Ethics - The 3 R's.pptxEthics - The 3 R's.pptx

Ethics - The 3 R's.pptx

1. Ethics – The 3 R’s 3 Hours Ethics CE.5842001-RE (Classroom) Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 1

2. Housekeeping No phones or texting during the class. Please make sure that you sign in. Restrooms Direct attention to instructor. Refrain from distracting activities. Breaks Instructor Evaluations Attendance sign out Certificates of Completion Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 2

3. Ethics - The 3 R’s Requirements, Responsibility and Ramifications Objectives: For the Real Estate Professional : To know the requirements of becoming a REALTOR® To understand the importance of following the Code of Ethics To understand their responsibilities to the public, clients, customers and REALTORS® To be aware of the ramifications of any unethical conduct of the licensee Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 3

4. What are Ethics? The rules of conduct recognized in respect to a  particular class of human actions or a particular group. What are ethics in real estate? A set of Professional Courtesies for Real Estate Licensees to abide by in order to create a higher standard of practice for the profession and the public Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 4

5. Ethics and the Objectives of the NATIONAL ASSOCIATION OF REALTORS® 1. To provide facilities for education, to raise the standards of real estate practice, and preserve the right of property ownership in the interest of the public welfare 2. To promote and maintain high standards of conduct in the transaction of real estate business 3. To formulate and promulgate a Code of Ethics for members of the National Association 4. To license the right to display and use the emblem seal of the NATIONAL ASSOCIATION OF REALTORS®, and the right to use the terms of REALTOR®, REALTORS®, and REALTOR-ASSOCIATE® 5. To inform the public of the advantages of transacting business with REALTORS® and to encourage use by members of the REALTOR® mark Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 5

6. When is a Licensee a REALTOR®? Applicants for REALTOR® membership are required to complete a minimum of two hours and thirty minutes of orientation on the Code of Ethics of the National Association of REALTORS® To earn a designation, a licensee has taken coursework and demonstrated specific skills, performance and knowledge in a particular area of the real estate industry. The oath to follow the Golden Rule is administered at these courses. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 6

7. Regarding the REALTOR® Trademark The term REALTOR® has only one, meaning: REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics* (Nar membership manual re: definition of REALTOR) NRS 645.633  1. (a) Willfully using any trade name, service mark or insigne of membership in any real estate organization of which the licensee is not a member, without the legal right to do so. This emblem may only be used by members of the NAR REALTOR®, REALTORS®, or REALTOR-ASSOCIATE® in good standing. This logo may not be edited. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 7

8. 17 Articles of the NAR Code of Ethics The 17 Articles are broad statements of ethical principals. Since the Code of Ethics was adopted in 1913, the Code has required the cooperation between members, respect of other broker’s exclusive relationships with clients, and the use of arbitration concerning contractual disputes. The National Code of Ethics is Broken into 3 Categories: Articles 1-9 Duties to Clients and Customers Articles 10-14 Duties to the public Articles 15-17 Duties to Realtors Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 8

9. Articles 1-9 Duties to Clients and Customers Article 1 - Protect and Promote your Client’s interests, but be honest with all parties As the agent for your client, you must pledge to protect and promote the interests of your clients. This is your fiduciary duty. You still have the obligation to treat all parties with fairness and honesty. The agent must not mislead sellers, buyers or tenants in any area of the transaction The agent must disclose to the parties in a transaction the following: If the agent is a party to the transaction or has a relationship to anyone else in the transaction If the agent is representing both parties, in writing and agreed to by both parties The source of all compensation to the brokerage Any Business relationship between the brokerage and vendors Any fees to be charged to the principal Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 9

10. Article 1(continued) To preserve all confidential information of the client including 1 year after the termination of the professional relationship (NRS 645. ) The broker/agent may reveal information in the following instances: With Written permission of the principal Through a court order If the client is breaking the law or has the intention of breaking the law If the REALTOR® needs to defend himself of wrongful conduct NRS 645.254- see attachment Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 10

