Professional Code of Ethics and Minimum Standards Flashcards
What are the four sections of the Code of Ethics?
Preamble
Duties to Clients and Customers
Duties to the Public
Duties to REALTORS®
What does the Preamble contain?
Thoughts about how licensees should conduct themselves
What part of the Code must be named in any complaint that is filed?
Only Articles can be named, never the Preamble. And Standards of Practice may be cited only in support of a named Article.
How many Articles are included in the Code of Ethics?
17
Who is responsible for enforcing the Code of Ethics?
Local Associations of REALTORS®
What are the two forms of informal dispute resolution?
Ombudsman and Mediation
Who do parties meet with in a real estate mediation process?
A trained third-party called a Mediator
Which form of dispute resolution is typically used to resolve problems between broker members of an association?
Arbitration
What is the primary obligation of a licensee?
Promote the interests of the client.
Who is a prospect?
A purchaser, seller, tenant, or landlord who is not subject to a representation relationship with the Realtor®.
When can a listing broker stop submitting offers?
Upon closing unless the seller waives the obligation in writing.
Article 1 requires Realtors® to obtain seller’s permission prior to disclosing what information?
The disclosure of multiple offers
What are “non-material” factors?
Minor facts not being considered as “pertinent”
When is a Realtor® allowed not to cooperate with another broker?
When cooperation is not in the clients’ best interest
When must changes in compensation offered for cooperative services be communicated to the other Realtor®?
Prior to the time that Realtor® submits an offer to purchase/lease the property
The obligation to cooperate does not necessary include what?
To share commissions, fees or compensation
When do the Code of Ethics rules apply?
When a real estate agent is acting as an agent or in legally recognized nonagent capacities, such as transaction broker or facilitator
Under what circumstances may Realtors® reveal confidential client information?
They can reveal confidential information:
- required by court order, or
- to prevent the client from committing a crime, or
- to defend a Realtor® against an accusation of wrongful conduct.
What must Realtors® do in response to inquiries from buyers or cooperating brokers?
They must, with the sellers’ approval, disclose the existence of offers on the property.
Under what circumstances are Realtors® not obligated to cooperate with other brokers?
When cooperation is not in the clients’ best interest.
Much of the information incorporated into the professional code of ethics in real estate has come from three sources.
Federal and state laws which focus on anti-discrimination laws and fair trade practices
Real estate licensing regulation on the state level dealing primarily with agency issues and disclosures
Self-regulation by real estate associations that set standards for professional conduct
The Code itself is comprised of four sections:
Preamble
Duties to Clients and Customers
Duties to the Public
Duties to REALTORS®
Only NAR members
are subject to the Code of Ethics.
Ombudsen
do not establish whether ethics violations have taken place. They foresee, recognize, and help settle misunderstandings and differences before they become full-fledged disputes that can result in charges of unethical behavior.
Mediation
is the favored dispute resolution method of REALTOR® organizations because it is a way to generate a mutually-acceptable decision regarding a disagreement without having a judgment imposed by a hearing panel.
Realtors® must exercise due diligence
and make reasonable efforts to protect clients against foreseeable contingencies and losses.
