BARRISTER'S BRIEFING: ‘Stand Up and Deliver’—Cooperation, Courtesy and The Code of Ethics

Brian Levine | November 12, 2021

Brian Levine, Esq.

(Editor’s Note: Part one of a two-part series)

The holidays are quickly approaching and with it, the anticipation of holiday cheer, kindness, courtesy, and giving. While this is wonderful, as Realtors we should be embracing this attitude all year long. Sadly, whether due to the market, the business, political unrest, or some other factors, the real estate business has become rife with issues that stem primarily from the lack of kindness, cooperation and professionalism. This duty starts with the Code of Ethics Preamble and continues with numerous articles. It even extends into the OneKey Rules and Procedures. Whether you realize it or not, being a Realtor is a privilege and an honor.

Not every real estate professional is a Realtor. In joining an association, you agree to hold yourself to a higher standard of honor, expertise, and professionalism. Failing to comply with the Realtors’ tenets and Code of Ethics creates a bad image for the industry, your brokerage and you. It may even result with fines, Professional Standards hearings, with possible discipline or suspension and even lawsuits.

I’ve spoken about many of these issues in the past, however, in light with what has been reported by many as a downturn in professionalism and human courtesies, I think it timely to discuss it again and point out that all Realtors are responsible for not only promoting these principles, but also rooting out and reporting the violation of these principles. It is time to “Stand Up and Deliver.”

The Preamble

Most Realtors recall from their earliest days in the profession that the Code of Ethics Preamble contains the “Golden Rule” (do unto others and you would have them do unto you). But the Code of Ethics goes beyond that. It states in the Preamble that because of the founding principles and importance of owning real estate, these interests create “obligations beyond those of ordinary commerce.” As such, these interests “…impose grave social responsibility and a patriotic duty to which Realtors should dedicate themselves…. Realtors, therefore, are zealous to maintain and improve the standards of their calling and share with their fellow Realtors a common responsibility for its integrity and honor.”

Additionally, they are to “…eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession.” Because of the need to promote the best interests of their clients and the public, Realtors realize that cooperation with other real estate professionals is in the best interest of those that utilize their services; therefore, Realtors should “not attempt to gain any unfair advantage over their competitor; and they refrain from making unsolicited comments about other practitioners.” If their opinion is offered, it should be done in an “objective professional manner, uninfluenced by any personal motivation or potential advantage or gain.”

Not only does the Code establish a standard of professional conduct, it also establishes a duty to act and identify those Realtors that violate the Code regarding matters relating to the public trust by stating that “Realtors having direct personal knowledge of conduct that may violate the Code of Ethics…bring such matters to the attention of the appropriate Board or Association of Realtors.”

Key Words/Ideals

The Golden Rule                                                                                    Obligations beyond ordinary commerce
Grave social responsibility                                                                   Patriotic duty
Improve the standards of their calling                                              Integrity and honor
Eliminate practices that damage/discredit/dishonor                    Cooperate
Promote the best interests of clients/public
Refrain from unsolicited comments about other practitioners   [Avoid] unfair advantage

These ideals set Realtors apart from other licensees. It raises the bar far above what is expected from the standard real estate professional. Realtors should be proud to identify themselves and their title in this profession. These requirements embrace competency, fairness, and high integrity. I know of no other profession, other than perhaps doctors and lawyers, that establishes such a lofty ideal of moral conduct in business relations with the sole intent of preserving honesty, courtesy and professionalism. Today, more than any other time, we need to Stand Up and Deliver.

Article 1: Client Best Interests and Honesty to Parties

Article 1 sets the stage. “Realtors pledge themselves to protect and promote the interests of their clients.” Simply put, the clients’ interests come first. Making a commission is secondary. Our duty is to help our clients as best we can, even at our own detriment. Article 1 also says that Realtors must also “treat all parties honestly.” This simple requirement goes to keeping a level playing field based on honesty and integrity. Without it, our profession is denigrated, and transactions become difficult, if not impossible.

So, what does that mean in practice? While Article 1 can be interpreted to encompass many things, the Standards of Practice (SOP) illuminate common issues that come up. It means:

• You CANNOT LIE on market value to obtain a listing by underpricing or overpricing (SOP 1-3)

• You MUST disclose and obtain approval before you can be a dual agent (SOP 1-5)

• You MUST present all offers/counteroffers objectively and as quickly as possible (SOP 1-6, 1-7, 1-8)

• You cannot share confidential information of your client (SOP1-9)

• Regarding showings, you CANNOT access or use the property in any fashion other than on the terms or conditions authorized by the owner, or permit others to do the same (SOP 1-16)

Concerning the use of the property under SOP 1-16, it’s important to understand that this is a listing broker requirement. It means that a Realtor cannot impose additional requirements that the homeowner/landlord has not required in order for a cooperating agent to show the property. Things such as COVID forms, pre-approvals, W-2 production, credit check, or other information or forms cannot be required in order to show the property unless the client has authorized them. Conversely, if there are showing requirements, they must be complied with by everyone and not ignored.