11. Case study Article 1- Duty to client and Customer Case #1-1: Fidelity to Client (Originally Case #7-1. Revised May 1988. Transferred to Article 1 November 1994.) Client A complained to a Board of REALTORS® that two of its members, REALTORS® B and his sales associate, REALTOR-ASSOCIATE® C, had failed to represent the client’s interests faithfully by proposing to various prospective buyers that a price less than the listed price of a house be offered. His complaint specified that REALTOR® B, in consultation with him, had agreed that $137,900 would be a fair price for the house, and it had been listed at that figure. The complaint also named three different prospective buyers who had told Client A that while looking at the property, REALTOR-ASSOCIATE® C, representing REALTOR® B, when asked the price had said, “It’s listed at $137,900, but I’m pretty sure that an offer of $130,000 will be accepted.” Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 11

12. Case study Article 1- Duty to client and Customer REALTOR® B and REALTOR-ASSOCIATE® C were notified of the complaint and requested to be present at a hearing on the matter scheduled before a Hearing Panel of the Board’s Professional Standards Committee. During the hearing, REALTOR® B confirmed that he had agreed with Client A that $137,900 was a fair price for the house, and that it was listed at that figure. He added that he had asked for a 90-day listing contract as some time might be required in securing the full market value. Client A had agreed to do this but had indicated that he was interested in selling within a month even if it meant making some concession on the price. The discussion concluded with an agreement on listing at $137,900 and with REALTOR® B agreeing to make every effort to get that price for Client A. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 12

13. Case study Article 1- Duty to client and Customer REALTOR-ASSOCIATE® C said in the hearing that REALTOR® B had repeated these comments of Client A and he, REALTOR-ASSOCIATE® C, had interpreted them as meaning that an early offer of about 10 percent less than the listed price would be acceptable to the seller, Client A. Questioning by the Hearing Panel established that neither REALTOR® B nor REALTOR-ASSOCIATE® C had been authorized to quote a price other than $137,900. It was the Hearing Panel’s conclusion that REALTOR® B was not in violation of Article 1 since he had no reason to know of REALTOR-ASSOCIATE® C’s actions. The panel did find REALTOR-ASSOCIATE® C in violation of Article 1 for divulging his knowledge that the client was desirous of a rapid sale even if it meant accepting less than the asking price. The panel noted that such a disclosure was not in the client’s best interest and should never be made without the client’s knowledge and consent. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 13

14. Case study Article 1- Duty to client and Customer REALTOR-ASSOCIATE® C said in the hearing that REALTOR® B had repeated these comments of Client A and he, REALTOR-ASSOCIATE® C, had interpreted them as meaning that an early offer of about 10 percent less than the listed price would be acceptable to the seller, Client A. Questioning by the Hearing Panel established that neither REALTOR® B nor REALTOR-ASSOCIATE® C had been authorized to quote a price other than $137,900. It was the Hearing Panel’s conclusion that REALTOR® B was not in violation of Article 1 since he had no reason to know of REALTOR-ASSOCIATE® C’s actions. The panel did find REALTOR-ASSOCIATE® C in violation of Article 1 for divulging his knowledge that the client was desirous of a rapid sale even if it meant accepting less than the asking price. The panel noted that such a disclosure was not in the client’s best interest and should never be made without the client’s knowledge and consent. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 14

15. Articles 1-9 Duties to Clients and Customers Article 2: Avoid exaggeration, misrepresentation, and concealment of pertinent facts. Do not reveal facts that are confidential under the scope of your agency relationship. As a licensee, practice only in your area of expertise Disclose material facts and material defects to the principal Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 15

16. Case study Article 2 - Duty to Client and Customer Case #2-4: Obligation to Ascertain Pertinent Facts (Revised Case #9-10 May 1988. Transferred to Article 2 November 1994.) Shortly after REALTOR® A, the listing broker, closed the sale of a home to Buyer B, a complaint was received by the Board charging REALTOR® A with an alleged violation of Article 2 in that he had failed to disclose a substantial fact concerning the property. The charge indicated that the house was not connected to the city sanitary sewage system, but rather had a septic tank. In a statement to the Board’s Grievance Committee, Buyer B stated that the subject was not discussed during his various conversations with REALTOR® A about the house. However, he pointed out that his own independent inquiries had revealed that the street on which the house was located was “sewered” and he naturally assumed the house was connected. He had since determined that every other house on the street for several blocks in both directions was connected. He stated that REALTOR® A, in not having disclosed this exceptional situation, had failed to disclose a pertinent fact. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 16

