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

Effective January 1, 1996
Where the word REALTORS is used in this Code and Preamble, it shall be deemed to include REALTOR-ASSOCIATES.

While the Code of Ethics establishes obligations that may be higher than those mandated by law, in any instance where the Code of Ethics and the law conflict, the obligations of the law must take precedence.

Preamble...
Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. REALTORS should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment.

Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and a patriotic duty to which REALTORS should dedicate themselves, and for which they should be diligent in preparing themselves. REALTORS, therefore, are zealous to maintain and improve the standards of their calling and share with their fellow REALTORS a common responsibility for its integrity and honor.

In recognition and appreciation of their obligations to clients, customers, the public, and each other, REALTORS continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share the fruit of their experience and study with others. They identify and take steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession.

Realizing that cooperation with other real estate professionals promotes the best interests of those who utilize their services, REALTORS urge exclusive representation of clients; do not attempt to gain any unfair advantage over their competitors; and they refrain from making unsolicited comments about other practitioners. In instances where their opinion is sought, or where REALTORS believe that comment is necessary, their opinion is offered in an objective, professional manner, uninfluenced by any personal motivation or potential advantage or gain.

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

In the interpretation of this obligation, REALTORS can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, "Whatsoever ye would that others should do to you, do ye even so to them."

Accepting this standard as their own, REALTORS pledge to observe its spirit in all of their activities and to conduct their business in accordance with the tenets set forth below.

DUTIES TO CLIENTS AND CUSTOMERS

ARTICLE 1
When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS pledge themselves to protect and promote the interests of their client. This obligation of absolute fidelity to the client's interests is primary, but it does not relieve REALTORS of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS remain obligated to treat all parties honestly. (Amended 1/93)

    Standard of Practice 1-1
    REALTORS, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics. (Amended 1/93)

    Standard of Practice 1-2
    The duties the Code of Ethics imposes on agents/representatives are applicable to REALTORS acting as agents, transaction brokers, facilitators, or in any other recognized capacity except for any duty specifically exempted by law or regulation. (Adopted 1/95)

    Standard of Practice 1-3
    REALTORS, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.

    Standard of Practice 1-4
    REALTORS, when seeking to become a buyer/tenant representative, shall not mislead buyers or tenants as to savings or other benefits that might be realized through use of the REALTOR's services. (Amended 1/93)

    Standard of Practice 1-5
    REALTORS may represent the seller/landlord and buyer/tenant in the same transaction only after full disclosure to and with informed consent of both parties. (Adopted 1/93)

    Standard of Practice 1-6
    REALTORS shall submit offers and counter-offers objectively and as quickly as possible. (Adopted 1/93, Amended 1/95)

    Standard of Practice 1-7
    When acting as listing brokers, REALTORS shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. REALTORS shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord. REALTORS shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease. (Amended 1/93)

    Standard of Practice 1-8
    REALTORS acting as agents of buyers/tenants shall submit to buyers/tenants all offers and counter-offers until acceptance but have no obligation to continue to show properties to their clients after an offer has been accepted unless otherwise agreed in writing. REALTORS acting as agents of buyers/tenants shall recommend that buyers/tenants obtain the advice of legal counsel if there is a question as to whether a pre-existing contract has been terminated. (Adopted 1/93)

    Standard of Practice 1-9
    The obligation of REALTORS to preserve confidential information provided by their clients continues after the termination of the agency relationship. REALTORS shall not knowingly, during or following the termination of a professional relationship with their client:

      1) reveal confidential information of the client; or
      2) use confidential information of the client to the disadvantage of the client; or
      3) use confidential information of the client for the REALTOR's advantage or the advantage of a third party unless the client consents after full disclosure except where the REALTOR is:

        a) required by court order; or
        b) it is the intention of the client to commit a crime and the information is necessary to prevent the crime; or
        c) necessary to defend the REALTOR or the REALTOR's employees or associates against an accusation of wrongful conduct. (Adopted 1/93, Amended 1/95)

    Standard of Practice 1-10
    REALTORS shall, consistent with the terms and conditions of their property management agreement, competently manage the property of clients with due regard for the rights, responsibilities, benefits, safety and health of tenants and others lawfully on the premises. (Adopted 1/95)

    Standard of Practice 1-11
    REALTORS who are employed to maintain or manage a client's property shall exercise due diligence and make reasonable efforts to protect it against reasonably foreseeable contingencies and losses. (Adopted 1/95)


    ARTICLE 2
    REALTORS shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency duties owed to their clients. (Amended 1/93)

      Standard of Practice 2-1
      REALTORS shall only be obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority. Article 2 does not impose upon the REALTOR the obligation of expertise in other professional or technical disciplines.

