Unit 6 - Overview Flashcards
Learning Objective: Describe the requirements of the Canons of Professional Ethics of the Texas Real Estate Commission and professional ethics in general.
Explanation: The Canons of Professional Ethics, adopted by the Texas Real Estate Commission (TREC), set the standard for ethical conduct among real estate license holders in Texas. These canons include principles such as fidelity (putting the client’s interests above all else), integrity (being honest and morally sound), and competency (being knowledgeable about relevant real estate matters). Compliance with these canons is legally required and reflects a commitment to high ethical standards.
Key Term: Canons of Professional Ethics and Conduct
Definition: A set of ethical guidelines adopted by the Texas Real Estate Commission (TREC) to ensure that real estate license holders adhere to professional and ethical standards in their dealings with clients, customers, and the public. The Canons have the force of law.
Key Term: Code of Ethics
Definition: A formal document or set of guidelines that governs the behavior of members of an organization or profession. In real estate, the National Association of REALTORS® (NAR) publishes a Code of Ethics for its members to follow, ensuring integrity and fair dealing.
Key Term: Competency
Definition: A requirement under the Canons of Professional Ethics that a real estate agent must have the knowledge and skill necessary to perform their duties effectively and professionally. This includes being informed of national, state, and local developments that affect the real estate industry.
Key Term: Consumer Information Form 1-5
Definition: A notice that Texas real estate brokers are required to display in their offices. It provides information about the Real Estate Recovery Trust Account, which protects consumers who suffer losses due to the misdeeds of real estate license holders.
Key Term: Discriminatory practices
Definition: Prohibited actions under the Canons of Professional Ethics, which prevent real estate license holders from discriminating against individuals based on race, color, religion, sex, national origin, disability, or familial status in their real estate dealings.
Key Term: Fidelity
Definition: One of the key principles in the Canons of Professional Ethics, requiring agents to be faithful to their clients, prioritize the client’s interests over their own, and act with trust and loyalty in all dealings.
Key Term: Integrity
Definition: A principle of the Canons of Professional Ethics that requires real estate license holders to act honestly and ethically, ensuring that all their actions are conducted with moral soundness and without deceit.
Which part of the Canons of Professional Ethics and Conduct requires a real estate agent to exercise judgment and skill in dealings with the client?
A. Integrity
B. Competency
C. Knowledge
D. Fidelity
Answer: B. Competency
Reasoning for the answer: Competency refers to the agent’s obligation to possess the knowledge and skill necessary to perform their duties effectively. This includes staying informed about national, state, and local developments in the real estate market to best serve clients.
Under the discriminatory practices section of the Canons of Professional Ethics and Conduct, which practice is permitted?
A. A license holder may inquire about or respond to inquiries about the religion of the current property owner.
B. A license holder may inquire about or respond to inquiries about the marital status of the current property owner.
C. A license holder may disclose whether the current property owner has an HIV-related illness.
D. A license holder may inquire about the current property owner’s skin color.
Answer: B. A license holder may inquire about or respond to inquiries about the marital status of the current property owner.
Reasoning for the answer: Marital status is not a protected class under the Canons of Professional Ethics. However, discrimination based on protected classes such as race, religion, or disability, including an HIV-related illness, is strictly prohibited.
A license holder must not put his personal interests above that of his client’s under which of TREC’s Canons of Professional Ethics and Conduct?
A. Integrity
B. Competency
C. Fidelity
D. Knowledge
Answer: C. Fidelity
Reasoning for the answer: Fidelity requires that an agent prioritize the client’s interests above their own and act with loyalty and faithfulness in representing the client’s best interests in real estate transactions.
A member of the National Association of REALTORS® who violates the NAR Code of Ethics can be disciplined by TREC if
A. The license holder also violates the Canons of Professional Ethics and Conduct.
B. The violation results in criminal charges.
C. The license holder submits to a lie-detector test.
D. A complaint were to be filed with TREC.
Answer: A. The license holder also violates the Canons of Professional Ethics and Conduct.
Reasoning for the answer: TREC can discipline a license holder if the actions that violate the NAR Code of Ethics also constitute a violation of the Canons of Professional Ethics and Conduct or the Texas Real Estate License Act. TREC is responsible for enforcing state regulations.
The canon of competence requires that a real estate broker or a sales agent, while acting as an agent for another,
A. Be informed of national and local developments affecting the real estate business.
B. Be faithful to the trust placed in the agent and be scrupulous in performing the agent’s function.
C. Employ prudence and caution to avoid misrepresentation by either commission or omission.
D. Pledge to continuing education in the intricacies involved in marketing real estate.
Answer: A. Be informed of national and local developments affecting the real estate business.
Reasoning for the answer: The canon of competency requires that agents maintain the necessary knowledge of national, state, and local market conditions that affect real estate transactions, ensuring they are equipped to provide accurate and competent advice to clients.
