Term
| true or false:In 1908, the National Association of REALTORS® was formed. In 1913, the Association adopted the industry’s first code of ethical conduct, the Code of Ethics, to protect the public and promote professionalism and integrity of licensees. |
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| true or false: While it encourages competition, the Code of Ethics clearly requires that competitive spirit to be secondary to the interests of the client. |
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| true or false: The Preamble of the Code emphasizes the importance of wide distribution of land ownership by individuals as well the highest and best use of the land. |
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| There are three main sections to the Code of Ethics: |
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Definition
Duties to clients and customers: Articles 1 through 9
Duties to the public: Articles 10 – 14
Duties to REALTORS®: Articles 15 – 17 |
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Term
| Since inception in 1913, the Code of Ethics has required that members deal with monetary disputes in what manner? |
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Definition
| Arbitrate monetary disputes rather than litigate. |
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| The Preamble of the Code emphasizes what type of land use? |
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Definition
| The highest and best use of the land. |
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Term
| true or false: Members of both the Grievance Committee and the Professional Standards Committee of the local association are appointed by the Association President. |
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Definition
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| REALTOR code of ethics article 1 |
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Definition
| protect interest of clients; treat all parties honestly |
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| REALTOR code of ethics article 2 |
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Definition
| disclose material facts; avoid misleading information or concealment of facts pertinent to the property or transaction |
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| REALTOR code of ethics article 3 |
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| REALTOR code of ethics article 4 & 5 |
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Definition
| realtors must, when buying or selling properties themselves or assisting immediate family members or members of their company, or any entity in which they have ownership interest, disclose in writing their true position to the other part or his/her agent. |
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| REALTOR code of ethics article 6 |
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Definition
| obtain clients consent for rebates, commissions, profits; disclose interest in recommended services |
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| REALTOR code of ethics article 7 |
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Definition
| disclose compensation sources |
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| REALTOR code of ethics article 8 |
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Definition
| keep a separate escrow account |
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| REALTOR code of ethics article 9 |
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Definition
| put agreements in writing, keep documents updated |
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| REALTOR code of ethics article 10 |
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| REALTOR code of ethics article 11 |
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Definition
| do not provide service outside area of expertise e.g., type of real estate (commercial, residential, agricultural, etc.), geographic area, type of service offered (e.g., property management, consultant services) |
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| REALTOR code of ethics article 12 |
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Definition
| advertise accurately without misleading |
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| REALTOR code of ethics article 13 |
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Definition
| do not practice law; recommend legal counsel when warranted |
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| REALTOR code of ethics article 14 |
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Definition
| cooperate with grievance or ethics hearings; keep related information confidential |
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| REALTOR code of ethics article 15 |
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Definition
| do not make misleading statements about other real estate professionals |
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| REALTOR code of ethics article 16 |
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Definition
| respect and disclose agency relationships |
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| REALTOR code of ethics article 17 |
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| Standard of Practice 11-1 also added the following required disclosures for opinions of value prepared other than to obtain a listing or assist a potential purchaser in formulating a price, unless the party requests a specific type of report: |
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Definition
whether and when a physical inspection of the property’s exterior was conducted
whether and when a physical inspection of the property’s interior was conducted
whether the Realtor® has any conflicts of interest. |
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Term
| true or false: The Grievance committee has two areas of responsibility – ethics proceedings and arbitration proceedings. |
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Definition
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| true or false: If the Grievance Committee determines that a potential violation has occurred, it passes the complaint on to the Professional Standards Committee for resolution. The Grievance Committee never determines whether a violation has occurred, but serves as a screening committee. |
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Definition
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Term
| The Professional Standards Committee has the responsibility of |
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Definition
| determining if there has indeed been a violation of the Code of Ethics. A hearing is scheduled, with the Hearing Panel comprised of members of the Professional Standards Committee. |
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Term
| The Hearing Panel meets privately to determine if there has been a violation. If the accused is found guilty, one or more of the following disciplines may be given: |
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Definition
Letter of Warning
Letter of Reprimand
Education
Fine up to $5,000
Probation for up to one year
Suspension for not less than 30 days nor more than one year
Expulsion from membership for period of one to three years
Suspension or termination of MLS privileges.
Administrative processing fee (if in violation) not to exceed $500
Note that the discipline by the Hearing Panel may not include licensure discipline (probation, suspension, revocation). The Hearing Panel is determining whether Articles of the Code have been violated; the Panel is not determining whether there have been license law violations, and the Panel has no authority to discipline the license. |
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Term
| true or false: ethics complaints are processed by the Grievance Committee, Professional Standards Committee, and the Board of Directors. |
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Definition
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Term
| What type of disputes fall under arbitration? |
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Definition
| Monetary disputes among broker members of the Association. |
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Term
| The Hearing Panel may not issue what type of sanctions? |
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Definition
| Discipline such as probation, suspension, and license revocation. |
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Term
true or false: The Hearing Panel makes its decision based on NAR’s Arbitration Guidelines in the Code of Ethics and Arbitration Manual. The focus of the decision is typically “procuring cause.”
The Hearing Panel determines which REALTOR® is entitled to the disputed commission. Payment can usually be enforced judicially. |
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Definition
| starting a series of events without interruption that result in the sale |
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| true or false: Although the Hearing Panel may question the parties and their witnesses for clarification of the facts, the burden of proof (preponderance of evidence) is on the party requesting the arbitration. |
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| is a voluntary procedure in which a trained, neutral third-party professional (“mediator’) assists the parties in arriving at an agreement or resolution. The mediation agreement can be in lieu of having the dispute resolved by an arbitration hearing panel. |
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Term
| what is the difference between mediation and arbitration? |
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Definition
| With mediation, the final decision is a reached agreement between the two conflicting parties, while arbitration calls on an arbitrator to analyze the case details and reach a verdict |
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Term
true or false regarding mediation - If the parties reach a written agreement, the matter cannot be subject to future litigation or arbitration. The written agreement is binding and enforceable in a court of law.
The mediator does not make the decision regarding an agreement, but if no agreement is reached, the mediator can recommend a solution. If rejected by either party, the arbitration process proceeds. |
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Definition
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| What action does the Grievance Committee take when it determines the issue is suitable for arbitration? |
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Definition
| It sends a request to the Chairperson of the Professional Standards Committee. |
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Term
| What is the judicial recourse, if the parties reach a written agreement in mediation? |
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Definition
| The matter cannot be subject to future litigation or arbitration. |
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Term
| In most monetary disputes, the main focus of the Hearing Panels is to identify what action? |
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Definition
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