17. Case study Article 2 - Duty to Client and Customer REALTOR® A’s defense in a hearing before a Hearing Panel of the Professional Standards Committee was: That he did not know this particular house was not connected with the sewer; That in advertising the house, he had not represented it as being connected; That at no time, as Buyer B conceded, had he orally stated that the house was connected; That it was common knowledge that most, if not all, of the houses in the area were connected to the sewer; and That the seller, in response to REALTOR® A’s questions at the time the listing was entered into, had stated that the house was connected to the sewer. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 17

18. Case study Article 2 - Duty to Client and Customer The panel determined that the absence of a sewer connection in an area where other houses were connected was a substantial and pertinent fact in the transaction; but that the fact that the house was not connected to the sewer was not possible to determine in the course of a visual inspection and, further, that REALTOR® A had made appropriate inquiries of the seller and was entitled to rely on the representations of the seller. The panel concluded that REALTOR® A was not in violation of Article 2. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 18

19. Articles 1-9 Duties to Clients and Customers Article 3: Cooperate with other Real Estate professionals to advance Client’s best interests Relates to the obligation to share information on listed property and to make a property available to other brokers for showing to prospective buyers when it is in the best interests of the sellers. See Pathways to Professionalism, Respect for Peers Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 19

20. Articles 1-9 Duties to Clients and Customers Article 4 When buying or selling, make your position in the transaction or interest known. This is for the protection of all parties and this disclosure must be in writing. Article 5 Disclose present or contemplated interest in any property to all parties. NRS 645.252 1(c) Duties of licensee acting as agent in a real estate transaction Article 6 REALTORS® shall not accept any commission, rebate or profit on expenditures made for their client without the client’s written consent. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 20

21. Articles 1-9 Duties to Clients and Customers Article 7 REALTORS® shall not accept compensation from more than 1 party without the informed, written consent of all parties of the transaction. Article 8 REALTORS® shall keep funds of clients and customers in a special account separated from their own funds. Article 9 Assure whenever possible that transactional details are in clear and understandable language and in writing for the protection of all parties. A copy of each agreement will be furnished to each party upon their signing or initialing. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 21

22. Articles 10-15 Duties to the Public Article 10 Relating to Fair Housing, the REALTOR® shall provide equal service to all clients and customers. There is no room for discrimination of any sort. Providing reliable demographic information may be permitted to assist with or complete a real estate transaction. REALTORS® shall not advertise in any media concerning real estate regarding discrimination or preferences based on: Race 4. Sex/Gender 7. National Origin Color 5. Handicap 8. Sexual Orientation Religion 6. Familial Status 9. Gender Identity Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 22

23. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 23

24. Articles 10-15 Duties to the Public Article 11 REALTORS® must be knowledgeable and competent in the field of practice in which they ordinarily engage OR obtain assistance from one who does or disclose lack of experience to the principals. REALTORS® may not offer information or give advise that is outside their area of expertise. Preparing opinions of Real Property Value, the REALTOR®: Must be knowledgeable about the type of property; Have access to the information and resources necessary to offer an accurate opinion; and Be familiar with the area where the subject property is located. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 24

25. Articles 10-15 Duties to the Public Article 12 REALTORS® shall be honest and truthful in all communications, and present a true picture in their advertising, marketing and other representations. The status as Real Estate Professionals is readily apparent, and that any communication is from a Real Estate Professional. Offering free services or services at a discount must be disclosed. REALTORS® must not offer a home for sale or lease or advertise without the authority of the homeowner or representative. REALTORS® shall not quote a price different than that which was agreed upon by the homeowner. The name of the Brokerage or Firm must be in all advertising by a licensee. NRS 645.315- see handout Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 25

26. Articles 10-15 Duties to the Public Article 12 (cont.) Advertising in any form must be current and accurate. Concerning internet advertising, the licensee may not engage in deceptive Marketing, use of advertising developed by other people, mislead consumers or deceptively use metatags, keywords or other methods to direct internet traffic If the licensee intends to share or sell consumer information gathered via internet, it must be disclosed. Use and registration of URL’s must present a true picture. Use of only registered designations, certifications and other credentials that the licensee is permitted to use if they are legitimately entitled. See NRS 645.633 regarding trademarks. See NRS 645.315 regarding advertising. Article 13 REALTORS® will not engage in the unauthorized practice of Law. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 26

