Changes to the Code of Ethics.

Several modifications take effect this year.

These changes to the Code of Ethics became effective Jan. 1, 2004. Additions are highlighted in yellow. Deletions are noted with strikethroughs.

Standard of Practice 1-2

The duties the Code of Ethics imposes are applicable whether REALTORS® are acting as agents or in legally recognized non-agency capacities except that any duty imposed exclusively on agents by law or regulation shall not be imposed by this Code of Ethics on REALTORS® acting in non-agency capacities.

As used in this Code of Ethics, “client” means the person(s) or entity(ies) with whom a Realtor® or a REALTOR®’s firm has an agency or legally recognized non-agency relationship; “customer” means a party to a real estate transaction who receives information, services, or benefits but has no contractual relationship with the REALTOR® or the REALTOR®’s firm; “prospect” means a purchaser, seller, tenant, or landlord who is not subject to a representation relationship with the REALTOR® or REALTOR®’s firm; “agent” means a real estate licensee (including brokers and sales associates) acting in an agency relationship as defined by state law or regulation; and “broker” means a real estate licensee (including brokers and sales associates) acting as an agent or in a legally recognized non-agency capacity.

Standard of Practice 1-13

When entering into buyer/tenant agreements, REALTORS® must advise potential clients of:

1) the REALTOR®’s general company policies regarding cooperation; and compensation; and

2) the amount of compensation to be paid by the client;

3) the potential for additional or offsetting compensation from other brokers, from the seller or landlord, or from other parties; and

4) 2) any potential for the buyer/tenant representative to act as a disclosed dual agent, e.g. listing broker, subagent, landlord’s agent, etc.

Standard of Practice 3-6

REALTORS® shall disclose the existence of an accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation.

Article 9

REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases shall be are in writing, and shall be in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing.

Article 16

REALTORS® shall not engage in any practice or take any action inconsistent with the agency or other exclusive relationship recognized by law representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.

Standard of Practice 16-2

Article 16 does not preclude REALTORS® from making general announcements to prospective clients prospects describing their services and the terms of their availability even though some recipients may have entered into agency agreements or other exclusive relationships with another REALTOR®. A general telephone canvass, general mailing or distribution addressed to all prospective clients prospects in a given geographical area or in a given profession, business, club, or organization, or other classification or group is deemed “general” for purposes of this standard.

Article 16 is intended to recognize as unethical two basic types of solicitations:

First, telephone or personal solicitations of property owners who have been identified by a real estate sign, multiple listing compilation, or other information service as having exclusively listed their property with another REALTOR®; and

Second, mail or other forms of written solicitations of prospective clients prospects whose properties are exclusively listed with another REALTOR® when such solicitations are not part of a general mailing but are directed specifically to property owners identified through compilations of current listings, “for sale” or “for rent” signs, or other sources of information required by Article 3 and Multiple Listing Service rules to be made available to other REALTORS® under offers of subagency or cooperation.

Standard of Practice 16-3

Article 16 does not preclude REALTORS® from contacting the client of another broker for the purpose of offering to provide, or entering into a contract to provide, a different type of real estate service unrelated to the type of service currently being provided (e.g., property management as opposed to brokerage) or from offering the same type of service for property not subject to other brokers’ exclusive agreements. However, information received through a Multiple Listing Service or any other offer of cooperation may not be used to target clients of other REALTORS® to whom such offers to provide services may be made.

Standard of Practice 16-7

The fact that a client prospect has retained a REALTOR® as an agent or in another exclusive relationship representative or exclusive broker in one or more past transactions does not preclude other REALTORS® from seeking such former client’s prospect’s future business.

Standard of Practice 16-9

REALTORS®, prior to entering into an agency agreement or other exclusive a representation relationship agreement, have an affirmative obligation to make reasonable efforts to determine whether the client prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service.

Standard of Practice 16-10

REALTORS®, acting as agents of, or in another relationship with, buyers or tenants representatives or brokers, shall disclose that relationship to the seller/landlord’s agent representative or broker at first contact and shall provide written confirmation of that disclosure to the seller/landlord’s representative agent or broker not later than execution of a purchase agreement or lease.

Standard of Practice 16-11

On unlisted property, REALTORS® acting as buyer/tenant agents representatives or brokers shall disclose that relationship to the seller/landlord at first contact for that client buyer/tenant and shall provide written confirmation of such disclosure to the seller/landlord not later than execution of any purchase or lease agreement.

REALTORS® shall make any request for anticipated compensation from the seller/landlord at first contact.

Standard of Practice 16-12

REALTORS®, acting as agents representatives or brokers of sellers/landlords or as subagents of listing brokers, shall disclose that relationship to buyers/tenants as soon as practicable and shall provide written confirmation of such disclosure to buyers/tenants not later than execution of any purchase or lease agreement.

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 representative or broker, and not with the client, except with the consent of the client’s agent representative 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.

Standard of Practice 16-16

REALTORS®, acting as subagents or buyer/tenant agents representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer’s agents/tenants representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.

Standard of Practice 16-17

REALTORS®, acting as subagents or as buyer/tenant agents representatives or brokers, shall not attempt to extend a listing broker’s offer of cooperation and/or compensation to other brokers without the consent of the listing broker.

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

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