      Standard of Practice 2-2
      When entering into listing contracts, REALTORS must advise sellers/landlords of:

        1) the REALTOR's general company policies regarding cooperation with subagents, buyer/tenant agents, or both;
        2) the fact that buyer/tenant agents, even if compensated by the listing broker, or by the seller/landlord will represent the interests of buyers/tenants; and
        3) any potential for the listing broker to act as a disclosed dual agent, e.g. buyer/tenant agent. (Adopted 1/93)

      Standard of Practice 2-3
      When entering into contracts to represent buyers/tenants, REALTORS must advise potential clients of:

        1) the REALTOR's general company policies regarding cooperation with other firms; and
        2) any potential for the buyer/tenant representative to act as a disclosed dual agent, e.g. listing broker, subagent, landlord's agent, etc. (Adopted 1/93)

      Standard of Practice 2-4
      REALTORS shall not be parties to the naming of a false consideration in any document, unless it be the naming of an obviously nominal consideration.

      Standard of Practice 2-5
      Factors defined as "non-material" by law or regulation or which are expressly referenced in law or regulation as not being subject to disclosure are considered not "pertinent" for purposes of Article 2. (Adopted 1/93)


    ARTICLE 3
    REALTORS shall cooperate with other brokers except when cooperation is not in the client's best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker. (Amended 1/95)

      Standard of Practice 3-1
      REALTORS, acting as exclusive agents of sellers/landlords, establish the terms and conditions of offers to cooperate. Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperation includes an offer of compensation. Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning efforts to accept the offer of cooperation. (Amended 1/94)

      Standard of Practice 3-2
      REALTORS shall, with respect to offers of compensation to another REALTOR, timely communicate any change of compensation for cooperative services to the other REALTOR prior to the time such REALTOR produces an offer to purchase/lease the property. (Amended 1/94)

      Standard of Practice 3-3
      Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation. (Adopted 1/94)

      Standard of Practice 3-4
      REALTORS, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements (i.e., listings where one amount of commission is payableif the listing broker's firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/landlord or a cooperating broker). The listing broker shall, as soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their client. (Amended 1/94)

      Standard of Practice 3-5
      It is the obligation of sub-agents to promptly disclose all pertinent facts to the principal's agent prior to as well as after a purchase or lease agreement is executed. (Amended 1/93)
      Standard of Practice 3-6
      REALTORS shall disclose the existence of an accepted offer to any broker seeking cooperation. (Adopted 5/86)

      Standard of Practice 3-7
      When seeking information from another REALTOR concerning property under a management or listing agreement, REALTORS shall disclose their REALTOR status and whether their interest is personal or on behalf of a client and, if on behalf of a client, their representational status. (Amended 1/95)

      Standard of Practice 3-8
      REALTORS shall not misrepresent the availability of access to show or inspect a listed property. (Amended 11/87)


    ARTICLE 4
    REALTORS shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner's agent. In selling property they own, or in which they have any interest, REALTORS shall reveal their ownership or interest in writing to the purchaser or the purchaser's representative. (Amended 1/91)

      Standard of Practice 4-1
      For the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS prior to the signing of any contract. (Adopted 2/86)

    ARTICLE 5
    REALTORS shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.


    ARTICLE 6
    When acting as agents, REALTORS shall not accept any commission, rebate, or profit on expenditures made for their principal, without the principal's knowledge and consent. (Amended 1/92)

      Standard of Practice 6-1
      REALTORS shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion. (Amended 5/88)

      Standard of Practice 6-2
      When acting as agents or sub-agents, REALTORS shall disclose to a client or customer if there is any financial benefit or fee the REALTOR or the REALTOR's firm may receive as a direct result of having recommended real estate products or services (e.g., homeowner's insurance, warranty programs, mortgage financing, title insurance, etc.) other than real estate referral fees. (Adopted 5/88)


    ARTICLE 7
    In a transaction, REALTORS shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR's client or clients. (Amended 1/93)


    ARTICLE 8
    REALTORS shall keep in a special account in an appropriate financial institution, separated from their own funds, monies coming into their possession in trust for other persons, such as escrows, trust funds, clients' monies, and other like items.


    ARTICLE 9
    REALTORS, for the protection of all parties, shall assure whenever possible that agreements shall be in writing, and shall be in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party upon their signing or initialing. (Amended 1/95)

      Standard of Practice 9-1
      For the protection of all parties, REALTORS shall use reasonable care to ensure that documents pertaining to the purchase, sale, or lease of real estate are kept current through the use of written extensions or amendments. (Amended 1/93)


    DUTIES TO THE PUBLIC

    ARTICLE 10
    REALTORS shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin. REALTORS shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin. (Amended 1/90)

      Standard of Practice 10-1
      REALTORS shall not volunteer information regarding the racial, religious or ethnic composition of any neighborhood and shall not engage in any activity which may result in panic selling. REALTORS shall not print, display or circulate any statement or advertisement with respect to the selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status or national origin. (Adopted 1/94)


    ARTICLE 11
    The services which REALTORS provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.

