Ethics Q&A

What are the rules on giveaways? When does a derogatory comment give cause for fair-housing concerns?

Q    An agent in our area gives a free dinner at an expensive restaurant to anyone who lists with her. Is this ethical?

A   Most likely. If the agent has clearly communicated that the free dinner is contingent upon the seller listing with that agent, the agent has not violated the Code of Ethics. This situation is covered in Article 12, which deals with presenting a true picture in advertising and representations to the public. Specifically, Standard of Practice 12-3 states:

"The offering of premiums, prizes, merchandise discounts or other inducements to list, sell, purchase, or lease is not, in itself, unethical even if receipt of the benefit is contingent on listing, selling, purchasing, or leasing through the REALTOR® making the offer. However, REALTORS® must exercise care and candor in any such advertising or other public or private representations so that any party interested in receiving or otherwise benefiting from the REALTOR®’s offer will have clear, thorough, advance understanding of all the terms and conditions of the offer. The offering of any inducements to do business is subject to the limitations and restrictions of state law and the ethical obligations established by any applicable Standard of Practice."

Q    I took a listing to sell a home for a client, and everything was moving along nicely. Then, in a later conversation with that client, he made a derogatory statement about gays. I thought the comment was offensive, but it caught me off guard, and I didn’t do or say anything about it. My client hasn’t said that he would refuse to sell the house to someone based on their sexual preference. Still, I’m worried about what will happen if a gay person or couple makes an offer, and my client refuses to accept their offer for no other reason than their sexual preference. What should I do?

A   Sexual orientation is not one of the groups referenced in Article 10 of the Code of Ethics. Neither is it one of the protected classes in fair-housing law. (The protected classes are race, color, religion, sex, handicap, familial status, and national origin.)

Some municipalities prohibit discrimination based on sexual orientation, but if that’s not the case in your situation, your client is within his rights even if he refuses to sell to a buyer who is gay.

However, if you find his comment or attitudes toward gay people objectionable or believe that he would refuse to sell on that basis, you can terminate the listing. TAR Form 1410 is an addendum specifically designed for terminating a listing agreement.

Had the comment been directed at someone in a protected class, you might want to strongly consider terminating the listing. Though the comment by itself might not constitute discrimination, it could be part of a pattern or an early signal that this client will discriminate against a member of a protected class.

Send your questions about ethics to texasrealtor@texasrealtors.com or fax to 512/370-2390. Not all questions received can be answered.

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