Code of Ethics Changes Adopted at NAR Annual Convention
January 1, 1997
The NATIONAL ASSOCIATION OF REALTORS® Board of Directors approved several amendments to the Code of Ethics, effective Jan. 1, 1997:
Standard of Practice 16-13
Before the amendment, REALTORS® had to deal directly with the agent exclusively representing sellers or buyers rather than with the clients of other REALTORS®--unless their agent permitted such contact.
Now REALTORS® can deal directly with the clients of other REALTORS® if those clients initiate contact. For instance, a buyer's agent can talk directly to an exclusively represented seller if the seller initiates the discussion. And a listing broker can talk to an exclusively represented buyer if the buyer initiates the conversation.
Before the amendment, arbitration could take place only if there was a contractual relationship, and resulting dispute, between the parties. Now, in three circumstances, monetary disputes can be arbitrated directly between cooperating brokers without involving the listing broker. And in a fourth situation, listing brokers with an open listing can arbitrate between themselves.
- If a listing broker compensates a cooperating broker and another co-op broker then claims to be the procuring cause of the sale, that complainant can name the first co-op broker as the respondent in arbitration. The listing broker doesn’t need to be named.
- If a seller compensates a buyer's broker or tenant representative directly, if the listing broker reduces the commission payable by the seller as a result, and if another broker later claims to be the procuring cause of the sale or lease, that broker may name the compensated co-op broker, instead of the listing broker, in arbitration.
- If a buyer compensates a buyer's broker or tenant representative directly, if the listing broker reduces the commission from the seller or landlord as a result, and if another broker later claims to be the procuring cause of the sale or lease, that broker may name the compensated co-op broker, instead of the listing broker, in arbitration.
- If two or more listing brokers claim to be the procuring cause of the sale on an open listed property and the seller or landlord agrees to participate in and be bound by arbitration, the brokers and the seller or landlord can arbitrate the dispute. If one of the brokers has been compensated by the seller or landlord, the two listing brokers can arbitrate their dispute.
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