27. Case study Article 12 - Duties to the Public Case #12-11: Advertisements by Individuals Other Than the Listing Broker REALTOR® A placed a full-page ad in the Sunday supplement of his local newspaper. In the body of the ad were pictures of several homes and their addresses. At the top of the page was the following: “We’ve sold these—we can sell yours, too.” The following week, three complaints were received from other Board Members alleging that REALTOR® A’s ad was in violation of Article 12. Each of the complaints noted that REALTOR® A had participated in the transaction as the successful cooperating broker who had located the eventual purchasers, but the complaints also claimed that REALTOR® A’s claim to have “sold” these properties was false and misleading since none of the properties had been listed with him and, in one instance, the sale had yet to close. Since all the complaints involved the same advertisement, they were consolidated to be heard at the same hearing before a Hearing Panel of the Professional Standards Committee. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 27

28. Case study Article 12 - Duties to the Public At the hearing, REALTOR® A defended his actions on the basis that although the properties had been listed with other brokers, he had been the “selling” or “cooperating” broker and was entitled to advertise his role in the transactions. The Hearing Panel agreed with REALTOR® A’s reasoning in their decision, pointing out that Article 12 as interpreted by Standard of Practice 12-7, provides that cooperating brokers (selling brokers) may claim to have “sold” the property and that such claims may be made by either the listing broker or the cooperating broker or by both of them upon acceptance of a purchase offer by the seller. The panel also noted that REALTOR® A could have shown that he had “participated in” or had “cooperated in” these transactions and met his ethical obligations. The panel’s decision also indicated that during the existence of any listing, the cooperating broker’s rights to advertise and market flow from the listing broker. However, claims of this nature were not advertisements of the properties but rather were advertisements of the broker’s services. The only limitation on the ability of a cooperating broker to claim or to represent that a property had been “sold” was that the listing broker’s consent would be required before a “sold” sign could physically be placed on the seller’s property prior to closing. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 28

29. Case study Article 12 - Duty to the public Case #12-1: Absence of Name on Sign  Prospect A observed a sign on a vacant lot reading: “For Sale—Call 330-5215.” Thinking he would be dealing with a For Sale by Owner, he called the number on the sign. He was surprised and offended that the lot was exclusively listed by REALTOR® A, and the telephone number on the sign was the home number of REALTOR-ASSOCIATE® B in REALTOR® A’s office. Prospect A filed a complaint against REALTOR® A and REALTOR-ASSOCIATE® B. alleging a violation of Article 12 of the Code of Ethics. At the hearing, REALTOR® A stated that he permitted REALTOR-ASSOCIATE® B to put up the sign. REALTOR-ASSOCIATE® B’s defense was that the sign was not a “formal” advertisement, such as a newspaper advertisement, business card, or billboard, to which he understood Article 12 to apply. The Hearing Panel determined that the sign was an advertisement within the meaning of Article 12; that its use violated that Article of the Code; and that both REALTOR® A and REALTOR-ASSOCIATE® B were in violation of Article 12.  Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 29

30. Articles 10-15 Duties to the Public Article 14 REALTORS® are to be willing participants in the Code Enforcement Procedures They will not impede the Board’s investigative or disciplinary proceeding s by filing frivolous or multiple ethics complaints based on the same event or transaction Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 30

31. Articles 15-17 Duties to REALTORS® Article 15 Ensure your comments about other Real Estate professionals or their business practices are truthful and not misleading. REALTORS® must not knowingly file false or unfounded ethics complaints. To not knowingly make false statements regarding hearsay or rumor of another licensee in any form of media. Any false statement made will be remedied through publishing a clarification of the mistake and a withdrawal of said violation. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 31

32. Case study Article 15 - Duties to REALTORS® Case #15-2: Intentional Misrepresentation of a Competitor’s Business Practices Following a round of golf early one morning, Homeowner A approached REALTOR® X. “We’ve outgrown our home and I want to list it with you,” said Homeowner A. “I’m sorry,” said REALTOR® X, “but I represent buyers exclusively.” “Then how about REALTOR® Z?,” asked Homeowner A, “I’ve heard good things about him.” “I don’t know if I would do that,” said REALTOR® X, “while he does represent sellers, he doesn’t cooperate with buyer brokers and, as a result, sellers don’t get adequate market exposure for their properties.” Later that day, Homeowner A repeated REALTOR® X’s remarks to his wife who happened to be a close friend of REALTOR® Z’s wife. Within hours, REALTOR® Z had been made aware of REALTOR® X’s remarks to Homeowner A earlier in the day. REALTOR® Z filed a complaint against REALTOR® X charging him with making false and misleading statements. REALTOR® Z’s complaint was considered by the Grievance Committee which determined that an ethics hearing should be held. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 32

