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Ethics Q&A
Where are commision disputes settled? Are the words offered exclusively misleading?
Q A new agent goes out for a listing presentation and brings with her a graph that shows total units sold with a disclaimer on the bottom that states: “Based on data supplied by ABC Multiple Listing Service, which is not responsible for its accuracy.” The new agent uses numbers that don't even come up on the MLS.
I know there is something in the Code of Ethics that prohibits disparaging other REALTORS®, but I don’t know if there’s anything that addresses giving false information. I thought that by becoming a REALTOR®, you have pledged to uphold the highest standards in honesty and ethics.
A Article 12 of the Code of Ethics directly addresses this situation. It states: “REALTORS® shall be careful at all times to present a true picture in their advertising and representations to the public.” While the situation you describe sounds like a violation of Article 12, it is ultimately up to a hearing panel to decide for sure.
Another REALTOR® or a member of the public may bring a complaint against a REALTOR® for a possible violation of a specific article of the Code of Ethics.
Q I’d like to put the words offered exclusively on my for sale signs. My broker thinks he read that this phrase and similar ones violate Article 12 by giving buyers the impression they can only purchase the property through the listing agent.
Does it?
A Probably not. In a case study in NAR’s Code of Ethics and Arbitration Manual on this question, the hearing panel found that the listing agent did not breach her duty to present a true picture in her advertising. The listing agent successfully argued that buyers understood that a for sale sign generally means that buyers can deal with any broker they choose. The listing agent also defended her position by explaining that since she was indeed the seller’s exclusive agent, the signs were not false or misleading representations to the public.
Q I am involved in a commission dispute. The other broker says he wants to settle this at the Texas Real Estate Commission, because he thinks they will be less biased than our local association. Does TREC even have jurisdiction over procuring-cause cases?
A No. The Texas Real Estate Commission does not have the authority to settle commission disputes. These arguments are typically heard by a REALTOR® association. Article 17 of the Code of Ethics sets forth that procuring-cause disputes between REALTORS® from different firms must be submitted to arbitration rather than to litigation. However, litigation is an option if all parties waive their right to arbitrate. Litigation would not take place at the Texas Real Estate Commission, but at an appropriate court in which the dispute is filed.
Q The arbitration process includes many checks and balances, including thoroughly documented procedures and training for hearing panels and officers to follow so that personal bias does not influence an arbitration decision.
View the full Code of Ethics in the Prof. Standards section of TexasRealtors.com.
Send questions about ethics to texasrealtor@texasrealtors.com. Not all questions received can be answered.
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