2006 Professional Standards Committee Report

Professional Standards: What are they?

By Gretchen Bonnie, Chair
Professional Standards Committee

The Code of Ethics, first adopted in 1913, continues to be a work in progress. There are changes to our Code of Ethics this year, and I recommend that everyone take a few minutes to read about them. 

The Code can be found on the CBR website -- go to Services -- then Professional Standards - where you'll find the Code of Ethics. It is a guide for measuring professional conduct and is enforceable by the Professional Standards Committee.

In an effort to spark interest and inspire all of us to become more familiar with the Code of Ethics, we will be publishing cases that have actually come before Board of REALTORS® hearing panels around the country.

The following is one such case:

The Case of -- "You'll Get a Better Deal Thru Me"
This case begins with an agent who has an exclusive representation agreement with his buyer. The buyer, out driving around one day, saw the sign of a listing agent on a property in which he might be interested. The buyer then called the number on the sign to ask about the property. During the conversation, the buyer was very forthright and stated that he already had his own real estate agent.

After learning that the buyer already had and agent, the listing agent nevertheless continued to offer information about the property. He even went so far as to tell the buyer that he could get a much better deal on this property if he were to make an offer without his own agent.

Only after the buyer again repeated that he already had an agent to whom he was obligated did the listing agent finally suggest that the buyer should call his own agent.

The buyer's agent, after learning the nature of his client's conversation with the listing agent, filed an ethics complaint with the Board, claiming that the listing agent's actions were in violation of Article 16 of the Code of Ethics.

Code of Ethics of the National Association of REALTORS® - Article 16
Article 16 states that: REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.

Standard of Proof in an Ethics Complaint
Clear, strong and convincing is the standard of proof applied in an ethics hearing. It is defined as "that measure or degree of proof which will produce a firm belief or conviction as to the allegations sought to be established."

The Hearing
At the ethics hearing, after seeing the evidence and hearing testimony from all the parties, the hearing panel determined that the combination of the listing agent's failure (after learning the buyer had his own agent) to respect that agency relationship, and his inducement to the buyer that he would get a better deal if he would work directly with him and without his own agent, was in fact behavior that violated Article 16.

The Penalty
Hearing panels are limited in the sanctions they may impose on a member found to have violated the Code of Ethics. The hearing panel considers that the true intent of ethics enforcement is education of the member, and will impose sanctions using the principal of progressive discipline. Possible sanctions range from the assessment of a $500 administrative fee, education courses, letters of reprimand or warning, up to a fine not to exceed $5,000.

In this case, the panel determined that the listing agent should be assessed the $500 administrative fee; receive a letter of reprimand with copy in file for three years; and be required to attend the ethics portion of the board's new member orientation.

Want to read more cases?
Log onto the CBR website -- go to Services -- Professional Standards?and Case Interpretations. Each Code of Ethics Article has cases that demonstrate how our Code of Ethics is applied in our day-today business.

Finally -- it is a privilege to be a REALTOR®, and we all have a responsibility to be familiar with our Code of Ethics. Follow it, and expect it to be followed by your fellow REALTORS®.