Ethics Q&A

Can an agent send a newsletter that lists recently sold properties if he didn’t participate in the transaction?

Q    The other day while looking through my mail at the house, I noticed a "newsletter" from another agent in our area. As I was about to toss it in the trash, something caught my eye. A property that I listed and sold was included in a list of properties under a heading of "Recently Sold." It had addresses, the number of bedrooms and baths, and selling prices. Since the agent who sent the newsletter didn’t actually sell the properties he put on that list, doesn’t his newsletter violate the truth-in-advertising requirements in NAR’s Code of Ethics?

A   Perhaps. Article 12 states: "REALTORS® shall be careful at all times to present a true picture in their advertising and representations to the public." Standard of practice 12-7 further spells out that, "Only REALTORS® who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have ‘sold’ the property."

There are two case studies in NAR’s Code of Ethics and Arbitration Manual that deal with this issue. In one of the cases, a hearing panel found that the newsletter writer had violated the Code of Ethics; the other case featured an agent with a newsletter that, according to a hearing panel, did not violate the Code of Ethics.

The difference between the two? The second REALTOR® clearly noted in his newsletter that the information about the recently sold properties came from the MLS, and the properties were listed and sold by various MLS participants.

More details would be required to determine if the newsletter you received violated the Code of Ethics. Even then, it would be up to a hearing panel to determine. One additional consideration: The newsletter must not violate MLS rules and regulations.

To view the NAR case studies online, visit www.realtor.org/CEAM.nsf (password required).

Q    My broker says that if I put an ad in the newspaper targeting sellers, I may be violating the part of the Code of Ethics that refers to respecting agency relationships. Can this be true?

A   Article 16 prohibits REALTORS® from taking actions inconsistent with the agency or other exclusive relationship REALTORS® have with other clients. However, newspaper ads and other mass-media communications are unlikely to result in an ethics violation.

There are two case studies in the NAR Code of Ethics and Arbitration Manual with similar circumstances, and in both instances, the hearing panels found that a mass-media solicitation is not a violation of the code. In one of the case studies, the agent distributed brochures to front doors of houses in a market area. The agent in the other case study used newspaper ads and billboards.

Again, the details of a particular case may vary, and the decision regarding whether an action is an ethics violation is determined by a hearing panel. Visit Realtor.org for the complete case studies.

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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