    REALTORS shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth. (Amended 1/95)

      Standard of Practice 11-1
      The obligations of the Code of Ethics shall not be supplemented by the Uniform Standards of Professional Appraisal Practice (USPAP) where an opinion or recommendation of price or pricing is provided in pursuit of a listing, to assist a potential purchaser in formulating a purchase offer, or to provide a brokers price opinion, whether for a fee or not.

      Standard of Practice 11-2
      The obligations of the Code of Ethics in respect of real estate disciplines other than appraisal shall be interpreted and applied in accordance with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests considering the complexity of the transaction, the availability of expert assistance, and, where the REALTOR is an agent or sub-agent, the obligations of a fiduciary. (Adopted 1/95)

      Standard of Practice 11-3

      When REALTORS provide consulting services to clients which involve advice or counsel for a fee (not a commission), such advice shall be rendered in an objective manner and the fee shall not be contingent on the substance of the advice or counsel given. If brokerage or transaction services are to be provided in addition to consulting services, a separate compensation may be paid with prior agreement between the client and REALTOR.


    ARTICLE 12
    REALTORS shall be careful at all times to present a true picture in their advertising and representations to the public. REALTORS shall also ensure that their professional status (e.g., broker, appraiser, property manager, etc.) or status as REALTORS is clearly identifiable in any such advertising. (Amended 1/93)

      Standard of Practice 12-1
      REALTORS shall not offer a service described as "free of charge" when the rendering of a service is contingent on the obtaining of a benefit such as a listing or commission.

      Standard of Practice 12-2
      REALTORS shall not represent that their services are free or without cost if they expect to receive compensation from any source other than their client. (Adopted 1/95)

      Standard of Practice 12-3
      The offering of premiums, prizes, merchandise discounts or other inducements to list, sell, purchase, or lease is not, in itself, unethical even if receipt of the benefit is contingent on listing, selling, purchasing, or leasing through the REALTOR making the offer. However, REALTORS must exercise care and candor in any such advertising or other public or private representations so that any party interested in receiving or otherwise benefiting from the REALTOR's offer will have clear, thorough, advance understanding of all the terms and conditions of the offer. The offering of any inducements to do business is subject to the limitations and restrictions of state law and the ethical obligations established by any applicable Standard of Practice. (Amended 1/95)

      Standard of Practice 12-4
      REALTORS shall not offer for sale/lease or advertise property without authority. When acting as listing brokers or as sub-agents, REALTORS shall not quote a price different from that agreed upon with the seller/landlord. (Amended 1/93)

      Standard of Practice 12-5
      REALTORS shall not advertise nor permit any person employed by or affiliated with them to advertise listed property without disclosing the name of the firm. (Adopted 11/86)

      Standard of Practice 12-6
      REALTORS, when advertising unlisted real property for sale/lease in which they have an ownership interest, shall disclose their status as both owners/landlords and as REALTORS or real estate licensees. (Amended 1/93)

      Standard of Practice 12-7
      Only REALTORS who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have "sold" the property. Prior to closing, a cooperating broker may post a "sold" sign only with the consent of the listing broker.


    ARTICLE 13
    REALTORS shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.


    ARTICLE 14
    If charged with unethical practice or asked to present evidence or to cooperate in any other way, in any disciplinary proceeding or investigation, REALTORS shall place all pertinent facts before the proper tribunals of the Member Board or affiliated institute, society, or council in which membership is held and shall take no action to disrupt or obstruct such processes. (Amended 1/90)

      Standard of Practice 14-1
      REALTORS shall not be subject to disciplinary proceedings in more than one Board of REALTORS or affiliated institute, society or council in which they hold membership with respect to alleged violations of the Code of Ethics relating to the same transaction or event. (Amended 1/95)

      Standard of Practice 14-2
      REALTORS shall not make any unauthorized disclosure or dissemination of the allegations, findings, or decision developed in connection with an ethics hearing or appeal or in connection with an arbitration hearing or procedural review. (Amended 1/92)

      Standard of Practice 14-3
      REALTORS shall not obstruct the Board's investigative or disciplinary proceedings by instituting or threatening to institute actions for libel, slander or defamation against any party to a professional standards proceeding or their witnesses. (Adopted 11/87)

      Standard of Practice 14-4
      REALTORS shall not intentionally impede the Board's investigative or disciplinary proceedings by filing multiple ethics complaints based on the same event or transaction. (Adopted 11/88)


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