Andrea Reed, GRI

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.

Under all is the land. Upon its wise utilization and widely allocated

ownership depend the survival and growth of free institutions and of our

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

maintain and improve the standards of their calling and share with their

In recognition and appreciation of their obligations to clients,

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.

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

Realizing that cooperation with other real estate professionals promotes

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

necessary, their opinion is offered in an objective, professional manner,

uninfluenced by any personal motivation or potential advantage or gain.

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.

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.”

spirit in all of their activities and to conduct their business in

accordance with the tenets set forth below.

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

interests of their client. This obligation to the client is primary, but it

honestly. When serving a buyer, seller, landlord, tenant or other party

remain obligated by the duties imposed by the Code of Ethics.

The duties the Code of Ethics imposes are applicable whether

capacities except that any duty imposed exclusively on agents by law

or regulation shall not be imposed by this Code of Ethics on

As used in this Code of Ethics, “client” means the person(s) or

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

purchaser, seller, tenant, or landlord who is not subject to a

“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

mislead the owner as to market value.

shall not mislead buyers or tenants as to savings or other benefits

same transaction only after full disclosure to and with informed

to the seller/landlord all offers and counter-offers until closing or

execution of a lease unless the seller/landlord has waived this

to market the property after an offer has been accepted by the

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.

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

shall recommend that buyers/tenants obtain the advice of legal

counsel if there is a question as to whether a pre-existing contract has

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 nonagency

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; or

advantage or the advantage of third parties unless:

a) clients consent after full disclosure; or

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

information is necessary to prevent the crime; or

employees or associates against an accusation of wrongful

conduct.

Information concerning latent material defects is not considered

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

property shall exercise due diligence and make reasonable efforts to

protect it against reasonably foreseeable contingencies and losses.

sellers/landlords of:

amount(s) of any compensation that will be offered 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

potential clients of:

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;

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

disclosed dual agent, e.g. listing broker, subagent, landlord’s

agent, etc., and

5) the possibility that sellers or sellers’ representatives may not treat

the existence, terms, or conditions of offers as confidential

unless confidentiality is required by law, regulation, or by any

Fees for preparing appraisals or other valuations shall not be contingent

brokers shall, with the sellers’ approval, disclose the existence of

shall also disclose whether offers were obtained by the listing

licensee, another licensee in the listing firm, or by a cooperating

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

factors reasonably apparent to someone with expertise in those areas

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

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

consideration.

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.

is not in the client’s best interest. The obligation to cooperate does not

include the obligation to share commissions, fees, or to otherwise

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

Standard of Practice 3-2 does not preclude the listing broker and

cooperating broker from entering into an agreement to change

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 before

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

offers with unresolved contingencies, to any broker seeking

or on behalf of a client and, if on behalf of a client, their

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,

ownership or interest in writing to the purchaser or the purchaser’s

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

concerning a property or its value where they have a present or

contemplated interest unless such interest is specifically disclosed to

all affected parties.

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

whom the recommendation is made any financial benefits or fees, other

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.

than one party, even if permitted by law, without disclosure to all

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.

possible that all agreements related to real estate transactions

including, but not limited to, listing and representation agreements,

purchase contracts, and leases are 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

to ensure that documents pertaining to the purchase, sale, or lease of

real estate are kept current through the use of written extensions or

reasons of race, color, religion, sex, handicap, familial status, or

agreement to discriminate against a person or persons on the basis of

race, color, religion, sex, handicap, familial status, or national origin.

discriminate against any person or persons on the basis of race,

color, religion, sex, handicap, familial status, or national origin.

shall not volunteer information regarding the racial, religious

or ethnic composition of any neighborhood nor shall they engage in

provide demographic information related to a property, transaction

or professional assignment to a party if such demographic

with or complete, in a manner consistent with Article 10, a real estate

transaction or professional assignment and (b) is obtained or derived

from a recognized, reliable, independent, and impartial source. The

source of such information and any additions, deletions,

modifications, interpretations, or other changes shall be disclosed in

advertisement with respect to 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.

As used in Article 10 “real estate employment practices” relates to

employees and independent contractors providing real estate-related

services and the administrative and clerical staff directly supporting

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.

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

other than in pursuit of a listing or to assist a potential purchaser in

formulating a purchase offer, such opinions shall include the

following:

1) identification of the subject property

2) date prepared

3) defined value or price

4) limiting conditions, including statements of purpose(s) and

intended user(s)

5) any present or contemplated interest, including the possibility of

representing the seller/landlord or buyers/tenants

6) basis for the opinion, including applicable market data

7) if the opinion is not an appraisal, a statement to that effect

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

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

consultive services, a separate compensation may be paid with prior

The competency required by Article 11 relates to services contracted

expressly imposed by the Code of Ethics; and the duties imposed by

ensure that their professional status (e.g., broker, appraiser, property

advertising and in other representations provided that all terms

governing availability of the offered product or service are clearly

even if they expect to receive compensation from a source other than

benefit from a third party is clearly disclosed at the same time.

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,

advertising or other public or private representations so that any

party interested in receiving or otherwise benefiting from the

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

shall not quote a price different from that agreed upon with the

affiliated with them to advertise listed property without disclosing

which they have an ownership interest, shall disclose their status as

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.

unauthorized practice of law and shall recommend that legal counsel

be obtained when the interest of any party to the transaction

requires it.

