing assignability of exclusive agreements.” (Adopted 1/09; Amended 1/10)

•Case Interpretation 16-19

•Case Interpretation 16-20


Article 17 (Article 17 (Amended)Amended)

“ “IIn the event of contractual disputes or specific non-contractual disputes as defined in Standard of Practice 17-4 between REALTORS® (principals) associated with different firms, arising out of their relationship as REALTORS®, the REALTORS® shall mediate the dispute if the Board requires its members to mediate. If the dispute is not resolved through mediation, or if mediation is not required, REALTORS® shall submit the dispute to arbitration in accordance with the policies of the Board rather than litigate the matter.

Article 17 Article 17 (as amended cont’d.)(as amended cont’d.)

In the event clients of REALTORS® wish to mediate or In the event clients of REALTORS® wish to mediate or arbitrate contractual disputes, arising out of real arbitrate contractual disputes, arising out of real estate transactions, REALTORS® shall mediate or estate transactions, REALTORS® shall mediate or arbitrate those disputes in accordance with the arbitrate those disputes in accordance with the policies of the Board, provided the clients agree to be policies of the Board, provided the clients agree to be bound by any resulting agreement or award.bound by any resulting agreement or award.

The obligation to participate in mediation and The obligation to participate in mediation and arbitration contemplated by this Article includes the arbitration contemplated by this Article includes the obligation of REALTORS® (principals) to cause their obligation of REALTORS® (principals) to cause their firms to mediate and arbitrate and be bound by any firms to mediate and arbitrate and be bound by any resulting agreement or award.” (Amended 1/12)resulting agreement or award.” (Amended 1/12)


“Article 17 does not require REALTORS® to mediate in those circumstances when all parties to the dispute advise the Board in writing that they choose not to mediate through the Board’s facilities. The fact that all parties decline to participate in mediation does not relieve REALTORS® of the duty to arbitrate.

Article 17 does not require REALTORS® to arbitrate in those circumstances when all parties to the dispute advise the Board in writing that they choose not to arbitrate before the Board.” (Amended 1/12)

EnforcementEnforcement

• National Association of REALTORS®National Association of REALTORS® has the sole has the sole authority to interpret the Code of Ethics authority to interpret the Code of Ethics

• Virginia Association of REALTORS®Virginia Association of REALTORS® plays a strong plays a strong educational and advisory role. VAR may hold educational and advisory role. VAR may hold hearings as necessary.hearings as necessary.

• Local Association of REALTORSLocal Association of REALTORS® has the primary ® has the primary obligation for enforcement of the Code and the obligation for enforcement of the Code and the education of its members. education of its members.

EnforcementEnforcement

Local Association is Local Association is authorizedauthorized to hold two types to hold two types of hearings:of hearings:

• Ethics hearingsEthics hearings

• Arbitration hearingsArbitration hearings

EnforcementEnforcementAuthorized Sanctions:Authorized Sanctions:• Letter of warningLetter of warning• Letter of reprimandLetter of reprimand• Ethics training or any other appropriate courseEthics training or any other appropriate course• Fine not to exceed $5000Fine not to exceed $5000• ProbationProbation• Suspension of membership (30 days minimum)Suspension of membership (30 days minimum)• Suspension of MLS serviceSuspension of MLS service• ExpulsionExpulsion

ArbitrationArbitration

MandatoryMandatory• REALTOR® Principal vs. REALTOR® PrincipalREALTOR® Principal vs. REALTOR® Principal • REALTOR® Non-Principal vs. REALTOR® Principal REALTOR® Non-Principal vs. REALTOR® Principal

provided complainant’s Principal joins the provided complainant’s Principal joins the complaintcomplaint

• Client vs. REALTOR® Principal provided client Client vs. REALTOR® Principal provided client agrees to abide by any award or decisionagrees to abide by any award or decision

ArbitrationArbitration

VoluntaryVoluntary• REALTORS® within same firmREALTORS® within same firm• REALTOR® Principal vs. Non-Member BrokerREALTOR® Principal vs. Non-Member Broker• Customer vs. REALTOR® Principal provided Customer vs. REALTOR® Principal provided

customer agrees to abide by any award or customer agrees to abide by any award or decisiondecision

MediationMediationAn attempt by parties to resolve monetary disputes An attempt by parties to resolve monetary disputes with the aid of a neutral third party. with the aid of a neutral third party.

