Sharon Steele, ABR®, CRS®, is 2006 chair of NAR’s Professional Standards Committee and principal broker for The Sharon Steele Group in Providence, R.I. She teaches ethics and agency courses for the Rhode Island Association of REALTORS®. You can reach her at email@example.com.
Code Update: Assuring Integrity
As the industry changes, so does the Code.
January 1, 2006
As NATIONAL ASSOCIATION OF REALTORS® President Thomas M. Stevens notes in his introduction to the 2006 Code of Ethics, our REALTOR® family will soon be celebrating 100 years of service to consumers and to our country. One of the founding premises of the association was to establish high standards of professional behavior in the real estate industry.
Although these standards have evolved over the years, REALTORS® today still subscribe to the same basic principles of fairness, duty, and honesty that were the core of the original 1913 code.
In 2005 the Professional Standards Committee, under the guidance of Chair Dale Mattison, continued the ongoing task of ensuring that the Code remains apt, accurate, and relevant in an ever-changing real estate environment. It’s this commitment that has ensured that the name REALTOR® remains synonymous with integrity.
Take a minute to review the amendments to the Code that become effective Jan. 1, 2006.
- The duties imposed by Standard of Practice 1-13 to inform clients about company policies on cooperation and compensation in cooperative arrangements were expanded. They now require that REALTORS® entering into agreements to represent buyers or tenants make these clients aware of the possibility that sellers or their representatives might not treat offers as confidential where confidentiality isn’t required by law, regulation, or by the terms of a confidentiality agreement.
- Standard of Practice 1-15, which requires REALTORS® who have seller or client permission to disclose the existence of offers to buyers or to cooperating brokers in response to their requests, was expanded to also require disclosure of the source of offers (e.g., the listing licensee, another licensee in the same company, or a cooperating broker).
- Standard of Practice 10-1, which generally prohibits REALTORS® from disclosing the racial, ethnic, or religious composition of a neighborhood, was clarified to ensure that REALTORS® and the public understand that this standard applies only to the sale or lease of a residence, not to commercial transactions. The companion Standard of Practice 10-3, which became effective in January 2005, created the exception for providing demographic information to clients in nonresidential transactions. The content of Standard of Practice 10-3 remains unchanged, but it has now been renumbered as Standard of Practice 10-2 in the 2006 Code so that the two related standards are in sequential order.
- The Presenting and Negotiating Multiple Offers white paper was revised to reflect the amendment to Standard of Practice 1-13 discussed above. In addition, a consumer-focused brochure, A Buyers’ and Sellers’ Guide to Multiple Offer Negotiations, was excerpted from the white paper. This brochure can be customized by members and local and state associations of REALTORS®.
This year promises new challenges as the Professional Standards Committee reviews what additional guidance must be added to ensure that, in this electronic age, practitioners satisfy Code obligations such as those under Article 12 to present a “true picture in their advertising and representations to the public.” And, the committee will look at ways to ensure that mediation becomes REALTORS®’ preferred dispute resolution tool.
On a personal note, it’s an honor and privilege for me to serve as the committee’s chair this year. It’s my goal to ensure that our Code of Ethics, our personal promise of professionalism and performance, continues to be the guiding light for all REALTORS®.