If charged with unethical practice or asked to present evidence or to

cooperate in any other way, in any professional standards proceeding

proper tribunals of the Member Board or affiliated institute, society, or

council in which membership is held and shall take no action to disrupt

council in which they hold membership with respect to alleged

violations of the Code of Ethics relating to the same transaction or

dissemination of the allegations, findings, or decision developed in

connection with an ethics hearing or appeal or in connection with an

professional standards proceedings by instituting or threatening to

institute actions for libel, slander or defamation against any party to

a professional standards proceeding or their witnesses based on the

filing of an arbitration request, an ethics complaint, or testimony

or disciplinary proceedings by filing multiple ethics complaints

statements about competitors, their businesses, or their business

inconsistent with exclusive representation or exclusive brokerage

Article 16 is not intended to prohibit aggressive or innovative

business practices which are otherwise ethical and does not prohibit

announcements to prospects describing their services and the terms

of their availability even though some recipients may have entered

into agency agreements or other exclusive relationships with another

distribution addressed to all prospects in a given geographical area

or in a given profession, business, club, or organization, or other

classification or group is deemed “general” for purposes of this

Article 16 is intended to recognize as unethical two basic types of

solicitations:

First, telephone or personal solicitations of property owners who

have been identified by a real estate sign, multiple listing

compilation, or other information service as having exclusively

Second, mail or other forms of written solicitations of prospects

such solicitations are not part of a general mailing but are directed

specifically to property owners identified through compilations of

current listings, “for sale” or “for rent” signs, or other sources of

information required by Article 3 and Multiple Listing Service rules

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

exclusively with another broker. However, if the listing broker, when

nature of such listing; i.e., an exclusive right to sell, an exclusive

agency, open listing, or other form of contractual agreement between

to secure such information and may discuss the terms upon which

listing to become effective upon expiration of any existing exclusive

tenants who are subject to exclusive buyer/tenant agreements.

expiration date of the exclusive buyer/tenant agreement, the

a future buyer/tenant agreement or, alternatively, may enter into a

buyer/tenant agreement to become effective upon the expiration of

regarding the creation of an exclusive relationship to provide the

initiated such discussions, they may discuss the terms upon which

they might enter into a future agreement or, alternatively, may enter

into an agreement which becomes effective upon expiration of any

representative or exclusive broker in one or more past transactions

The fact that an exclusive agreement has been entered into with a

entering into a similar agreement after the expiration of the prior

affirmative obligation to make reasonable efforts to determine

whether the prospect is subject to a current, valid exclusive agreement

disclose that relationship to the seller/landlord’s representative or

broker at first contact and shall provide written confirmation of that

disclosure to the seller/landlord’s representative or broker not later

representatives or brokers shall disclose that relationship to the

seller/landlord at first contact for that buyer/tenant and shall provide

written confirmation of such disclosure to the seller/landlord not later

or as subagents of listing brokers, shall disclose that relationship to

buyers/tenants as soon as practicable and shall provide written

confirmation of such disclosure to buyers/tenants not later than

All dealings concerning property exclusively listed, or with

buyer/tenants who are subject to an exclusive agreement shall be

carried on 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 where such dealings are initiated by the client.

Before providing substantive services (such as writing a purchase

prospects whether they are a party to any exclusive representation

services concerning a prospective transaction to prospects who are

parties to exclusive representation agreements, except with the

consent of the prospects’ exclusive representatives or at the direction

negotiate with sellers/landlords, buyers/tenants or others who are not

subject to an exclusive agreement but shall not knowingly obligate

them to pay more than one commission except with their informed

offer to compensate, directly or indirectly, any of the sales

without the prior express knowledge and consent of the cooperating

broker.

brokers, shall not use the terms of an offer to purchase/lease to

attempt to modify the listing broker’s offer of compensation to

subagents or buyer/tenant representatives or brokers nor make the

submission of an executed offer to purchase/lease contingent on the

listing broker’s agreement to modify the offer of compensation.

brokers, shall not attempt to extend a listing broker’s offer of

cooperation and/or compensation to other brokers without the

through offers to cooperate made through multiple listing services or

through other offers of cooperation to refer listing brokers’ clients to

other brokers or to create buyer/tenant relationships with listing

brokers’ clients, unless such use is authorized by listing brokers.

Signs giving notice of property for sale, rent, lease, or exchange shall

not be placed on property without consent of the seller/landlord.

current firm, shall not induce clients of their current firm to cancel

exclusive contractual agreements between the client and that firm.

agreements with their associated licensees governing assignability of

In the event of contractual disputes or specific non-contractual disputes

(principals) associated with different firms, arising out of their

arbitration in accordance with the regulations of their Board or Boards

rather than litigate the matter.

disputes in accordance with the regulations of their Board, provided

the clients agree to be bound by the decision.

The obligation to participate in arbitration contemplated by this Article

The filing of litigation and refusal to withdraw from it by

circumstances when all parties to the dispute advise the Board in

writing that they choose not to arbitrate before the Board.

transaction, are not obligated to arbitrate disputes with other

Specific non-contractual disputes that are subject to arbitration

pursuant to Article 17 are:

1) Where a listing broker has compensated a cooperating broker and

another cooperating broker subsequently claims to be the

procuring cause of the sale or lease. In such cases the

cooperative transaction. (Adopted 1/97)

underlying cooperative transaction. (Adopted 1/97)

transaction. (Adopted 1/97)

proceed between the brokers. (Adopted 1/97)

of commission to which the listing broker agreed. (Adopted 1/05)

REALTOR®, the charge must read as an alleged violation of one or more

for, the Case Interpretations in Interpretations of the Code of Ethics.