Changes to the Code of Ethics

Modifications make two standards of practice more specific; new standard requires information about other offers.

Read the full Code of Ethics updated for 2003.

The Code of Ethics and Standards of Practice, adopted in 1913 and amended many times since, is the cornerstone of the difference between REALTORS® and nonmember licensees. The following changes were approved by the NAR board of directors and became effective Jan. 1, 2003.

Additions to the Code of Ethics are red. Deletions are noted with strikethroughs.

Standard of Practice 1-12

When entering into listing contracts, REALTORS® must advise sellers/landlords of:

1. the REALTOR®’s general company policies regarding cooperation with and the amount(s) of any compensation that will be offered to subagents, buyer/tenant agents, and/or brokers acting in legally recognized non-agency capacities;
2. the fact that buyer/tenant agents or brokers, even if compensated by listing brokers, or by sellers/ landlords may represent the interests of buyers/tenants; and
3. any potential for listing brokers to act as disclosed dual agents, e.g. buyer/tenant agents. (Adopted 1/93, Renumbered 1/98, Amended 1/03)

Rationale: As sellers’ fiduciaries, listing brokers are required to promote their clients’ best interests. Listing agreements commonly authorize listing brokers to cooperate with other brokers and to offer compensation for cooperative services. While decisions about specific amounts of cooperative compensation are generally left to listing brokers, their seller-clients have a direct stake in the resulting levels of cooperation generated. Sellers are consequently entitled to know what their exclusive representatives are offering to potential cooperating brokers. Disclosure of cooperative compensation information to seller-clients will reassure those clients that their best interests are being represented.

Standard of Practice 1-15

REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, divulge the existence of offers on the property. (Adopted 1/03)

Standard of Practice 16-13

All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s agent or broker, and not with the client, except with the consent of the client’s agent or broker or except where such dealings are initiated by the client.

Before providing substantive services (such as writing a purchase offer or presenting a CMA) to prospective purchasers, sellers, tenants or landlords ("prospects"), REALTORS® shall ask prospects whether they are a party to any exclusive representation agreement. REALTORS® shall not knowingly provide substantive services concerning a prospective transaction to prospects who are parties to exclusive representation agreements, except with the consent of the prospects’ exclusive representatives or at the direction of prospects.

Rationale: Facilitates meaningful compliance with Article 16 by requiring REALTORS® to inquire of prospective clients and customers whether they are already subject to an exclusive representation agreement.

Send questions about ethics to texasrealtor@texasrealtors.com. Not all questions received can be answered.

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