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The Realtor® Code of Ethics in Action: Article 1

07/31/2023

Article 1 of the Code of Ethics says, “Realtors® pledge… to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve Realtors® of their obligation to treat all parties honestly.” 

Many NVAR members will recall a time when Article 1 included a requirement to treat all parties fairly. While the Code’s Preamble speaks to the fact that “the term Realtor® has come to connote competency, fairness, and high integrity…”, the Code has not compelled any specific requirement of fairness for many years. Why is there no longer a requirement that Realtors® treat all parties fairly? Any determination of whether there was a failure to treat all parties fairly is incredibly subjective, and any hearing panel’s decision would largely depend on the individual panel member’s personal beliefs regarding what is fair and/or what is not fair. 

Aside from unauthorized access allegations, Article 1 is the most frequently alleged article in complaints received by NVAR. Often, the Article 1 allegations can be broken up between the two primary requirements of the article: to act in the best interests of the client and to treat all parties honestly. It is important to note that the requirement to treat all parties honestly supersedes the obligation that the Realtor® must act in the best interests of their client. 

Consider the following scenario: Realtor® A lists a property for sale. In the listing description, it is advertised that the property is situated less than a block away from a bus stop. Realtor® B’s client views the property and decides to submit an offer. Realtor® B informs Realtor® A that one of the primary reasons their buyer client is interested in the property is due to the buyer client’s disability requiring close proximity to a bus stop. Following the ratification of the purchase agreement between Realtor® A’s seller client and Realtor® B’s buyer client, Realtor® A learns that the bus stop near the property is being discontinued. Soon, the closest bus stop will be at least six blocks away.  

Does Realtor® A have a requirement to inform Realtor® B that the bus stop advertised in the listing is being discontinued? Or is Realtor® A’s duty to ensure that the transaction settles successfully for their client?  

Again, the requirement to treat all parties honestly is primary. In this scenario, Realtor® A does have a requirement to provide the information regarding the discontinued bus stop to Realtor® B because there is a material change in the characteristics of the property for the buyer client. If this information is provided by Realtor® A and it causes Realtor® B’s buyer client to seek a release from the purchase agreement, Realtor® A’s actions are protected by Article 1. Should the seller client file a complaint alleging that Realtor® A failed to act in their best interests, a hearing panel would find in favor of Realtor® A.  

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