33. Case study Article 15 - Duties to REALTORS® At the hearing, REALTOR® Z stated, “I have no idea what REALTOR® X was thinking about when he made his comments to Homeowner A. I always cooperated with other REALTORS®.” REALTOR® X replied, “That’s not so. Last year you had a listing in the Multiple Listing Service and when I called to make an appointment to show the property to the buyer, you refused to agree to pay me.” REALTOR® Z responded that he had made a formal offer of subagency through the MLS with respect to that property but had chosen not to offer compensation to buyer agents through the MLS. He noted, however, that the fact that he had not made a blanket offer of compensation to buyer agents should not be construed as a refusal to cooperate and that he had, in fact, cooperated with REALTOR® X in the sale of that very property. In response to REALTOR® Z’s questions, REALTOR® X acknowledged that he had shown his buyer-client REALTOR® Z’s listing and that the buyer had purchased the property. Moreover, REALTOR® X said, upon questioning by the panel members, he had no personal knowledge of any instance in which REALTOR Z had refused to cooperate with any other broker but had simply assumed that REALTOR® Z’s refusal to pay the compensation REALTOR® X had asked for was representative of a general practice on the part of REALTOR® Z. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 33

34. Case study Article 15 - Duties to REALTORS® The Hearing Panel, in its deliberations, noted that cooperation and compensation are not synonymous and though formal, blanket offers of cooperation and compensation can be communicated through Multiple Listing Services, even where they are not, cooperation remains the norm expected of REALTORS®. However, to characterize REALTOR® Z’s refusal to pay requested compensation as a “refusal to cooperate” and to make the assumption and subsequent statement that REALTOR® Z “did not cooperate with buyer agents” was false, misleading, and not based on factual information. Consequently, REALTOR® X was found in violation of Article 15. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 34

35. Articles 15-17 Duties to REALTORS® Article 16 Respect exclusive representation or exclusive broker relationship agreements that other Real Estate Professionals have with their clients. REALTORS® may not solicit property owners who have been identified by a real estate sign, MLS, or other marketing which shows the property is in an exclusive agency relationship with another Real Estate professional until that agency relationship has expired or been withdrawn. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 35

36. Articles 15-17 Duties to REALTORS® Article 16 REALTORS® may not solicit property owners who have been identified by a real estate sign, MLS, or other marketing which shows the property is in an exclusive agency relationship with another Real Estate professional. see NRS 645.635 REALTORS® shall not ask clients to pay more than one commission except with their informed consent. Compensation will be a transaction between the Principal brokers and not through the sub agents. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 36

37. Articles 15-17 Duties to REALTORS® Article 16 Signs that show the home is listed, may only be placed on the property with the consent of the seller or his representative. REALTORS® shall not induce clients of another Real Estate professional to cancel any contracts in order to make them their new client. See NRS 645.635 Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 37

38. Case study Article 16 - Duties to REALTORS® Case #16-2: Respect for Agency (Revised Case #21-6 May 1988. Transferred to Article 16 November 1994.) Client A gave a 180-day exclusive right to sell listing of a commercial property to REALTOR® B, specifying that no “for sale” sign was to be placed on the property. REALTOR® B and his sales associates started an intensive sales effort which, after three months, had produced no offer to buy. But it had called attention to the fact that Client A’s property was for sale. When REALTOR® C heard of it, he called on Client A, saying that he understood that his property was, or soon would be, for sale, and that if Client A would list the property with him exclusively, he felt confident that he could provide prompt action. Client A said the property was exclusively listed with REALTOR® B under a contract that still had about 90 days to run. “In that case,” said REALTOR® C, “you are bound for the next 90 days to REALTOR® B. I have a really outstanding organization, constantly in touch with active buyers interested in this class of property. I am in a position to render you an exceptional service, and I will plan to call you again in 90 days or so.” Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 38