A mediator’s role is advisory; and although that A mediator’s role is advisory; and although that person may offer suggestions, resolution of the person may offer suggestions, resolution of the dispute rests with the parties themselves.dispute rests with the parties themselves.

All REALTOR® associations are required to provide All REALTOR® associations are required to provide mediation services.mediation services.

Mediation OptionsMediation Options• Option One: Request for arbitration goes to Grievance Option One: Request for arbitration goes to Grievance

before mediation is offeredbefore mediation is offered• Option Two: Mediation is offered after the Option Two: Mediation is offered after the request request is is

filed but before Grievance reviews itfiled but before Grievance reviews it• Option Three: Mediation may be offered as soon as a Option Three: Mediation may be offered as soon as a

request is received even if not formally filedrequest is received even if not formally filed

• New Optional Procedure: Local associations may now New Optional Procedure: Local associations may now require mediation prior to arbitration for matters require mediation prior to arbitration for matters which are both arbitrable and mandatorywhich are both arbitrable and mandatory

Pathways to ProfessionalismPathways to Professionalism

• Respect for the PublicRespect for the Public– Follow the Golden RuleFollow the Golden Rule– Respond promptly to inquiries and requestsRespond promptly to inquiries and requests– Schedule appointments far in advanceSchedule appointments far in advance– Call if delayed or to cancelCall if delayed or to cancel– Keep listing agent informedKeep listing agent informed– Communicate to all in a timely fashionCommunicate to all in a timely fashion– Handle the unexpectedHandle the unexpected– Leave your card if that is customaryLeave your card if that is customary


• Respect for the Public ( cont’d)Respect for the Public ( cont’d)– Announce yourself before enteringAnnounce yourself before entering– Be a pro in looks as well as deedsBe a pro in looks as well as deeds– Respect “personal space” of occupantsRespect “personal space” of occupants– Don’t criticize house in earshot of occupantsDon’t criticize house in earshot of occupants– Direct clients of others back to their agentDirect clients of others back to their agent– Communicate clearly and avoid slangCommunicate clearly and avoid slang– Respect cultural differencesRespect cultural differences– ““I’m leaving now.”I’m leaving now.”


• Respect for the Public (cont’d)Respect for the Public (cont’d)– Show courtesy to allShow courtesy to all– Meet deadlinesMeet deadlines– Deliver on your promisesDeliver on your promises– Be proud of your “R®”Be proud of your “R®”– Tell only what you know to be trueTell only what you know to be true


• Respect for PropertyRespect for Property– Only go in with permissionOnly go in with permission– You’re responsible for clients and customersYou’re responsible for clients and customers– No unaccompanied buyers in the houseNo unaccompanied buyers in the house– Keep the group togetherKeep the group together– Be considerate of the propertyBe considerate of the property– Leave it as you found it unless obvious problem Leave it as you found it unless obvious problem

that should be reportedthat should be reported

Pathways to ProfessionalismPathways to Professionalism• Respect for PeersRespect for Peers

– Respond to other agents promptlyRespond to other agents promptly– Notify listing broker of inaccurate informationNotify listing broker of inaccurate information– Help the property be shown when possibleHelp the property be shown when possible– Play nice togetherPlay nice together– Avoid both ingratiating and condescending termsAvoid both ingratiating and condescending terms– Don’t prospect at someone else’s “open house”Don’t prospect at someone else’s “open house”– Return keys promptlyReturn keys promptly– Mutual respect is the best reputationMutual respect is the best reputation

ConclusionConclusion

Idealistically, every REALTOR® should carry a copy Idealistically, every REALTOR® should carry a copy of the Code of Ethics with him or her.of the Code of Ethics with him or her.

Realistically, every REALTOR® should take the time Realistically, every REALTOR® should take the time to become more knowledgeable about the Code to become more knowledgeable about the Code of Ethics and the obligations it imposes. of Ethics and the obligations it imposes.

presentation 2013 ethics_seminar

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