Realtor Code of Ethics

Code of Ethics and Standards of Practice of the National

Association of REALTORS®

Effective January 1, 2000

Where the word Realtors® is used in this Code and Preamble, it shall be

deemed to include REALTOR-ASSOCIATE® s .

While the Code of Ethics establishes 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. REALTORS® having direct personal knowledge of conduct that

may violate the Code of Ethics involving misappropriation of client or customer

funds or property, willful discrimination, or fraud resulting in substantial

economic harm, bring such matters to the attention of the appropriate Board or

Association of REALTORS®. (Amended 1/00)

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 competency, fairness, and high

integrity resulting from adherence to a lofty ideal of moral conduct in business

relations. No inducement of profit and no instruction from clients ever can

justify departure from this ideal.

In the interpretation of this obligation, Realtors® can take no safer guide than

that which has been handed down through the centuries, embodied in the

Golden Rule, "Whatsoever ye would that others should do to you, do ye even

so to them."

Accepting this standard as their own, Realtors® pledge to observe its spirit in

all of their activities and to conduct their business in accordance with the tenets

set forth below.

Duties to Clients and Customers

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Article 1

When representing a buyer, seller, landlord, tenant, or other client as an agent,

Realtors® pledge themselves to protect and promote the interests of their

client. This obligation of absolute fidelity to the client's interests is primary, but it

does not relieve Realtors® of their obligation to treat all parties honestly. When

serving a buyer, seller, landlord, tenant or other party in a non-agency capacity,

Realtors® remain obligated to treat all parties honestly. (Amended 1/93)

Standard of Practice 1-1

Realtors®, when acting as principals in a real estate transaction, remain

obligated by the duties imposed by the Code of Ethics. (Amended 1/93)

Standard of Practice 1-2

The duties the Code of Ethics imposes are applicable whether Realtors®

are acting as agents or in legally recognized non-agency capacities

except that any duty imposed exclusively on agents by law or regulation

shall not be imposed by this Code of Ethics on Realtors® acting in

non-agency capacities.

As used in this Code of Ethics, "client" means the person(s) or entity(ies)

with whom a Realtor® or a REALTOR®’s firm has an agency or legally

recognized non-agency relationship; "customer" means a party to a real

estate transaction who receives information, services, or benefits but has

no contractual relationship with the Realtor® or the REALTOR®’s firm;

"agent" means a real estate licensee (including brokers and sales

associates) acting in an agency relationship as defined by state law or

regulation; and "broker" means a real estate licensee (including brokers

and sales associates) acting as an agent or in a legally recognized

non-agency capacity. (Adopted 1/95, Amended 1/99)

Standard of Practice 1-3

Realtors®, in attempting to secure a listing, shall not deliberately mislead

the owner as to market value.

Standard of Practice 1-4

Realtors®, when seeking to become a buyer/tenant representative, shall

not mislead buyers or tenants as to savings or other benefits that might be

realized through use of the REALTOR®’s services. (Amended 1/93)

Standard of Practice 1-5

Realtors® may represent the seller/landlord and buyer/tenant in the same

transaction only after full disclosure to and with informed consent of both

parties. (Adopted 1/93)

Standard of Practice 1-6

Realtors® shall submit offers and counter-offers objectively and as

quickly as possible. (Adopted 1/93, Amended 1/95)

Standard of Practice 1-7

When acting as listing brokers, Realtors® shall continue to submit to the

seller/landlord all offers and counter-offers until closing or execution of a

lease unless the seller/landlord has waived this obligation in writing.

