BARRISTER'S BRIEFING: Key Takeaway From Standard of Practice 3-6
Leon Cameron, Esq. | January 2017
In the Realtor Code of Ethics, Standard of Practice (S.O.P.) 3-6 states: “Realtors shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation.” This particular Standard of Practice is illustrative of the overarching requirement of Realtors under Article 3: “Realtors shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the share commissions, fees, or to otherwise compensate another broker.”
The takeaway from this S.O.P. is that although a seller’s agent need not disclose the buyer’s name nor the amount of the accepted offer, they must nonetheless disclose the existence of an accepted offer. It’s also worth noting the added caveat, “including offers with unresolved contingencies.” An example of such a contingency could be the completion of a home inspection. Hence, a listing broker who fails to disclose the existence of an accepted offer because a home inspection has not yet been completed would be running afoul of this particular Standard of Practice. This requirement also helps to ensure that Realtors adhere to the requirement of treating all parties honestly. Worthy of note is that although the particular language in 3-6 states “any broker seeking cooperation” the admonition in this Standard of Practice can apply to any Licensee-Broker or otherwise.
Although not specifically mentioned in any of the various Standards of Practice under Article 3, Realtors are likewise cautioned against stating that there is an accepted offer on a property, if one does not so exist. It may be a violation of Article 1 to dishonestly declare that a property has an accepted offer, when it actually does not. Of course, all determinations of violations of the Realtor Code of Ethics are up to the Ethics Hearing Panels that would be convened for that purpose. Realtors are cautioned to always keep their Code of Ethics duties to customers and clients during the negotiation process, and otherwise. Happy New Year to all.
Editor’s Note: The foregoing article is for information purposes only and does not confer an attorney/client relationship. For a legal opinion or advice specific to your situation, please consult with a private attorney at law.