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REAL ETHICS by Steve Stazel | April 2007 | Index of all Real Ethics columns
Our responsibility is to give accurate information
This month, I share with you an actual case from the Interpretations of the Code of Ethics, which has been developed by NAR to help us better understand this critical set of rules by which we do business.
Case #2-7: Obligation to Determine Pertinent Facts (Revised Case #9-13 May, 1988. Transferred to Article 2 November, 1994.)
REALTOR® A, a home builder, showed one of his newly-constructed houses to Buyer B. In discussion, the buyer observed that some kind of construction was beginning nearby. He asked REALTOR® A what it was. “I really don’t know,” said REALTOR® A, “but I believe it’s the attractive new shopping center that has been planned for this area.” Following the purchase, Buyer B learned that the new construction was to be a bottling plant and that the adjacent area was zoned industrial.
Charging that the proximity of the bottling plant would have caused him to reject purchase of the home, Buyer B filed a complaint with the Board of REALTORS® charging REALTOR® A with unethical conduct for failing to disclose a pertinent fact. The Grievance Committee referred the complaint for a hearing before a hearing panel of the Professional Standards Committee.
During the hearing, REALTOR® A’s defense was that he had given an honest answer to Buyer B’s question. At the time, he had no positive knowledge about the new construction. He knew that other developers were planning an extensive shopping center in the general area, and had simply ventured a guess. He pointed out, as indicated in Buyer B’s testimony, that he had prefaced his response by saying he didn’t know the answer to this question.
The hearing panel concluded that Buyer B’s question had related to a pertinent fact; that REALTOR® A’s competence required that REALTOR® A know the answer or, if he didn’t know the answer, he should not have ventured a guess, but should have made a commitment to get the answer. The panel also noted that although REALTOR® A had prefaced his response with “I don’t know,” he had nonetheless proceeded to respond, and Buyer B was justified in relying on his response. REALTOR® A was found to have violated Article 2.
The important lesson here is that REALTORS® must not venture guesses. If we don’t know, we must say we don’t know. Because we are REALTORS®, we are held to a higher standard than licensees.
Each month, the Aurora Association of REALTORSŪ Web site features Real Ethics,
a column by Steve Stazel devoted to explaining Code of
Ethics issues for members. A REALTORŪ since 1974, Stazel is a Professional Standards
instructor and senior Ethics
instructor for the Colorado Association of REALTORSŪ.
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 REALTORSŪ.
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