Realtors® shall not be obligated to continue to market the property after

an offer has been accepted by the seller/landlord. Realtors® shall

recommend that sellers/landlords obtain the advice of legal counsel prior

to acceptance of a subsequent offer except where the acceptance is

contingent on the termination of the pre-existing purchase contract or

lease. (Amended 1/93)

Standard of Practice 1-8

Realtors® acting as agents or brokers of buyers/tenants shall submit to

buyers/tenants all offers and counter-offers until acceptance but have no

obligation to continue to show properties to their clients after an offer has

been accepted unless otherwise agreed in writing. Realtors® acting as

agents or brokers of buyers/tenants shall recommend that buyers/tenants

obtain the advice of legal counsel if there is a question as to whether a

pre-existing contract has been terminated. (Adopted 1/93, Amended

1/99)

Standard of Practice 1-9

The obligation of Realtors® to preserve confidential information (as

defined by state law) provided by their clients in the course of any

agency relationship or non-agency relationship recognized by law

continues after termination of agency relationships or any non-agency

relationships recognized by law. Realtors® shall not knowingly, during or

following the termination of professional relationships with their clients:

1) reveal confidential information of clients; or

2) use confidential information of clients to the disadvantage of clients;

3) use confidential information of clients for the REALTOR®’s

advantage or the advantage of third parties unless:

a) clients consent after full disclosure; or

b) Realtors® are required by court order; or

c) it is the intention of a client to commit a crime and

the information is necessary to prevent the crime; or

d) it is necessary to defend a Realtor® or the

REALTOR®’s employees or associates against an

accusation of wrongful conduct. (Adopted 1/93,

Amended 1/99)

Standard of Practice 1-10

Realtors® shall, consistent with the terms and conditions of their real

estate licensure and their property management agreement, competently

manage the property of clients with due regard for the rights, safety and

health of tenants and others lawfully on the premises. (Adopted 1/95,

Amended 1/00)

Standard of Practice 1-11

Realtors® who are employed to maintain or manage a client's property

shall exercise due diligence and make reasonable efforts to protect it

against reasonably foreseeable contingencies and losses. (Adopted 1/95)

Standard of Practice 1-12

When entering into listing contracts, Realtors® must advise

sellers/landlords of:

1) the REALTOR®’s general company policies regarding cooperation

with and compensation to subagents, buyer/tenant agents and/or brokers

acting in legally recognized non-agency capacities;

2) the fact that buyer/tenant agents or brokers, even if compensated by

listing brokers, or by sellers/landlords may represent the interests of

buyers/tenants; and

3) any potential for listing brokers to act as disclosed dual agents, e.g.

buyer/tenant agents. (Adopted 1/93, Renumbered 1/98, Amended

1/99)

Standard of Practice 1-13

When entering into buyer/tenant agreements, Realtors® must advise

potential clients of:

1) the REALTOR®’s general company policies regarding cooperation

and compensation; and

2) any potential for the buyer/tenant representative to act as a disclosed

dual agent, e.g. listing broker, subagent, landlord's agent, etc. (Adopted

1/93, Renumbered 1/98, Amended 1/99)

Article 2

Realtors® shall avoid exaggeration, misrepresentation, or concealment of

pertinent facts relating to the property or the transaction. Realtors® shall not,

however, be obligated to discover latent defects in the property, to advise on

matters outside the scope of their real estate license, or to disclose facts which

are confidential under the scope of agency or non-agency relationships as

defined by state law. (Amended 1/00)

Standard of Practice 2-1

Realtors® shall only be obligated to discover and disclose adverse

factors reasonably apparent to someone with expertise in those areas

required by their real estate licensing authority. Article 2 does not impose

upon the Realtor® the obligation of expertise in other professional or

technical disciplines. (Amended 1/96)

Standard of Practice 2-2

(Renumbered as Standard of Practice 1-12 1/98)

Standard of Practice 2-3

(Renumbered as Standard of Practice 1-13 1/98)

Standard of Practice 2-4

Realtors® shall not be parties to the naming of a false consideration in

any document, unless it be the naming of an obviously nominal

consideration.

Standard of Practice 2-5

Factors defined as "non-material" by law or regulation or which are

expressly referenced in law or regulation as not being subject to

disclosure are considered not "pertinent" for purposes of Article 2.

(Adopted 1/93)

Article 3

Realtors® shall cooperate with other brokers except when cooperation is not in

the client's best interest. The obligation to cooperate does not include the

obligation to share commissions, fees, or to otherwise compensate another

broker. (Amended 1/95)

Standard of Practice 3-1

Realtors®, acting as exclusive agents or brokers of sellers/landlords,

establish the terms and conditions of offers to cooperate. Unless

expressly indicated in offers to cooperate, cooperating brokers may not

assume that the offer of cooperation includes an offer of compensation.

