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December 2003 | Index of all Real Ethics columns
Know the Code! Changes to Code of Ethics effective now.
The National Association of REALTORS® (NAR) Code of Ethics, to which all REALTORS® subscribe, has some very new and important changes in place that go into effect this month.
These adjustments came about at the NAR Conference and Expo last November, and are official as of Jan. 1, 2004. Here is a brief outline of what you need to know about the changes.
- Standard of Practice 1-2 is changed to define "prospect." The added change is as follows: "Prospect" means a purchaser, seller, tenant, or landlord who is not subject to a representation relationship with the REALTOR® or REALTOR®'s firm.
- As a result of the change to Standard of Practice 1-2, there are changes to Standards of Practice 16-2, 16-7, 16-13. These changes are mainly "technical" in that the word "prospect" is now used in these Standards of Practice.
- Standard of Practice 1-13 is changed to read as follows: When entering into buyer/tenant agreements, REALTORS® must advise potential clients of 1) the REALTOR®'s company policies regarding cooperation; 2) the amount of compensation to be paid by the client; 3) the potential for additional or offsetting compensation from other brokers, from the seller or landlord, or from other parties; and 4) any potential for the buyer/tenant representative to act as a disclosed dual agent, e.g. listing broker, subagent, landlord's agent, etc.
- Standard of Practice 3-6 is amended as follows: REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation.
- Standard of Practice 16-3 is changed as follows, with underscoring indicating additions:
Article 16 does not preclude REALTORS® from contacting the client of 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 management as opposed to brokerage),
or from offering the same type of service for property not subject to other brokers' exclusive agreements. However, information received through a Multiple Listing Service or any other offer of cooperation may not be used to target clients of other REALTORS® to whom such offers to provide service may be made.
- Article 9 is changed as follows, with underscoring indicating additions:
REALTORS®, for the protection of all parties, shall assure whenever possible that
all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and
leases, shall be in writing, 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
to such agreements upon their signing or initialing. (This change was made to clarify the article.)
- Article 16 is changed to the following: REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients. (This change was made to clarify the article.)
Each month, the Aurora
Association of REALTORS® Web site features Real Ethics, a column by Steve Stazel devoted to explaining Code of Ethics issues for members. A REALTOR® since 1974, Stazel is a Professional Standards instructor and senior Ethics instructor for the Colorado Association of REALTORS®.
If you have an ethical concern or an issue you would like to see addressed, please call Stazel at (303) 773-3333 or e-mail him at
stazels@msn.com. The comments of this article reflect the understanding and opinions of the author and do not represent an official expression of policy by the National Association of REALTORS®.
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