39. Case study Article 16 - Duties to REALTORS® The property remained unsold during the term of REALTOR® B’s listing contract. REALTOR® C called again on Client A and obtained his assurance that he would sign an exclusive listing of the property upon expiration of the listing contract. When REALTOR® B called on Client A on the last day of the listing contract to seek its renewal, Client A told him of REALTOR® C’s two visits. “I was impressed by REALTOR® C’s assurance of superior service” Client A told REALTOR® B, “and in view of the fact that my listing with you produced no definite offer in the 180-day period, I have decided to give REALTOR® C a listing tomorrow.” REALTOR® B filed a complaint with the Grievance Committee of the Board, outlined the facts, and charged that REALTOR® C’s conduct had been inconsistent with Article 16 of the Code of Ethics. The Grievance Committee referred the matter to the Professional Standards Committee. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 39

40. Case study Article 16 - Duties to REALTORS® At the conclusion of the hearing, the panel found that REALTOR® C had violated Article 16 by failing to respect the exclusive agency of REALTOR® B. The panel’s decision advised that REALTOR® C’s original contact with Client A, made at a time when he had no knowledge of REALTOR® B’s exclusive listing, was not in itself unethical, but that as soon as he learned of REALTOR® B’s status as the client’s exclusive agent, he should have taken an attitude of respect for the agency of another REALTOR®, and refrained from any effort to get the listing until after the expiration date of the original contract. REALTOR® C’s attitude of regarding the client’s relationship with REALTOR® B as a kind of misfortune, of presenting his own service as superior to REALTOR® B’s, and of suggesting to the client that, having a better capacity to serve him, he could wait until REALTOR® B’s listing had expired, was, the panel said, contrary to the respect for another REALTOR®’s exclusive agency required by Article 16. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 40

41. Case study Article 16 - Duties to REALTORS® The Hearing Panel’s decision further advised REALTOR® C that he would have conducted himself in accord with Article 16 if, upon learning of REALTOR® B’s status as exclusive agent, he had expressed his willingness to cooperate with REALTOR® B in the sale of Client A’s property. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 41

42. Articles 15-17 Duties to REALTORS Article 17 In the event of contractual disputes between REALTORS® associated with different firms, the REALTORS® will mediate/arbitrate the dispute if the local board requires it. Examples: Entitlement for compensation Procuring cause Unethical comments or actions Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 42

43. What happens when the Code of Ethics is violated? Only REALTORS®, REALTOR-ASSOCIATES® as members of the NAR are subject to the Code of Ethics. Only violations of the articles can result in disciplinary action. A licensee may not be found in violation of standards of practice, only it’s founding article. If the code of Ethics conflicts with the law, the law will take precedence. Associations do not determine whether law or regulations have been violated. These decisions must be made by the regulatory authorities or courts. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 43

44. End-of-course Quiz You are now ready to take the end-of-course quiz. Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 44

45. End-of-course Quiz 1. There are 17 articles and 4 sections in the Code of Ethics. A. True B. False Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 45

46. End-of-course Quiz 2. Only the public can file a complaint against a REALTOR®. A. True B. False Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 46

47. End-of-course Quiz 3. The Code of Ethics was adopted to establish standards of conduct in the Industry. A. True B. False Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 47

48. End-of-course Quiz 4. The licensee may use the REALTOR® trademark whether a member of NAR or not. A. True B. False Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 48

49. End-of-course Quiz 5. The Code of Ethics requires REALTORS® to respect agency relationships that other REALTORS® have with their clients. A. True B. False Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 49

50. End-of-course Quiz 6. The REALTOR® representing the seller must be careful not to say anything about the property or the price which would hard the owner’s interests. A. True B. False Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 50

51. End-of-course Quiz 7. The Code of Ethics prohibits misrepresentation or exaggeration about pertinent facts regarding the property or the transaction. A. True B. False Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 51

52. End-of-course Quiz 8. The Golden Rule is part of the Preamble of the Code of Ethics. A. True B. False Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 52

53. End-of-course Quiz 9. The REALTOR® has an obligation to protect and promote the interests of his or her clients regardless of the effect on any other party or REALTOR® . A. True B. False Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 53

54. End-of-course Quiz 10. Understanding the Fair Housing laws is an important part of being a competent REALTOR®. A. True B. False Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 54

55. Ethics – The 3 R’s 3 Hours Ethics CE.5842001-RE (Classroom) Copyright 2021 Real Estate School of Nevada, Inc. All Rights Reserved. 55