Terms of compensation, if any, shall be ascertained by cooperating

brokers before beginning efforts to accept the offer of cooperation.

(Amended 1/99)

Standard of Practice 3-2

Realtors® shall, with respect to offers of compensation to another

Realtor®, timely communicate any change of compensation for

cooperative services to the other Realtor® prior to the time such

Realtor® produces an offer to purchase/lease the property. (Amended

1/94)

Standard of Practice 3-3

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 payable if the listing

broker's firm is the procuring cause of sale/lease and a different amount

of commission is payable if the sale/lease results through the efforts of the

seller/landlord or a cooperating broker). The listing broker shall, as soon

as practical, disclose the existence of such arrangements to potential

cooperating brokers and shall, in response to inquiries from cooperating

brokers, disclose the differential that would result in a cooperative

transaction or in a sale/lease that results through the efforts of the

seller/landlord. If the cooperating broker is a buyer/tenant representative,

the buyer/tenant representative must disclose such information to their

client. (Amended 1/94)

Standard of Practice 3-5

It is the obligation of subagents to promptly disclose all pertinent facts to

the principal's agent prior to as well as after a purchase or lease

agreement is executed. (Amended 1/93)

Standard of Practice 3-6

Realtors® shall disclose the existence of an accepted offer to any broker

seeking cooperation. (Adopted 5/86)

Standard of Practice 3-7

When seeking information from another Realtor® concerning property

under a management or listing agreement, Realtors® shall disclose their

Realtor® status and whether their interest is personal or on behalf of a

client and, if on behalf of a client, their representational status. (Amended

1/95)

Standard of Practice 3-8

Realtors® shall not misrepresent the availability of access to show or

inspect a listed property. (Amended 11/87)

Article 4

Realtors® shall not acquire an interest in or buy or present offers from

themselves, any member of their immediate families, their firms or any member

thereof, or any entities in which they have any ownership interest, any real

property without making their true position known to the owner or the owner's

agent or broker. In selling property they own, or in which they have any

interest, Realtors® shall reveal their ownership or interest in writing to the

purchaser or the purchaser's representative. (Amended 1/00)

Standard of Practice 4-1

For the protection of all parties, the disclosures required by Article 4

shall be in writing and provided by Realtors® prior to the signing of any

contract. (Adopted 2/86)

Article 5

Realtors® shall not undertake to provide professional services concerning a

property or its value where they have a present or contemplated interest unless

such interest is specifically disclosed to all affected parties.

Article 6

Realtors® shall not accept any commission, rebate, or profit on expenditures

made for their client, without the client's knowledge and consent.

When recommending real estate products or services (e.g., homeowner's

insurance, warranty programs, mortgage financing, title insurance, etc.),

Realtors® shall disclose to the client or customer to whom the recommendation

is made any financial benefits or fees, other than real estate referral fees, the

Realtor® or REALTOR®’s firm may receive as a direct result of such

recommendation. (Amended 1/99)

Standard of Practice 6-1

Realtors® shall not recommend or suggest to a client or a customer the

use of services of another organization or business entity in which they

have a direct interest without disclosing such interest at the time of the

recommendation or suggestion. (Amended 5/88)

Article 7

In a transaction, Realtors® shall not accept compensation from more than one

party, even if permitted by law, without disclosure to all parties and the

informed consent of the REALTOR®’s client or clients. (Amended 1/93)

Article 8

Realtors® shall keep in a special account in an appropriate financial institution,

separated from their own funds, monies coming into their possession in trust for

other persons, such as escrows, trust funds, clients' monies, and other like

items.

Article 9

Realtors®, for the protection of all parties, shall assure whenever possible that

agreements shall be in writing, and shall be in clear and understandable language

expressing the specific terms, conditions, obligations and commitments of the

parties. A copy of each agreement shall be furnished to each party upon their

signing or initialing. (Amended 1/95)