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The Legal Blog, brought to you by NVAR's Professional Standards department, helps you stay on top of the latest rules and regulations in the industry.

A Case of Ethics - Risk Management

Aug 9, 2016

Standards and Ethics

REALTOR® Ambrose, who operated a brokerage business in many areas of the city, was also a home builder. For the homes he built, he maintained a separate sales force and had consistently refused to permit other REALTORS® to show his new homes.

This practice came to the attention of an officer of the Association of REALTORS® who made a complaint which was referred to the Professional Standards Committee by the Grievance Committee.

At the hearing, the Hearing panel asked REALTOR® Ambrose to answer charges that his policy was in violation of Article 3 of the Code of Ethics.

REALTOR® Ambrose's defense was that Article 3 requires a REALTOR® to cooperate with other brokers "whenever it is in the interest of the client." He contended that in the activity in question, there was no client; that he was not acting in the capacity of a broker, but as owner-seller; and that, under the circumstances, Article 3 did not apply to his method of marketing the houses that he built.

It was concluded by the Hearing Panel that REALTOR® Ambrose's defense was valid; that he was in the position of a principal; that Article 3 permitted him, as the builder-owner, to make the decision as to what marketing procedure would be in his own best interest ; and that although other REALTORS® might disagree with the wisdom of his decision, he was not in violation of Article 3.
  • Standards and Ethics