Failing to comply with Article 1 can potentially bring a Code of Ethics complaint which can subject the offending party to discipline including letters of warning, required remedial classes, a fine up to $15,000 and even membership suspension, not to mention the valuable time and interruption to your business activities. Realtors need to make the effort to identify those that fall short of their duties and obligations. Not just the Realtor who was affected…All Realtors need to be vigilant. The process cannot work without everyone being involved. Realtors can’t be too busy to bother or simply put the onus on someone else. Their client’s interests are at stake. Realtors need to support the Code and Stand Up and Deliver.

Showing Requirements: OneKey Rules and Procedures

As discussed above, a listing agent cannot impose additional requirements on a cooperating agent that have not been established by the homeowner/landlord. Further, the OneKey Rules and Procedures establishes showing requirements that all Realtor Participants must comply with. They are:

• Listing agents MUST provide reasonable access to all listings. Failing to provide access could be an Article 1 violation, as it may not be in the best interests of the client.

• ALL listings must be available to be shown within 24 hours of the effective date of the listing (unless there are instructions from the owner).

• Showing requests MUST be responded to “immediately,” which means within three hours of receipt.

• If there are any restrictions regarding showings, they MUST be in writing (and presented upon request).

Selectively showing a property based upon a Realtor’s personal desires, motivations, or financial gain is a violation of the rule. This rule requires that all Realtors be treated in the same fashion regarding showings and, above all, that all showings are scheduled and allowed in a timely fashion.

Failing to timely show a property may result in an Article 1 violation (not acting in the best interests of your client). It may also result in the assessment of fines by a Facilitator as well as a possible Article 3 violation. But if fines are to be assessed or a Code of Ethics violation is to be brought, it must be initiated by a Realtor; someone who has integrity and honor and will not permit bad actors to continue to disrupt honest business. That Realtor must Stand Up and Deliver.

Rules Enforcement Facilitators

One of the biggest offenses being identified in our area are that agents are not communicating or cooperating regarding setting up showings or in presenting offers. What may not be realized is that, aside from filing a complaint pursuant to the Code of Ethics, a broker may engage the services of a Rules Enforcement Facilitator if there isn’t timely cooperation (we’re talking a few hours) regarding these issues and Facilitators are authorized to apply fines, starting at $500, for the lack of timely communication and compliance.

Facilitators are appointed by OneKey MLS to resolve broker-to-broker disputes regarding showings and presentations. They can resolve the following disputes:

• Cooperating broker/agent is having difficulty making a showing appointment.

• Listing broker/agent is not providing timely production of written showing instruction from owner.

• Listing broker/agent is not making timely arrangements to present an offer.

• Cooperating broker/agent is not making timely arrangements to present counteroffer.

• Listing broker/agent is not providing timely production of owner’s written waiver of offer presentation.

• Cooperating broker/agent is not providing timely production of buyer’s written waiver of offer presentation.

• Listing broker/agent is not providing timely return of offer acknowledgment form or sworn declaration that offer was presented.

In order to engage a Facilitator, the Realtor must first try to resolve the issue themselves. If that fails, then they need to engage the help of their broker/manager to try to resolve the matter. If that fails, then the broker/manager (not the agent) may contact the Facilitator to ask for help.

Once engaged, a Facilitator will attempt to reach the offending broker by phone/text to resolve the matter. If there is no response (usually after an hour or two), then the Facilitator will usually follow up with another call or provide a Facilitator Request Form indicating what is required of the broker. If there is no response within one hour, then the Facilitator can apply an automatic fine ($500- 1st offense; $750- 2nd offense; $1,000- 3+ offenses). If the broker or any of his agents violates a specific rule five or more times within a given 12-month period, then the MLS staff can refer the broker to the MLS Rules Enforcement Committee for a hearing. This committee can apply the same discipline as a Professional Standards Hearing Panel (i.e. up to a $15,000 fine, membership suspension).

Facilitators are available to assist Realtors; however, the Realtor must act swiftly. If there is no immediate response, then the Realtor must go into action and engage their broker/manager as soon as possible. Their client’s best interests are at stake. That broker/manager must also be decisive and engage; first with the broker, and then with the Facilitator if there is no response. Without all the parties working together, the rule is worthless. The objective is to obtain access and communication, not to fine; although the fine is the “teeth” in this situation if there is noncompliance.

The hope is that with enough Realtors working in unison to enforce compliance, the tables will turn, and the days of lackadaisical communication and cooperation will come to an end. Uncooperative brokers will continually incur fines and many may see themselves before a HGAR tribunal requiring them to account for their actions and possibly fining them or suspending their membership. The key is, Realtors need to Stand Up and Deliver.

Conclusion

In today’s challenging environment, it seems OK to do whatever is necessary to get ahead; to make a few more deals, obtain a few more clients, make a few more dollars. Machiavelli said, “The end justifies the means.” But that is not true. What suffers is integrity. What is lost is the reputation and trust from the public. Being a Realtor means something special. It’s an honor, a duty and a responsibility. Cooperation and courtesy are the cornerstones of being a Realtor. Without them, the reputation falls away, the confidence is gone. Realtors owe it to themselves and to the association to which they belong to rise, stand tall, identify wrongs, and require all Realtors to abide by the Code we chose to embrace. It’s time to Stand Up and Deliver.

Brian Levine
Brian S. Levine, Esq. is In-House Counsel/Director of Legal Services & Professional Standards Administrator for the Hudson Gateway Association of Realtors.